Colorado Springs News, Sports & Business

Gazette Premium Content Local home values see another drop in 2011

RICH LADEN Updated: April 20, 2012 at 12:00 am

Last year was another rough one for home values in Colorado Springs and surrounding El Paso County.

Whether it was the exclusive Kissing Camels neighborhood on the city’s northwest side, bedroom communities near Monument north of the Springs, or Stratmoor Valley and other lower-income areas to the south, single-family-home prices fell across the board in 2011, according to The Gazette’s seventh annual analysis of prices and sales.

Countywide, the median price of homes that sold last year slipped to $198,000, a 5.7 percent drop from 2010, The Gazette’s analysis shows.

It was the fourth year-over-year decline in countywide prices in the past five years — a reflection of tough times faced by the Pikes Peak region and other communities since housing slowed and foreclosures soared after the national economy nosedived in late 2007.

The 2011 drop was even more severe when distressed properties — short sales and foreclosures — were factored in; they dragged down the countywide median home price last year to $182,000.

The trend of lower prices continued into the first two months of 2012 — although prices rose in March and may have bottomed out, some industry experts said.

For now, lower prices and mortgage rates that are among the cheapest in several generations have made the Pikes Peak region a buyer’s market — for those who qualify for a loan and are confident enough in their jobs to take the plunge.

Kristie and Ryan Littleton were married last October and lived in a two-bedroom, two-bathroom apartment at a complex where Kristie works as a property manager. At their real estate agent’s urging, they began looking for a home in December.

In February, they bought a three-bedroom, three-bathroom, ranch-style house  on the Springs’ northeast side. They liked its large backyard, upgraded appliances and open floor plan, Kristie Littleton said.

Best of all was the price. The house was a short sale; the previous owners had struck a deal with their lenders and sold the house at a price that was less than what they owed on a pair of mortgages.

As a result, the Littletons paid $155,000 — about $70,000 less than what the previous owners owed on their loans. The Littletons’ monthly payment of $970 for their mortgage, taxes and insurance is only $10 more per month than the going rate for a two-bedroom apartment at the complex where Kristie Littleton works.

“We were just looking for a good price,” she said. “We weren’t too picky, just because we wanted to find the best bang for our buck. And we certainly think that we did that.”

Meanwhile, plenty of existing homeowners seeking to move up recognized that they had the upper hand over sellers.

Anne Marie Flynn, of The Platinum Group Realtors, said she’s had clients who have targeted pricey neighborhoods.

“They’re waiting for the right house to come on the market,” Flynn said. “And if it’s priced high, they’re waiting for the sellers to have a reality check.”

Those reality checks were tinged with disappointment for many sellers, who learned that a soft market and competition from distressed properties meant they had to lower their asking price — sometimes two and three times.

“Very frustrating,” said Nancy Rusinak, co-owner of Rusinak Real Estate.

Rusinak said a lack of buyers for higher-end homes has been caused, in part, by a lack of well-paying jobs. And buyers who could afford upscale properties had plenty of choices.

“Too much supply and not enough demand,” Rusinak said.  

Some real estate agents said they see signs that falling prices could be a thing of the past — although nobody is predicting significant gains this year.

Tony Rose, of Rose Real Estate — who believes that more lower-priced homes were sold last year than higher-end properties, which dragged down overall median prices — said the market has completed its correction and prices have stabilized.

Brian Maecker, of Re/Max Advantage, said he sees prices remaining flat this year and thinks the higher-end market could struggle again.

The Platinum Group’s Hank Poburka predicts that the decline in prices is coming to an end. Investors are buying, fixing and flipping homes, which helps to increase demand and potentially boost prices.

“Investors are scarfing up the good deals,” Poburka said.

Several agents also said the market is being helped by a big decline in the inventory of homes for sale.

Since October, the supply of homes for sale each month has been below 4,000 — falling as low as 3,157 in January, according to Pikes Peak Association of Realtors figures.

Monthly inventories for all of 2010 and most of 2011 were well above 4,000 — nearly hitting 6,000 in mid-2010.

With fewer homes on the market, there’s less competition for sellers. If demand increases because of low mortgage rates and improved consumer confidence, the combination of factors eventually could drive up prices, experts said.

Joe Clement, broker-owner of Re/Max Properties, had a client in the newer Wolf Ranch subdivision who recently listed a well-maintained home for $360,000 Showings were strong, and the owner received two quick offers.

“We’re going to get top dollar for this family,” Clement said.

But some experts remain cautious; several factors always are at play that could affect buying decisions. A sudden jolt of bad economic news and rising gas prices could discourage buyers, experts said.

Some agents said a spike in inventory — either from sellers jumping back into the market or an influx of bank-owned properties being put up for sale by lenders — also could slow buying and selling and hold down prices.

Mortgage rates also remain a wild card. They’ve hovered near 4 percent for a 30-year, fixed-rate loan since September. But if rates jump to 5 percent, that’s a 25 percent increase — and a corresponding loss of consumer buying power, said Stuart Scott of the Stuart Scott Ltd. Group and ERA Shields Real Estate.

“Everybody thinks things are always going to be the way they are now,” Scott said. “They’re not.”

Click to view the 2012 Neighborhood Guide

Comment Policy

Colorado Springs Gazette has disabled the comments for this article.
You've reached 4 FREE premium stories this month

Simply register to continue. It's free.

Register Learn more

Already registered? Click here to login.

Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
SEP
16
SEP
17
SEP
18
SEP
19
SEP
20
SEP
21
SEP
22
SEP
23
SEP
24
SEP
25
SEP
26
SEP
27
SEP
28
SEP
29
Advertisement