May 25th, 2007 12:12 PM by Brian Wess
According to recent statistics, the buyer's market in Colorado Springs continued through the end of April. The total number of listings on the market was up to over 8000 single-family homes, condos and town homes available on the market. There was an increase of over 26% more homes listed for sale in April over April 2006. At the same time sales of single-family homes have dropped over 15% in April and sales of condos and town homes dropped over 21% to about 900 and 126 in April respectively.
For April, the average sales price for single-family home in the Pikes Peak region was around $252,000, up from $244,000 in April 2006. That represents a 3.6% increase over the same month last year. The median sales price, which is the point at which 50% of the sales are above than 50% of the sales are below, rose 56% from the $202,000 to $213,000 over the same month last year.
For the period of January through April the Colorado Springs and Pikes Peak region has seen an increase of 3.8% in the total number of single-family listings available on the market while seeing a decrease of over 11% in the number of sales. However, the average sales price for sale family home has remained relatively stable showing a small 2.2% increase from approximately $248,000 to approximately $254,000 over the same period last year.
Sales prices for condos and town homes in the Pikes Peak region, however, didn't fare as well as their single-family counterparts in April. The average sales price of condo or townhome remained almost flat in April at approximately $161,000 and the median sales price actually showed a slight decrease of 1.7% to $147,000 in April from approximately $150,000 in April 2006.
For the period of January through April, condos and town homes showed an increase of 5.3% in the number of listings available on the market, to approximately 1,148, while showing a decrease of 6.2%, to approximately 481, in the number sales in the market over the same period last year. Despite this, the average sales price for condos and town homes has increased 10.3%, from $153,000 to approximately $168,700, over the same period last year.
The scandal in the subprime lending industry as made it very difficult for buyers with marginal credit to get qualified for loans, thus exacerbating the current real estate market correction. However, statistics that support my opinion that this is just a healthy market correction and not a "bubble" are that, while there have been large increases in the number of available properties on the market, sales prices for single-family homes in the Pikes Peak region have remained fairly stable while condo and town home prices have actually shown a healthy increase.
The current correction began in late spring 2006 when we began to see large monthly increases in the amount of available properties on the market and a slowing of sales. Most agree that April 2007 was one of the worst months all around that we've seen a very long time. Based on the indicators that I've seen, I suspect that May 2007 will show as being a healthier month and may indicate the beginning of a trend of slower but sustained real estate market performance in the Pikes Peak region.
For buyers this is a very good time to buy a property as interest rates have remained at historic lows and current market inventories are very high leading to a great deal of market competition.
For sellers the market has become a challenge that requires a great deal of knowledge and marketing experience combined with technological tools to stage their home effectively on the market and put their home in front of as many buyers as possible...especially since buyers now have much more to choose from and can afford to be much more selective.
For smart investors the current market can represent an opportunity to invest wisely in real estate. While fix and flips are not unheard of, for the last 18 months I have been recommending my investors begin to look at properties they can fix and hold as long term rentals, say for at least 4 to 5 years. The amount of competition between properties, now combined with the difficulty in getting buyers qualified for home loans thanks to the subprime lending scandal and small appreciations, has made fix and flips a poor investment choice in the current market. Rentals however have shown steady performance and may be increasing as the result of the influx of military families due to the current realignment taking place at Fort Carson. We can expect that, as this influx continues, existing home sales in the $200,000 and under market as well as rentals in the $1000 per month or less range will show an increase over the coming year.