real estate

Home sales in the Colorado Springs area hit a seven-year high in 2013. In this 2012 photo, realtor Teri Wojcik fixes flags on the garage of a house for sale. (The Gazette/Jerilee Bennett)

Colorado Springs-area home sales in 2013 jumped to their highest level in seven years, even as sales fell in December for the second straight month, according to a Pikes Peak Association of Realtors report this week.

Local sales of single-family homes - excluding townhomes and condominiums - totaled 10,786 last year, a nearly 18 percent increase over 2012 and the most since 11,911 sales in 2006, the association's figures show.

Real estate agents have pointed to a better local economy, low mortgage rates and a pent-up demand on the part of buyers for the rebound in home sales, which had fallen to just under 8,200 in 2010 after the recession.

Home sales in December, however, totaled 680, a 3.1 percent decline from the same month a year earlier, according to the Realtors Association report. Sales also had fallen 4.3 percent in November, which marked the end of 16 straight months of year-over-year increases in sales.

The market softness the past two months might have resulted from the federal government shutdown that took place for a little more than two weeks in October, said Jack Beuse, a broker associate with Paradigm Real Estate in Colorado Springs and 2014 board chairman of the Realtors Association. The shutdown might have prompted some workers at local military contractors to delay purchases, he said.

Other real estate agents also have suggested the uptick in long-term mortgage rates the last few months - rising to an average of 4.53 percent nationally last week, up more than a percentage point from a year ago - caused some buyers to hold off.

Even as sales have slowed, prices have continued to rise. The median price of homes sold in December was $211,250, a 0.7 percent increase over the same month a year earlier and the 22nd consecutive monthly increase. The median is the mid-point of all sale prices. For 2013, the median price of all homes sold rose to $215,900, a 7.4 percent gain from 2012.

Beuse said he expects the single-family market to be relatively strong in 2014 - positive trends in sales and prices, although there probably will be some down months. Even as mortgage rates have risen, buyer are adjusting to the new rates, he said.

"It doesn't mean homebuying is going to stop," he said of higher mortgage rates, which remain a bargain compared with historical standards. In the late 1980s, for example, double-digit rates were the norm, Beuse said.

But even if they adjust to higher mortgage rates, some buyers still might have a tougher time purchasing a home. Last week, the Federal Housing Administration lowered loan limits in about 650 counties nationwide, including El Paso County.

As a result, the maximum amount that can be borrowed using an FHA-guaranteed loan is now $271,000, a reduction from $325,000. FHA loans require only a 3.5 percent down payment, which make them popular - especially with first-time buyers.

Federal regulators said they made the change to tighten borrowing standards now that the housing market is recovering.

However, Joe Clement, broker/owner of Re/Max Properties in Colorado Springs, said it's a step in the wrong direction.

"It's going to take certain buyers out of the market," Clement said. "It's going to hurt us in certain price ranges."


Contact Rich Laden: 636-0228

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