HARRY'S BI-WEEKLY UPDATE 1.7.22
January 7, 2022
HARRY’S BI-WEEKLY UPDATE
A Current Look at the Colorado Springs Residential real estate Market
As part of my Personal Service, it is my desire to share current real estate issues that will help to make you a more successful and profitable buyer or seller.
HAPPY NEW YEAR…AND WELCOME TO 2022
As we bid adieu to a another unprecedented but better to handle year, here’s wishing you a very Happy, Healthy 2022. While we are not yet, and maybe will never, return to what we used to consider “normal”, at the very least most of us are learning to navigate in this “new normal” as best we can.
Two years ago, I wrote about my “2020 Vision” and predicted that local home appreciation would remain high, new construction would become a viable choice for many, and interest rates appeared likely to remain low for the foreseeable future.
All of this has remained true for the last two years…and for many of the reasons I mentioned. Those included the historically low inventory of existing homes for sale, the influx of new businesses and their relocated employees, and the high rental rates which would drive more folks to homeownership. And millennials are now aging into their prime home-buying years as well.
More than 18,100 homes were sold in the Colorado Springs area in 2021—the largest number ever and almost double the 9,146 sold in 2012. And home prices in the area have more than doubled over the last decade as well. The year-end median home price in 2012 was $209,700. In 2021 the year-end median home price was $450,000. And we have consistently done considerably better than the U.S. housing market in general.
The housing market has been strong thanks to rock-bottom mortgage rates, a limited supply of homes on the market and pent-up demand from consumers locked in last year due to the pandemic.
In 2021 Americans borrowed more than ever to buy homes. Lenders issued $1.6 trillion in purchase loans last year according to estimates by the Mortgage Bankers Association. That’s up slightly from $1.48 trillion in 2020 and above the previous record of $1.51 trillion in 2005.
The mortgage boom is another reflection of the low interest rates, as well as the desire for bigger homes due to the pandemic. Also, many folks were able to build up savings during the pandemic and a lot of that went into housing.
However, as the saying goes, “all good things must come to an end”, and while home prices are predicted to keep rising, interest rates will soon be joining them.
I’ve been telling you for some time now that I couldn’t predict “when” interest rates would rise, but that they weren’t going to stay at the historical lows forever. Well, Wednesday was a wakeup call when the Federal Reserve announced that interest rates would be rising as soon as April of this year. And within minutes the Dow Jones Index dropped more than 650 points! While they didn’t mention “mortgage” interest rates, the National Association of Realtors (NAR) has forecasted that mortgage interest rates will also rise.
What does that mean for you? For most, your home will likely continue to be your largest and fastest growing investment. That’s great news for homeowners who have low interest rates and are happy with their present living situation.
For others who have waited for various reasons but still have the desire to sell and trade up or purchase for the first time or for investment purposes, this news might not be so welcome.
As a result of the pandemic, many are still working from home (WFH) and home schooling. Both have changed what folks are looking for in their living situations and has driven a lot of home renovation and ideas of what is not only needed, but wanted, in a new home. As you might imagine, larger kitchens, home offices, private spaces and outdoor entertainment areas continue to be popular.
And with WFH becoming so prevalent even after companies have started to return to offices, there has been an exodus from the bigger cities toward places with access to “the great outdoors”. As most of you can attest, Colorado Springs most certainly has that…and so much more. We have had a number of new companies relocate here this year and there are more to come.
As I mentioned earlier, folks coming here all need housing, either home purchases or rentals, and this is adding to the home shortage we’ve experienced for the last several years. Those moving from states with very high home prices are coming in and paying cash and participating in bidding wars to get what they want. This makes it more difficult for locals looking to move, but it’s still possible to find what you want, need, and can afford.
It just takes more advanced planning and faster decision making. And of course, a professional, seasoned, and knowledgeable real estate agent like me on your side. It’s easy to see why companies such as Zillow have gotten out of the “selling” aspect of real estate. In today’s market it’s not for the timid or inexperienced.
My almost 50 years in the local residential real estate arena, coupled with my investment banking background, give me an edge that my clients have found to be crucial in helping them and their families realize their personal real estate visions.
Historically low interest rates will be going, going, gone and with today’s inflation it’s doubtful we will see those rates again, if ever. If you’re in the market, or even considering your options, time is no longer on your side if you delay.
If you’ve even considered selling your present home, now is the time. You’ve probably got more equity than you might imagine and when coupled with the “current” low interest rates—it might just make sense for you to make a move now--and most likely you can ‘trade up”. It’s the monthly payments that you need to consider, not the price of the new home. At today’s interest rates it’s possible that you can get “more” on a different home for not much more than you currently pay.
If you are curious as to what your present home might be worth today, simply call me for an appointment to view your home and provide you with comparables.
A new year brings with it a lot of new hopes and dreams. If Residential real estate is among your hopes and dreams for 2022, please give me a call at 593.1000 or email me at Harry@HarrySalzman.com and let me help make them come true.
And now for statistics…
DECEMBER 2021
Statistics provided by the Pikes Peak REALTORS Service Corp., or it’s PPMLS
Here are some highlights from the December 2021 PPAR report. Remember that the new format of this report no longer provides monthly statistics for each individual neighborhood. However, if you are interested in what’s happening in your neighborhood, I can provide you with this information through other means.
In El Paso County, the average days on the market for single family/patio homes was a low 13. For condo/townhomes it was 16.
Also in El Paso County, the sales price/list price for single family/patio homes was 101.4% and for condo/townhomes it was also 101.4%.
Since these are year-end statistics, I am providing you with both the regularly posted year-over-year monthly stats as well as the cumulative year-to-date comparison of 2021 to 2020.
Please click here to view the detailed 10-page report, including charts. If you have any questions about the report or to find out how it relates to your individual situation, just give me a call.
In comparing December 2021 to December 2020 for All Homes in PPAR:
Single Family/Patio Homes:
· New Listings were 995, Up 6.0%
· Number of Sales were 1,443 Up 4.9%
· Average Sales Price was $505,852, Up 15.7%
· Median Sales Price was $450,000, Up 18.4%
· Total Active Listings are 659, Up 24.3%
· Months Supply is 0.5, Up 5.0%
Condo/Townhomes:
· New Listings were 140, Down 13.0%
· Number of Sales were 219, Down 1.4%
· Average Sales Price was $351,825, Up 19.2%
· Median Sales Price was $335,000, Up 15.5%
· Total Active Listings are 89, Up 30.9%
· Months Supply is 0.4, Down 22.9%
The Cumulative YTD Summary: (comparing Jan-Dec 2021 to Jan-Dec 2020)
Single Family/Patio Homes:
- New Listings were 19,654, Up 4.8%
- Sales were 18,159, Up 4.7 %
- Average Sales Price was $491,768, Up 18.4%
- Volume was $8,930,015,112, Up 22.4%
Condo/Townhomes:
- New Listings were 2,795, Up 2.8%
- Sales were 2,688, Up 6.8%
- Average Sales Price was $327,364, Up 19.7%
- Volume was $879,954,432, Up 27.9%
Now a look at more statistics…
DECEMBER 2021 MONTHLY INDICATORS AND LOCAL MARKET UPDATE ILLUSTRATE OUR LOCAL TRENDS IN DETAIL
Colorado Association of REALTORS® , Pikes Peak REALTORS Service Corp, or it’s PPMLS
Providing greater detail than the above report, this contains information on both El Paso and Teller counties for Residential real estate.
The “Activity Snapshot” for all residential properties in El Paso and Teller counties shows the Year to Date one-year change:
- Sold Listings for All Properties were Up 3.2%
- Median Sales Price for All Properties was Up 18.6%
- Active Listings on All Properties were Down 6.8%
You can click here to read the 16-page Monthly Indicators or click here to get specific information on the geographical are of your choice from the 18-page Local Market Update. It’s a good idea to check out your own area or one that you might be considering in order to get a good idea of the local pulse. As an example, here is a detailed report on the Colorado Springs area:
housing market FORECAST FOR 2022
Keeping current matters, 12.17.21, CNN, 12.27.21
Experts are saying:
- No more record low mortgage rates. Lawrence Yun, chief economist for NAR expects the 30-year fixed mortgage rate to increase to 3.7% by the end of next year, but he noted that this will still be lower than the pre-pandemic rate of around 4%.
- Inventory will remain tight. Even as more properties became available as the spring buying season heated up this year, there were also more people looking to buy, creating fierce competition and pushing prices skyward. While the inventory picture is expected to improve in 2022, it will remain limited and grow only 0.3% this year, according to a Realtor.com forecast.
- Prices will keep rising. Home prices rose nearly everywhere in 2021 and while existing homes were up 13.9% nationally (ours were considerably higher), new construction prices nationally were about 19% higher than a year ago. That was another record.
A group of 20 top economic and housing experts brought together by NAR projected that median home prices nationally will increase by 5.7% in 2022. (I feel that Colorado Springs will be double that number.) The NAR survey participants said they expect the housing market and broader economy to normalize this year as the Fed tries to tame inflation.
- First-time buyers will continue to face challenges. The prevalence of all-cash offers, few available homes and skyrocketing prices pushed many first-time buyers out of the market last year. By the end of November, the share of first-time buyers had fallen to 26% from 32% a year before, the lowest level since NAR began tracking in 2008.
“We are creating a divided society”, said Yun. “People don’t feel like they are participating in what they consider to be American life through homeownership. All their work to build up savings can feel less meaningful in the face of rising prices.”
So, once more with feeling... if you’ve even thought about a new home, there’s no time to waste. Time is money, as we all know, and waiting to make a move is most definitely going to hit you in the wallet.
UCCS ECONOMIC FORUM UPDATE
College of Business, UCCS, updated 12.23.21
As always, I'm providing you with the most recent economic update from the UCCS Economic Forum. It provides data concerning all aspects of the economy, on both the national and Colorado Springs area levels.
Please click here to read the report in its entirety and if you have any questions, please give me a call.
