Q3 Real Estate Market Update
Colorado Springs Real Estate Quick Facts
- Mortgage rates improved nearly 1 point during the Quarter and nearly 1.5 point better than SQLY
- Average active listings for the quarter were 2349, compared to 1693 from the SQLY (up 38%)
- Total new listings for the quarter were 3520, compared to 3187 from the SQLY (down 10%)
- Sales for the quarter were 2483 units, compared to 2506 from the SQLY (flat)
- Average sales price for the Quarter was $563,265 up from $552,834 during the SQLY (up 1.8%)
- Average median sales price for the Quarter was $494,600 up from $479,200 (up 3.2%)
- Average days on market for sold homes was 39 for the quarter, up from 29 days from the SQLY
- Single family permits YTD were 2296 compared to 2130 from the SQLY (up 7%)
Market Summary
The Mortgage Rate Hype – Following the recent Fed rate cut, expectations for a housing market boost haven’t materialized. When the Fed cuts interest rates, this does not include mortgage rates. Mortgage rates are based on the bond market. With that said, mortgage rates had dropped to 6.08% before the interest rate cut. We had hoped the publicity around the in-terest rate cut would bring more buyers back into the market, but that hasn’t really occurred.
We think this is due to a few reasons;
– Presidential Election: Many potential buyers, including investors, tend to postpone major financial decisions until after elections.
– Buyer Sentiment: First-time homebuyers in their 20s and 30s are accustomed to the COVID-era 3% rates, making the current 6.5% seem high, despite it being historically favorable (average over 50 years is 7.74%).
– Seller Hesitance: Many sellers prefer to keep their low mortgage rates and are waiting to sell as long as they can withstand the inconvenience/pain of their current home. However, new listings have increased by 8%, a trend expected to continue.
It is a good time to buy a home – While mortgage rates are important, the overall home-buying cost also involves market competition. Currently, there is significantly more inventory (the highest in almost a decade), providing buyers with more options and less bidding compe-tition, leading to potentially lower prices. Also, buyers should know that they do not need to put down 20% for a downpayment; various financing options are available, including VA loans with no downpayment FHA loans with as little as 3.5%, and Conventional products with as little as 3% down. Understanding these options can help buyers buy now and build equity ra-ther than continuing to pay rent and never see any of that capital again.
Sellers: The market has softened; most homes do not sell in the first week any longer, nor do they receive multiple offers. However, well-priced and well-maintained homes will still attract buyers, sell for higher prices, in the shortest time.
