HARRY'S BI-WEEKLY UPDATE 11.22.24
November 22, 2024
HARRY’S BI-WEEKLY UPDATE
A Current Look at the Colorado Springs Residential real estate Market
As part of my “Special Brand of Customer Service”, it is my desire to share current Residential real estate issues that will help to make you a more successful and profitable Buyer and Seller.
LOOKING AHEAD TO A BRIGHTER 2025 housing market
The Residential real estate Market has seen a lot of volatility over the last several years with both buyers and sellers skeptical of “what’s to come”.
Now is the time of year when I begin to look ahead to develop my “Market Wisdom” for the coming year. I use my 51 plus years in the local housing arena coupled with my investment banking background and the predictions of real estate economists to come up with what I consider to be a realistic picture of the year ahead.
I see our market moving in a positive direction with mortgage rates falling, more homes coming into the market, total home sales to rise and prices to increase at a more reasonable rate than that of several years ago.
This will help with housing affordability for those who were priced out of the market as well as provide better choices for those who have been waiting to sell to trade-up or move to a new neighborhood or out of state.
Existing-home sales across the country ticked up in October compared to the same time last year due to the short-lived drop in mortgage rates. This was the first year-over-year increase in sales since 2021.
According to Lawrence Yun, chief economist for the National Association of Realtors (NAR), “People are accepting that the mortgage rates, the new normal, are not going to be 3% or 4% or 5%.”
“We’ve seen after presidential elections—and it doesn’t matter who wins—that there’s usually a slight boost in home sales. It removes some of the uncertainty. Now you know it’s the policy (of President-elect Trump) and you can make predictions about what will happen and make a decision on that,” he added.
Home Sales to Rise
With the improving job numbers and recent gains in the stock market, Yun predicted that more Americans may be motivated to act. He predicts an uptick of nearly 2 million jobs for 2025 and another nearly 2 million increase in 2026, which could bode well for the housing market nationally. (and here, too, as well)
“2023 and 2024 were both difficult years in the housing market,” Yun said. But with the 3% year-over-year gain in September and the October year-over-year increase I mentioned earlier, Yun indicated that “maybe the worse is over”.
Here is Yun’s forecast over the next two years:
- 2025 Sales Projection: Existing-home sales to rise 9% year-over-year; New home sales to jump by 11%.
- 2026 Sales Projection: Existing-home sales to rise 13% year-over-year; New home sales to increase by 8%.
Mortgage Rates to Moderate
Obviously, mortgage rates have had a bearing on how the housing market has fared.
According to Freddie Mac, the average 30-year fixed-rate mortgage has ranged from 6.08% to 7.44% over the past 52 weeks. Yun says the rates should stabilize at the low end of that range for 2025 and 2026.
Yun said that the “locked-in” effect of homeowners feeling stuck-in-place with 2% or 3% mortgage rates from recent years will lessen over time.
Home Prices Increase Slowly After Rapid Rises
As I mentioned earlier, home prices are going to continue to rise, although at a more “normalized” rate.
Yun’s forecast (this is national…and Colorado Springs normally tends to have greater home values and increases than the U.S. average):
- 2025 Median Home Price: $410,700, up 2% over 2024.
- 2026 Median Home Price: $420,000, up 2% over 2025.
A Different Type of Buyer
From a newly released NAR 2024 Profile of Home Buyers and Sellers:
- More buyers are skipping the mortgage. Due to the sizable housing equity gains many owners have experienced, all-cash buyers have surged to record highs, accounting for 26% of home sales over the past year. Thirty-one percent of repeat buyers paid all-cash for their next home purchase.
- First-time buyers are getting older. The median age of a first-time buyer was 38—an all-time high. According to the survey, “They are having to save for a longer period of time or maybe wait for the ‘bank of mom and dad’ to give them the funds to buy” . Twenty-five percent of first-time buyers used a gift or loan from a relative or friend for their home purchase; 20% took money out of financial assets like stocks, 401ks or cryptocurrency to afford homeownership; and 7% used inheritance money for their purchase—a record high. First-time buyers are coming up with the highest down payments in nearly 30 years—at 9%--in order to afford the higher home prices.
- The allure of cities grows. The pandemic may have unleashed a trend of suburban movers, but people are not heading back to city centers—the largest uptick in a decade, according to the study.
- More buyers are pooling their money. The number of multigenerational households surged to an all-time high of 17% over the last year. According to the survey, “The number one reason is for cost savings. They’re combining incomes in order to afford homeownership.” They’re also buying a multigenerational home to take care of aging parents because of young adults moving back home.
- Single women buyers continue to outpace single men buyers. A drop in marriage rates has triggered more consumers to enter the housing market on their own. Single women held a 24% share of the home-purchase market over the past year. For single men it was 11%.
So, folks, there you have it. Both my predictions and those of Lawrence Yun as well as information from the NAR study.
I also look at what’s happening specifically in the Colorado Springs area and there appears to be a lot of good news there as well.
We keep seeing companies wanting to expand their workforce as well as new companies wanting to relocate here. With that comes a great need for housing and no matter how you look at it—buying is preferable to renting when it comes to amassing wealth. Folks who are able will find a way to purchase a home if at all possible.
Our fabulous work/life balance makes Colorado Springs a very desirable place to live as those of us who already live here know.
I for one wish they would leave their cars elsewhere as the traffic sure has gotten worse in recent years, but in comparison to most other large communities, we’ve got nothing to complain about.
It’s not too early to start implementing a plan for your 2025 buying or selling needs and the sooner we start talking, the sooner you will have that plan ready and you’ll be that much further ahead of those who wait.
I look forward to meeting with you sooner than later because…Time is of the Essence… or “the early bird gets the worm” as they say.
In this case, the early bird gets the opportunity to grow their personal assets first. I like to see my clients get a jump on the rest as I know the excellent opportunities of which they can avail themselves.
Give me a call today at 719.593.1000 or email me at Harry@HarrySalzman.com and together let’s see how your Residential real estate dreams can become reality in the best time frame for you.
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