Looking Back at 2023’s Real Estate Market

Looking Back at 2023

During the first quarter of 2023, we saw our local real estate market adjust substantially and rapidly. The key metrics we track showed a shift from a robust seller’s market towards a more balanced market. The surge in mortgage rates over the past couple of years put buyers and sellers on the sidelines. Buyers were still getting used to these new rates above 6% which negatively impacted their buying power compared to 2021 and early 2022. Sellers, on the other hand, were hesitant to put their homes on the market as they were reluctant to give up their ultra low mortgage rate for a new rate which has more than doubled. Consequently, sales prices slipped ever so slightly during this period.

The second quarter saw the market peak for the year with a modest 3000 home sales— down about 25% from the year before. This persistent lack of new listings is what prevented significant declines in sales prices.

The big news during the 3rd quarter was the half-point rise in mortgage rates to 7.3%. This led to a 4th quarter slump in sales to a level not seen in over a decade. Fortunately, the lack of new listings mitigated the impact, allowing sales prices to in-crease modestly.

The year concluded on a positive note, thanks to the drop in mortgage rates from nearly 8% to 6.6%. The improved rates gave buyers about 15% more buying power, resulting in in-creased activity over the final months of the year. Prices during the last quarter saw an uptick of about 4%.

Trends in Fourth Quarter 2023

The final quarter of 2023 appears to have laid a sturdy foundation for the upcoming year. Most of the key metrics we monitor have stabilized and are exhibiting only single-digit fluctuations for the first time in several years:

Active listings have decreased by approximately 4%

New listings were down only 10% compared to 25% for most of 2023
Sales prices rose nearly 4%
Inventory increased nearly 15% (still too low)
Under contracts were down 8%
Mortgage rates seem to be stabilizing in the mid-6’s
Sales units were down nearly 15% (much better than the 25%+ we saw much of 2023)

Analyzing quarterly data allows us to really see trends.

There seems to be a few “new normal” themes as we step into 2024:

Mortgage rates in the 6’s are palatable to more buyers
Increased inventory levels of 2-3 months is better, but still favors sellers
Well priced listings, in excellent condition and in good locations will sell rapidly

Fun Facts From 2023 (El Paso County)

Most expensive sale—A home near Black Forest on 28 acres sold for $4,500,000.
Largest home sold—An estate home (pictured) across from The Broadmoor Hotel had 12,134 square feet, 7 bedrooms, 12 bathrooms and a 4-car garage.
Cheapest home sold—The town of Ramah takes bragging rights for the 3rd year in a row with the sale of a single family home for $55,000.
Smallest home to sell—A cozy little cottage with just 464 square feet near Old Colorado City.

Quick Hits From 2023 (El Paso County)

Number of units sold was 9,471, a drop of 2874 (↓23%) units from last year
Average sales price for the year was $539,342 an increase of $1733 (↑.03%)
The median sales price was $471,524, down $2033 (↓0.4%)
The number of active single family listings on 1/1/2024 compared to 1/1/2023 slipped 59 units to 1347
Inventory levels for the year averaged just under 8 weeks, compared to just 5 weeks in 2022
New home permits totaled 2665, down 940 units (26%)

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Home to the United States Air Force Academy, US Space Command, Fort Carson, Peterson AFB, Schriever AFB, US Olympic Committee & 23 Olympic NGB’s, US Olympic Training Center, Northern Command, NORAD, Garden of the Gods Park, US Olympic and Paralympic Museum, Cheyenne Mountain Zoo, Pro Rodeo Hall of Fame, Space Foundation
Outstanding higher education institutions; US Air Force Academy, University of Colorado at Colorado Springs, Colorado College, and Pikes Peak State College
Diverse industries including Aerospace, Healthcare, Cybersecurity, Defense Technology, Military, Manufacturing, Sports, and Tourism
Remarkable event venues including The Broadmoor Resort Hotel & Convention Center, Fine Arts Center, The Broadmoor World Arena & Pikes Peak Center, Weidner Field, Robson Arena, and the ENT Center for Performing Arts
Excellent business climate—highly educated workforce, high-tech infrastructure, and local airport
World-class trails for hiking and biking
Centrally located to allow residents the opportunity to enjoy all Colorado has to offer