While recent events have taken a toll on the national housing market, Colorado Springs has seen record demand. In July, home prices and sales reached new all-time highs, despite the effects of COVID-19 on the local economy. What’s driving this trend, and how much longer will it last? Here’s what you should know.
The Real Estate Market Is on Fire
Recent Colorado Springs housing market trends continue to show a strong seller’s market with record-low interest rates. According to market reports, the median price of recent home sales soared to $377,000, which represents a 13.6% year-over-year increase that blew past the previous record of $360,000 set in April. At the same time, the average price of recent home sales jumped to $427,593, which equals a 14.8% increase over the same month last year and surpassed the all-time record of $401,980 set in June.
Single-family and patio home sales totaled just under 2,000, which equals a 19% increase over the same month last year. It also eclipses the previous one-month high of 1,743 established in June of 2017.
All of this record-breaking activity has caused many homeowners to consider putting their homes on the market. To understand whether now is a good time to sell or stand pat, it helps to understand why homes are selling so well and whether this trend is expected to continue or change in the coming months.
What’s Driving Demand?
According to experts, some of the sharp increase in demand is actually owed in part to the pandemic. Throughout March and April, the state temporarily halted open houses and placed tight restrictions on showings. In turn, local year-over-year home sales declined by nearly 8% in April and almost 28% in May. While these restrictions appear to have stymied the market, they also seem to have created pent-up demand among buyers who were excited to take advantage of historically low mortgage rates.
At the same time, motivated buyers are having to contend with limited inventory, which is only serving to increase competition and send home prices to record highs. Right now, the local inventory of available homes cannot keep pace with demand. In July, only 1,390 homes were available for sale. That’s almost 37% fewer homes than were available the same month last year.
It’s especially difficult for buyers to find homes for less than $400,000; and when they do, they almost always have to compete with multiple offers. While this can be a headache for buyers, it has provided a rare opportunity for sellers, who have been able to easily and quickly sell their homes at record-high prices.
For homes above $600,000, competition is not as intense. If you are planning to sell an upscale home, you will need to be more conservative with your price to make sure it’s correct based on the condition and location of the property. While multiple offers are possible for higher-end homes, it’s less common for sellers of million-dollar properties to receive several competing bids.
How Long Will It Last?
Experts expect Colorado Springs’ real estate market to remain hot as long as mortgage rates stay low and inventory remains limited. That said, even the most reputable industry experts can have difficulty predicting the future, especially during these unprecedented times.
With a potential political shakeup in November and the lingering COVID-19 outbreak, economic disruptions are always possible. If a local outbreak results in another lockdown, Colorado Springs could see a downturn in the housing market. If this occurs, homeowners can expect to see another dip in buyer demand, resulting in decreasing home values. They may also have difficulty selling their properties if the state imposes new restrictions on showings.
With this in mind, if you’re thinking of selling your home, it’s best to take advantage of current conditions, so you can get the price you’re hoping for. If you’re not yet prepared to sell, talk to your real estate agent about how you can streamline the process.
Thinking of selling your home? The Wheaton Team can help. With six decades of combined experience, our team specializes in residential real estate throughout all of El Paso County, including the Tri-Lakes area and all of Colorado Springs. Let us guide you through each step of the complex selling process, so you can get a price that will leave you smiling.