September 10, 2023 | Market Update
1. Quarterly and Yearly Trends
Single Family/ Patio Homes for Sale: There were 2,420 active homes for sale in August and 2,254 in July, a 7.4% increase. Compared to last August there were 2,639 homes for sale, which is an 8.3% decrease from last year. There is currently 2.3 months of supply, which is up from July by 0.3 months and up from this time last year, which was 1.9 months of supply. The rate of sales is slower than last year and there were less homes for sale. Why? Affordability.
–RSC Listing and Sales Summary for August 23
New Listings in August: 1,407. August of last year was 1,801. A 22% decline. Less homes are coming on the market.
-August 2023 Charts
Total Under Contract in August: 1,467. August of 2022 was 2,039. There were roughly 28% less homes under contract this August compared to last August.
-August 2023 Charts
Average Days on Market in August: 29. Up from 27 in July and up from August of 2022 at 17 Days on Market. Days on market have been increasing slightly since July of this year, in which they were at 23 Days on Market.
-August 2023 Charts
Total Sales Year to Date in August: 8,395. This is down from 11,083 in August of 2022. A 24% decline in home sales for the year thus far compared to last year at this time.
-August 2023 Charts
Average Price in August: $553,959 up from $540,443 in July, a 2.5% increase. Up from $530,547 in August of 2022, a 4.4% increase.
-RSC Listing and Sales Summary August 23
Median Price in August: $480,000 up from $472,000 in July. Nearly unchanged from $480,592 in August of 2022.
-RSC Listing and Sales Summary August 23
Active/Sold Listing Analysis for August: Most properties sold were in the $300k to $799k range with the highest amount in the $400-499k range. 38% of homes had a price reduction in the $400-499k range and the average reduction was 1.7% of the list price. After the $599k price point, on average, as the price bracket goes up, the percentage of homes with price reductions goes down with only 13.6% of homes over $2 million had price reductions. Conversely, the average reduction percentage increases with increases in price bracket with the average reduction percentage being 4% of list price for homes over $2 million.
-RSC Active/Sold Listing Analysis August 23
2. Economic Indicators
National Unemployment Rate: 3.8%, The highest level since February of 2022, but, still very low. Colorado Springs’ unemployment rate is 3.7%. National employment is trending up in health care, leisure and hospitality, social assistance, and construction (specialty trade contractors, and heavy and civil engineering construction). It is decreasing in transportation and warehousing (reflecting business closure in sectors like couriers and messengers)
-Bureau of Labor and Statistics, bls.gov
Inflation: The Consumer Price Index (CPI) rose 0.2% in July 2023. Increases were in Food and items other than food and energy. In the last 12 months the CPI rose 3.2%.
-Bureau of Labor and Statistics, bls.gov
The Federal Reserve’s inflationary target is 2%, which means they will likely continue to hike interest rates in the coming months to bring the CPI closer to their established target.
Consumer Sentiment: 71.6 as of August 25, 2023. It has been on an upward trend since May of 2023 when it was 59.2. This is a leading economic indicator and consumers seem to be optimistic about spending money and are generally interested in making large purchases.
-St. Louis FED, fred.stlouisfed.org
Economic Summary: The economy is doing well. Most people are employed and plan on spending money in the coming months on potentially large purchases (cars, houses). Inflation is still not in line with FED targets, and we will likely see further interest rate hikes in the coming months. This will likely have a slowing effect on the economy as we head into winter, which could manifest with fewer large purchases, higher unemployment rates.
3. Market Predictions
Prices/Affordability/Inventory/Days on Market: Over the next few months I expect prices to remain relatively flat due to interest rate levels, anticipated interest rate hikes, and the resulting affordability issues for many buyers. Inventory will continue to decline slightly due to less and less homeowners choosing to list their homes because of worries about the market or delaying decisions to move because of affordability. I expect days on market will continue to remain low because of the lack of inventory available for ready and willing home buyers.
Starting potentially early next year I expect we will see some signs that the economy is starting to suffer and at least the end of interest rate hikes and maybe even some interest rate reductions heading into next summer.
4. In-Depth Neighborhood Reports
80906 (Broadmoor):
The Median sold price is $750,000, up 37.11% since last month! Homes are selling for 99% of list price, which is down 0.16% from last month. There is 2.7 months of inventory, which is a 4.26% decrease since last month. Meaning, if no additional homes came on the market, it would take nearly three months for the inventory to be gone. It’s a sellers’ market. Estimated property values have risen 3.1% since this time last year. The median price per square foot is $226/sq. ft. Most homes went under contract in less than two weeks in the month of August.
80908 (Black Forest):
The Median sold price is $658,000, down 21.67% since last month! Homes are selling for 97.9% of list price, which is down 0.8% from last month. There is 3.85 months of inventory, which is a 6.65% increase since last month. Meaning, if no additional homes came on the market, it would take nearly four months for the inventory to be gone. It’s a sellers’ market but moving close to a balanced market. Estimated property values are essentially unchanged since this time last year. The median price per square foot is $216/sq. ft. Most homes went under contract in less than a month during the month of August.
80132 (Monument):
The Median sold price is $743,750, up 1.19% since last month. Homes are selling for 99% of list price, which is down 0.87% from last month. There is 2.53 months of inventory, which is a 11.54% decrease since last month. Meaning, if no additional homes came on the market, it would take two and a half months for the inventory to be gone. It’s a sellers’ market. Estimated property values have fallen 2.5% since this time last year. The median price per square foot is $211/sq. ft. Most homes went under contract in roughly three weeks in the month of August.
80921 (Northgate):
The Median sold price is $745,000, down 3.62% since last month. Homes are selling for approximately 99% of list price, which is up 0.43% from last month. There is 2.43 months of inventory, which is a 5.81% decrease since last month. Meaning, if no additional homes came on the market, it would take approximately two and a half months for the inventory to be gone. It’s a sellers’ market. Estimated property values are nearly flat with a 0.5% decline since this time last year. The median price per square foot is $218/sq. ft. Most homes went under contract in about a month during August.
80919 (NW COS):
The Median sold price is $580,000, down 8.3% since last month. Homes are selling for 100.1% of list price, which is up 0.03% from last month. There is 1.58 months of inventory, which is a 6.51% decrease since last month. Meaning, if no additional homes came on the market, it would take approximately a month and a half for the inventory to be gone. It’s a sellers’ market. Estimated property values are down 3.3% since this time last year. The median price per square foot is $217/sq. ft. Most homes went under contract in under three weeks during the month of August.
80133 (Palmer Lake):
The Median sold price is $470,000, down 32.71% since last month. Homes are selling for 98.6% of list price, which is up 0.89% from last month. There is 2.57 months of inventory, which is a 16.29% decrease since last month. Meaning, if no additional homes came on the market, it would take approximately a two and a half months for the inventory to be gone. It’s a sellers’ market. Estimated property values are down nearly one percent since this time last year. The median price per square foot is $274/sq. ft. Most homes went under contract in roughly five weeks during the month of August.
80831 (Peyton):
The Median sold price is $553,500, up .64% since last month. Homes are selling for 99.2% of list price, which is up 0.14% from last month. There is 2.56 months of inventory, which is a 4.07% increase since last month. Meaning, if no additional homes came on the market, it would take approximately two and a half months for the inventory to be gone. It’s a sellers’ market. Estimated property values are down 2.8% since this time last year. The median price per square foot is $181/sq. ft. Most homes went under contract in less than a month during the month of August.
80817 (Fountain):
The Median sold price is $397,000, down 2.58% since last month. Homes are selling for 100.1% of list price, which is down 0.66% from last month. There is 1.38 months of inventory, which is a 6.76% decrease since last month. Meaning, if no additional homes came on the market, it would take approximately a month and a half for the inventory to be gone. It’s a sellers’ market. Estimated property values are down 3.6% since this time last year. The median price per square foot is $211/sq. ft. Most homes went under contract in approximately two weeks during the month of August.
5. Upcoming Developments
Interquest and Northgate continues serious commercial development with the under construction 8,000-seat outdoor amphitheater.
Falcon’s unincorporated area is adding a major commercial development with a King Soopers, several fast-food chains, and auto services. Construction is well under way.
Downtown is adding 2,000 apartments over the next two years. Several sites are actively under construction.
Black Forest is adding several high-end housing developments and a 225-room hotel with 50 additional rentals.
Southeast of COS Airport there are several developments planned with over 18,000 homes planned to stretch from Schriever AFB to east of Fountain.
Banning Lewis Ranch has a Norwood development that could add up to over 2,500 new homes in the next few years.
See the full article posted on my Facebook page- Austin Collins, Realtor for a detailed explanation of the upcoming and ongoing developments happening in Colorado Springs.
6. Interest Rate Analysis
Interest rates continue to climb but are easing in their degree of increase. The last rate decision was on 26 July 2023, and it was a 0.25% increase. The next rate decision is scheduled for 20 September 2023. There are no released predictions, but I expect we will see a small hike at the next FED meeting as the CPI is still above FED targets and consumer sentiment remains healthy. That said, unemployment is rising, we are coming into fall and the end of the summer travel season, which is typically a slower economic season for consumers. I believe coming into winter and early next year we will have a different economic picture and may start to see some relief with interest rates.
7. Real Estate Investment Insights
Potential Opportunities: After running an income property query in the MLS there are over 100 properties on the market with active tenants ranging from condo units to apartment buildings or mixed-use properties. The prices range from roughly $220k to $5.38M with most falling in the $400-800k range. These properties are throwing off thousands of dollars in income monthly and if you are in a position to buy with cash, or put down a substantial down-payment, you could have a nice cash flowing asset.
Rental Market Trends: In the last year rent prices for smaller prices have come down slightly, but for larger properties such as 4+ bedrooms, or premium units that have quality finishes rent prices have continued to rise as they are in high demand. This part of the market offers good value because as the property size increases, the price per square foot decreases due to affordability and demand by the average buyer. That means you get more property for your money at the higher end of the market and rents continue to rise.
ROI Projections: Return on Investment (ROI) projections are property and financing specific. There are deals to be found in most residential property types. Something to keep in mind is that when interest rates do come down there will be thousands of people in our market who have been on the sidelines looking to make a purchase. What do you think this does to demand and therefore prices? My recommendation? If you can acquire a property now and make it work financially for at least a year, when interest rates come down (I anticipate sooner than a year), you refinance and don’t pay an inflated price.
Single family homes are in high demand because there is a lack of inventory on the market. Until our housing need is met (and we are nowhere close) we will continue to have high demand for housing. Colorado Springs is attracting new residents from all over the U.S. on a regular basis. I regularly field calls from people from out of state looking for a home to purchase within the next 12 months.
8. Legal and Regulatory Updates
A recent change by the Real Estate Commission of Colorado has added a new blurb to the standard Colorado purchase contract which advises all home buyers to have an indoor radon test done and mitigation performed if levels are above a certain threshold. It goes on to list the potential for lung cancer due to radon exposure.
This is great for buyers because it mitigates potential health hazards of the home they are purchasing. For sellers it is an extra inspection item to be ready to address. If there was any concern of the presence of radon for a property owner, they should have had a radon test done sooner than later. Overall, this is a positive change as it protects home buyers from hazardous conditions, they may have been unwitting to.
9. Home Improvement Tips
If you are thinking about a move soon and you are wondering what renovations or improvements you should do to your home to get the highest possible sale price, one thing that matters in this market is wall colors. If you have rooms that are painted anything but a neutral color, you are hurting yourself in this market. Buyers are already pinched financially due to interest rates, so they are looking for something as turnkey as possible in this market.
You are selling a product when you sell your home and though it is a simple fix to paint some walls, buyers have a hard time seeing past your color choices. Colors that do well in this market are shades of light grey, beige with ceilings that are white. These colors are neutral and therefore appeal to more buyers. More buyers mean more demand. More demand means higher prices for your home. White ceilings also help because they brighten a room, which makes it look larger and more inviting.
10. Community News
Pawtoberfest
Date: Saturday, September 16, 2023
Address: Colorado Springs
About: Annual festival with craft beer, cocktails, food vendors, and a 2-mile dog walk that benefits the Humane Society of the Pikes Peak Region.
Website: https://secure.qgiv.com/event/pawtoberfes2/
4th Annual Palmer Lake Wine Festival
Date: September 9, 2023, 1:00pm – 5:00 pm
Address: 199 County Line Rd., Palmer Lake, CO, 80133
About: General admission $45; VIP admission $55
Website: https://www.peakradar.com/event/4th-annual-palmer-lake-wine-festival/
Chris Cagle
Date: Sat. Sep. 9th7:00 pm- 9:00 pm
Address: Boot Barn Hall, 12071 Bass pro Dr., CO SPGS, CO
About: Get tickets at bootbarnhallco.com or https://www.axs.com/events/496392/chris-cagle-tickets
Bines & Brews Beer and Libations Fest
Date: September 16, 2023 1:00 pm – 5:00 pm
Address: 151 Front Street, Monument, CO, 80132, 719-481-3282
About: $25 admission, 21 years and older only, no dogs of any age allowed. Id required. Includes a commemorative glass and unlimited 2oz tastings. Designated driver $10. Gates open at 1:00 pm. https://tri.lakes.chamberofcommerce.me/members/evr/reg_event.php?orgcode=TLCC&evid=75417853
‘Mamma Mia!’
Date: September 231, 2023, 7:00 pm – 9:00 pm
Address: 1810 Northgate Blvd, CO SPGS, CO, 719-234-8809
About: Adults $12 online/ $15 at the door, Students and Seniors: $10 online/ $12 at the door.
https://www.dcctheatre.org/tickets
Colorado Springs Oktoberfest (11thannual)
Date: 29 September – 01 October, 2023
Address: Western Museum of Mining and Industry, 225 North Gate Blvd, CO SPGS< CO, 80921
About: Admission free, parking $15, experiences start at $30
In Conclusion
If you are thinking about a move and wondering what your home is worth you can get a general idea with my home value generator at the top of the home page of my website www.austincollinsre.com.
If you want a more accurate valuation call, text or email me at 719-204-1429 or austin.collinsrealtor@gmail.com.
I provide this service for free with no obligation or contracts and you stand to gain an accurate value of your home, tips for preparing your home for a sale, and a detailed strategy for selling it quickly for top dollar.
I can also assist you in finding your next home, your dream home, or an investment property, and am ready to go on the hunt for you immediately.
Is there other information you would have liked to see here? Let me know, and I’ll try to add it to the next monthly market update.
Call me today if you are thinking about a sale or purchase, so I can make sure you get the best deal.
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