HARRY'S BI-WEEKLY UPDATE 8.23.21
August 23, 2021
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 real estate issues that will help to make you a more successful and profitable buyer or seller.
MORE HOMES FOR SALE BUT THE MARKET IS STILL FAVORING SELLERS
The good news is there are more homes for sale, giving buyers more choices than they’ve had in the last year or two. However, there still aren’t as many available homes as there are potential buyers so it continues to be a seller’s market at present.
I’ve had more listings in the last month than I’ve had for some time and while the number of offers has decreased somewhat, the homes have sold quickly and for over asking price. From where I sit, it appears that more and more folks are wanting to test the market and see what they can get for their existing home while prices are still at all-time highs. Most of those I’ve been dealing with have a good idea of where they might want to go next, either trading up or down or relocating to another state to be near family members or for work situations.
With interest rates continuing to be historically low, the higher price of the homes for sale hasn’t been much of an issue since the monthly payments for many remain lower than even several years ago. I tell my clients not to consider the price of the home, but to look at what their monthly output will be. Today’s rates are allowing them to buy more house for the same or slightly higher monthly payment.
I’m also seeing more clients looking to find existing homes rather than wait for new construction, which is a change from even six months ago. Part of that is due to the time it’s taking to build a new home, and the uncertainty of the exact price because of materials and labor.
A recent article in “The Wall Street Journal” discussed the fact that Austin, Texas has had the biggest national increase in homes selling over the listing price. That immediately stuck home for me because Colorado Springs is often compared to Austin due to the type of residents they attract, namely those in the technology fields. And with all the new companies wanting to relocate to the Springs, it’s likely our selling prices will stay high for some time to come. The good news there is that our prices still remain lower than Austin, a boon for companies concerned about the cost of relocating and hiring employees.
It has taken a lot of creativity on my part to help my clients navigate the current buying and selling wars. Fortunately, I’ve had 48+ years of experience and, combined with my Investment Banking background, this is a definite plus for those I work with.
When I’m asked, “Is now good time to buy or sell?”, I always answer the same way. “If it’s right for YOU, then it’s a good time to buy or sell.” There’s no standard formula for buying and selling a home and that’s why I spend time with each client to determine what is best for their particular situation. It’s important to find out what someone is looking for and determine why they want to buy, sell, or invest in a home as everyone has different wants, needs and budgets. Those type of questions need to be addressed upfront and we can proceed from there.
The best move you can make at present is to call me at 593.1000 or email me at Harry@HarrySalzman.com to get any and all of your Residential real estate questions answered.
I look forward to speaking with you.
COLORADO SPRINGS HOME PRICES JUMP HIGHER IN SECOND QUARTER 2021…AMONG MOST EXPENSIVE IN THE COUNTRY
The National Association of Realtors, 8.12.21 and “The Gazette”, 8.20.21
Median prices of single-family homes across the nation rose double-digits for Quarter Two 2021 in 94% of the 183 metro areas surveyed quarterly by The National Association of Realtors (NAR), with the median price nationally rising 22.9% to $357,900.
Colorado Springs surpassed that, with the median price of single-family homes jumping 24.3% to $439,200 during the second quarter of the year. This price reflects detached, single-family and patio homes but not townhomes or condominiums.
The median price in the Springs ranked 28th highest of the cities surveyed, while the appreciation rate was tied for the 40th percentage increase. And once more, the good news is that while our home values are increasing, they are still less than those in the Denver and Boulder areas, which makes our city more attractive to potential companies wanting to relocate.
To see all 183 metro areas in alphabetical order, please click here. To see them in ranking order, click here. And if you have any questions, you know where to reach me.
A LOOK AT HOUSING SUPPLY AND WHAT IT MEANS FOR SELLERS
KeepingCurrentMatters
Even with more listings than in the past few months, one of the biggest topics in today’s real estate news is the shortage of available homes for sale. Simply put, demand exceeds supply, and that equals a seller’s market.
As a seller, it means your home will likely get more attention and offers. However, as life returns to a new “normal”, you could be wondering if that’s something that will change.
While some blame for the current inventory shortage may go to the pandemic, it can’t take all the credit. It did cause some sellers to hold off on listing their houses over the past year, but the truth is the low supply was years in the making.
Where Did the Shortage Come From?
It’s not just today’s high buyer demand. The low supply goes hand in hand with the number of new homes built over the past decades. According to Sam Khater, VP and Chief Economist at Freddie Mac, “The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes.”
Data from a recent report from NAR tells the same story. New home construction has been lagging behind the norm for quite some time. Historically, builders completed an average of 1.5 million new units per year. However, since the housing bubble of 2008, the level of new home construction has fallen off.
The NAR report stated, “the underbuilding gap in the U.S. totaled more than 5.5 million housing units in the last 20 years. Looking ahead, in order to fill an underbuilding gap of approximately 5.5 million housing units during the next 10 years, while accounting for historical growth, new construction would need to accelerate to a pace that is well above the current trend, to more than 2 million housing units per year”.
What that means is that if we build even more new homes than the norm every year, it will still take a decade to close the underbuilding gap contributing to today’s supply and demand mix.
We are already starting to see an increase in new home construction but this alone can’t bridge the supply gap we’re facing right now.
In the State of the Nation’s Housing 2021 Report, the Joint Center for Housing Studies of Harvard University says:
“…Although part of the answer to the nation’s housing shortage, new construction can only do so much to ease short-term constraints. To meet today’s strong demand, more existing single-family homes must come on the market.”
Early Indicators Show More Exiting-Home Inventory Is on Its Way
The latest reports show that the housing supply is growing gradually month-over-month, both nationally and here in Colorado Springs.
According to Lawrence Yun, Chief Economist for NAR, “As the inventory is beginning to pick up ever so modestly, we are still facing a housing shortage, but we may have turned a corner”.
What Does All of This Mean to YOU?
Just because life is starting to return to a “new” normal, it doesn’t mean you missed out on the best time to sell. It’s not at all too late to take advantage of today’s seller’s market and use rising equity and low interest rates to make your next move.
If this is something you’ve even considered, give me a call and let’s see how we can make your Residential real estate dreams come true.
