Still A Seller's Market, But It's Easier
Properties in Colorado Springs are getting between 2-3 showings a week on average now, and are going under contract in 16 days, on average. We had a full 2 months of housing inventory for July. 4-6 months is considered a healthy balanced market.
Are prices going to drop? Are we actually starting to head toward a balanced housing market? Or is this just seasonal? Summertime is when the most listings hit the market! On the other hand, the last time we had at least two months worth of housing inventory was back in January 2019. So that hasn't happened in a few years.
There are currently 1,885 properties for sale in Colorado Springs. Out of those, 1,198 (63.5%) have had price drops. Some properties are still selling above asking price though.
553 properties have sold so far in August. 1,084 properties sold in July in Colorado Springs. Compare that with 1,487 properties that sold in July 2021.
The current economic climate has made many buyers question purchasing right now, which has taken the urgency out of buying a home. We're seeing a closer to normal timeframe for days on market for properties.
Colorado Springs Average Sale Prices
You can see that even with the home values seemingly dropping a bit, they are still much higher than they were this time last year!
Also, for land, there are 130 land properties for sale in Colorado Springs right now. 56 of those have taken a price drop, almost half.
8 have sold so far for August. 12 sold in July, out of 151 for sale. 11 sold in June, out of 140 for sale. Land has not been moving as quickly here! If people are unsure of buying a home, they're even less sure of buying land to build a home.
I bring up land because of my luxury vacant lot listing in Kissing Camels, in Colorado Springs. It's ready to build on, and preliminary plans have already been approved. Here's a link if you'd like to get more info on that lot.
The National Housing Info
The NAR (National Association of Realtors) recently released their predictions for the housing market, in their August US Economic Forecast Data. This information something you can look at, interpret, and make some conclusions about what the NAR's economic forecast looks like, and how trustworthy it may be.
Remember, these are national numbers. Your local market will be different. Your city will have unique draws and drawbacks to it. In this case, I live in Colorado Springs, so I will be looking at this data and overlaying what I know about Colorado Springs, as well as what the dats says about Colorado Springs specifically.
Read NAR's August US Economic Forecast Data report here, so you can compare with what I'm saying, or come back to the report later so you can fully digest the numbers in there:
So it looks like the prediction is that we'll continue to see a drop in home values into the end of the year, and starting 2023 the values will start to rise again. New home prices will have very minor drops in value, not enough to really make a noticeable difference.
Home prices for new and existing homes are 14.2% higher than they were last year. Let that sink in. Even with the price drops we've been seeing on homes, the values are still 14.2% higher than last year's prices.
If we do see a 4.2% and then another 21.3% drop in home values, that's a lot! Let's do some quick math. If you have a house that's worth $500,000 now, and you get a 4.2% drop in value, and then another 21.3% drop in value, your home would be worth 479000 after the 4.2% drop, and $381,763 after the 21.3% drop.
Is that a realistic expectation though?
Applying These Numbers to Colorado Springs
Let's take my house, which had at it's highest point (before April 2022) had a Zestimate of 490,000. It's now at $460,000. If I had my home listed for $490,000, would a 30k price drop make sense to sell it in this market?
My $490,000 house would be worth $469,420 after the 4.2% price drop, and $374,127.74 after the 21.3% price drop.
So at a total predicted future value of about $375,000, my house would still be worth ~ $75,000 more than what I bought it for in 2018. Does that sound like a more reasonable appreciation for Colorado Springs, where I live?
Now keep in mind, this is Colorado Springs, it's a generally more in demand city to live in, and these numbers we're talking about are national numbers. Things will be different for each city, and I think Colorado Springs is going to be on the higher end of the scale in terms of property values, generally.
Still, NAR gives some predictions that give some numbers we can play with. At the end of the day, it's still just people's best guesses, and economists, much like the weather people, are often wrong. It's very hard to make predictions, especially when you can't possible know everything.
Additional Thoughts on if Home Prices Will Drop
Other things to keep in mind: millennials are the largest base of buyers right now. We have more people needing homes to live in than any previous generation.
The unaffordability rate of homes is at its largest! If we take the median sale price of a house in Colorado Springs, at $460,000, and we divide that by the median income in Colorado Springs (as of 2016-2020) at $67,719, the price of a home in Colorado Springs is 6.79 times more expensive than a person's yearly income.
In the historical past, the average house cost 5 times the yearly household income. At the height of the 2006 housing boom, that number was at 7 times the yearly household income. We are almost to that same ratio in Colorado Springs. It really does feel like we're all still on a precipice with the economy and the housing market. Still sitting on the fence. Everyone is still waiting. Waiting to see what happens!
The high cost of homes right now definitely makes it difficult to purchase.
The Homes Owned By A Corporation
If you've wondered about the corporations buying up homes in Colorado Springs, I have a name for you: SFR JAVELIN BORROWER LP.
I came across this corporate owner when I was calling people in my neighborhood and found the name registered as the property owner for more than a few properties.
They own 176 homes in El Paso County. SFR JAVELIN BORROWER LP is also known as Invitation Homes, based out of Dallas, Texas. They own and lease 80,000 homes across the country. Invitation Homes is owned by Blackstone Inc.
So if you need to rent a house or know someone who does, Invitation Homes definitely has options right now for people relocating to Colorado Springs.
What are your thoughts? Do you think prices are going to drop for the rest of the year in Colorado Springs? Do you think it will be a good time to buy this year or in 2023 if that happens? Let me know in the comments below!
For home sellers, here's how I may make you up to $15,000 over what you would make selling your home on your own, and for way quicker, and here's how I am different from other agents you may talk to:
As you may know, For Sale By Owner Houses don't usually have the same traction as a house listed by a real estate agent. They also don't usually sell for as much. This is due to the inexperience of the homeowner, bad pictures, incomplete info, and most importantly, the homeowner isn't responsive enough to actually sell their own home (I see this one ALL the time).
And of course, it’s not their full-time job, so they can’t give it full-time treatment, which is what you need to sell a house!
For Sale By Owners also don't have public data on what they listed for, how long they were on market, and what they sold for. It's hard to have good data on them because of this. However, as an example, I personally followed a FSBO in 80907 this year, and this is what I found:
1201 Westmoreland listed for $400k sometime in early April 2021. It sat on the open market for two months before the seller listed with an agent on June 25th. They listed at $395k. It went under contract Jul 9th (14 days on market), and sold for the same price, $395k.
When I talked to the homeowner, I thought his asking price of $400k was too high for the home, and that seems to have been correct! It sat on market for too long, even with an agent, and the seller missed out on getting a bidding war and top dollar for his home.
The listing agent also missed out on getting more for her seller. If they had listed a little bit less, they could have easily gotten into a bidding war!
Let's take a few more for sale by owner examples in 80918:
There are currently 53 for sale by owner homes in all of El Paso County, at least on the Zillow website, and 2 on ForSaleByOwner.com.
More nearby For Sale By Owner homes:
By comparison, the average days on market for an agent listed home in 80918 is 4 days before it goes under contract! Agent listed homes in 80918 have also been selling for 101.1% to 108.2% over the list price over 2021 (last year it was 100.0% to 102.2%).
FSBO homes seem to sit for 2-3 months before they list with a real estate agent, or they finally do get a lower offer that they decide to take because of the sunk cost fallacy. Or they cancel selling altogether and just get frustrated.
If a home has sat for 2-3 months without an offer, and I wanted that home, I'd be offering a considerable amount less than asking. If the house was listed at say $450k, for a couple months on market, I'd offer $400k.
I mean why not, what's the worst they're going to do, say no? They can counter, and we can find some compromise, but I would at least expect a 20k discount on the price of the home. I could be totally off the mark here on pricing, but that's my personal opinion.
So let's say you as the seller sell this house on your own for $430k. After paying the buyer agent commission (3% is an average amount for each agent that we see in Colorado Springs, though this number is negotiable with your agent) and title company costs, you're usually paying around 4% of the amount you sell your home for, if you sell it without a listing agent.
So in the above example, you as the seller doing FBSO would be walking away with $417,100, and that’s if you actually get $430,000.
If you instead listed with a real estate agent, your agent would likely tell you your home needs to be priced lower, at say $430k. Once your agent lists your home, if we expect to sell your home for 101.1% to 108.2% over the list price, like the average for 80918 in 2021, then you could expect to sell it for $434,730 to $465,260. After factoring in 7% for costs (both real estate agents, and title costs, again, your own numbers may be different), your net amount is $404,299 to $432,692.
So selling at the same price, you make $12,801 less, to $15,592 more with an agent than you would selling it yourself, and you'll do it in 4 days instead of 2 months or more on your own. As a good real estate agent will often be able to sell your home for more, you may make even more on the sale of your home with an agent.
Now, if you’re listed in the MLS with an agent, you stand a much better chance to actually sell your home than selling on your own. Often what will happen is a homeowner will try selling their home on their own, give up after a month or two, and then use an agent. The price could have been too high, or the pictures bad, or not enough exposure as many buyers rely on their real estate agent’s MLS search. Often it’s all three.
So based on the information above, you MAY be able to sell for more on your own than with an agent, but without the experience, responsiveness, and discipline that it will take you to sell it, the odds are against you.
You can potentially save the commission you would have paid out to a listing agent, but then that work your agent would have done falls on you instead, and it’s a lot more work than most people are aware. There’s a reason there’s a whole job for it!
Ultimately, the net amount you as the seller walk away with is the most important number. If I can get you a net amount that is as much or higher than what you were hoping to sell your home for, then does it matter if my commission is $1,000, $10,000, or a million dollars? At the end of the day, the important thing is how much net you are making on your home.
I am transparent in what your options are and what the costs for those options look like. Whether it’s listing your home on the local real estate market in Colorado Springs, or getting a quick cash offer, you get to make the best decision for you! Many buyers are also typically willing to let you stay in your home for a month or two (sometimes more) after closing, so that you have time to find your next home!
If you'd like to dive deeper into numbers, I'm happy to do that with you.
Now, if you live in 80918 or know someone who does, then I’ve compiled some data for 80918 in particular:
There are 7 new listings in 80918 in the past week, ranging from $349,900 to $460,000. There are currently 30 homes for sale. There are 85 80918 homes currently under contract, and 427 that have sold in the last 6 months. 80918 is projected to increase in value by 15.4% over the next year.
Median sale price for 80918 in Colorado Springs for the past 5 years:
What I am looking for: someone who is looking to sell their home in 80918 in Colorado Springs, and who is looking for the knowledge and assistance of a local real estate agent. If you are interested, or know someone who is, please let your friendly neighborhood agent know (remember I live here!). Thanks, and I look forward to working with you now or in the future…
Amazon is hiring another 2,200 employees for Colorado Springs! Amazon already has 2,500 employees in the Colorado Springs area, so this is a big addition to job opportunities in Colorado Springs.
What does this mean for the city? It means that there are going to be 2,200 more people with jobs, who may be able to qualify for a loan in the near future. It will create more people who need a place to live!
Also, fun fact, did you know that the typical home value in 80921 is $649,714 vs 1 year ago when it was $549,538?
We'll take another zip code, 80919, where the typical home value is $552,956, versus $448,000 a year ago.
Now let's look at the hottest zip code in the country at this moment, 80916 (just to the left of the CS Airport). The median sale price for 80916 in 2021 is $344,000, vs a year ago at $283,500.
The median home price in Colorado Springs in general sits at 450,000. Compare that to Metro Denver, where the median home price is at $535,000.
So given all the rising home prices, are the people who get jobs at Amazon going to be able to afford homes where they work? Are prices just going to keep increasing?
As I’ve said before, I don’t see any reason for Colorado Springs to stop growing. It is a high demand city, with inviting landscapes and hiking, seasonal weather, fewer bugs, dry, growing nightlife and events, and more. It’s got 5 military bases, with a constant movement of military members. Colorado Springs has lots to offer businesses, as you can see from Amazon’s continued interest in using Colorado Springs as a hub for the whole state.
Yes, it’s unfortunate that the high home prices are driving out many people who want to live here. Still, the demand isn’t going away, and home builders are booming with business trying to keep up with that demand.
So should you buy now, if you’re thinking about it? Should you wait? I think if you want to buy a home for yourself to live in, or if it’s an investment, I don’t think the home values are going to decline at all. They will likely not increase quite as sharply as they did over the past year or two, but I see no reason for home values in Colorado Springs go back down.
If you’re thinking of investing in Colorado Springs, you may be aware that your profit margins are not going to be as lucrative as they would be elsewhere in the country, but you also may make up for that with home value appreciation, due to the demand. Rents are increasing also, so if you’re partial to the city, there are certainly opportunities to pick up investment properties in CS!
August Real Estate Stats for Colorado Springs!
These are the quick August 2021 stats for Colorado Springs, comparing this year to 2020:
•Average Sales Price UP 19.60
•Median Price UP 19.2%
•Residential Units Sold UP 8.3%
•Inventory Levels DOWN 55.7%
•Number of Listings DOWN 48.4.%
•Average Days on Market: 9 days
•Interest rates 2.84%
If you would like to see the full August report, click here:
In other news, the Marlboro Man's 8 million dollar house is for sale in Colorado Springs:
It's near the edge of Black Forest. Bob Norris played the Marlboro Man in ads in the 50s and 60s. It's a 14,000 square foot home on 15 acres, with 8 bedrooms, 10 bathrooms, a 5,300-square foot indoor ice rink, and the other normal rich people things like a movie theatre, tennis courts, courtyard, and swimming pool.
Bob Norris died almost two years ago, a few years after his wife. Bob hasn't owned the house for many years now, it's passed hands a few times since then, but it's fun to learn that history!
I also liked spotlighting a local Colorado Springs zip code last week and providing a snapshot of how the real estate looks there. This week let's take a look at 80922, and 80924. I quickly put together a couple small infographics for each zip code, thanks to the Canva app. Let’s take a look at them!
Expect to see more continued growth in 80924, as Colorado Springs continues to develop in the north and eastern sections of the city! If you live in a different zip code and are interested in what the numbers are for your zip code, let me know!
And that’s pretty typical, is the further north you go, the more expensive it’s getting, and of course that has to do with new development, rising costs of construction, and the desired north location. That’s fine with me, I’m happy living closer to the heart of the city, with mature trees all around! :)
If you're interested in finding out what your home is worth now, ask me! I'm happy to look into it, lots of people are shocked to learn how much of an increase they've had in equity.
If you think someone else would like to know what their house or zipcode is worth, let me know. I'm happy to share what I know!
Kevin James Bond
The Sufak Team
RE/MAX Real Estate Group
The future presidency/vice-presidency of Joe Biden and Kamala Harris has some specific implications for the 2021 Colorado Springs housing market. Here’s what I know about what 2021 could look like for the housing market in Colorado Springs: