The Colorado Springs-area housing market smashed more records last month, as home prices and sales soared to new highs despite the COVID-19 pandemic's effects on the local economy.
According to the July market trends report by the Pikes Peak Association of Realtors and historical data compiled by The Gazette:
• The median price, or midpoint, of homes sold during July climbed to $377,000, a 13.6% year-over-year increase and blowing past the previous record of $360,000 set in April and tied in June.
• The average price skyrocketed to $427,593, up 14.8% over the same month last year and surpassing June's record of $401,980.
• Sales of single-family and patio homes totaled 1,978, a 19% jump over July 2019 and eclipsing the previous one-month high of 1,743 in June 2017. Through the first seven months of 2020, sales totaled 9,177, a decline of less than 1% from the same period last year.
When the pandemic took hold in March and April, the state of Colorado temporarily banned open houses and put tighter controls on home showings as a means of halting the spread of the coronavirus; following those restrictions, year-over-year home sales fell locally by 7.7% in April and nearly 28% in May.
That slowdown in activity, however, triggered a pent-up demand among buyers, many of whom are taking advantage of historically low mortgage rates to purchase homes, said Dean Weissman, a real estate agent and partner/owner of The Platinum Group REALTORS in Colorado Springs.
"We did see a sharp decrease, and then we saw this V-shaped recovery, where once things started opening up again, combined with historically low rates, it just really made the market surge for sure," he said.
Even as some people have lost jobs after businesses permanently or temporarily closed because of the pandemic, others continue to work and buy homes, Weissman said.
The local inventory of homes for sale can't keep pace with the demand. In July, just 1,390 homes were listed for sale, a nearly 37% drop from the same month in 2019 and the fewest for any July over the last 25 years, based on Realtors Association reports and Gazette data.
Homes are especially tough to find around $350,000, and many sellers in that range receive multiple offers that top their asking price by thousands of dollars, Weissman said.
"Anything that's $200,000, $300,000, $400,000 that's in nice condition, you'll definitely be in a multiple offer situation," he said. "I had a home that we put on the market for $295,000. We had offers up to $320,000 on it.
"It's just crazy," Weissman added. "We're bidding for clients in some cases, and in these competitive price points, we're going $25,000 and $30,000 over, and in some cases we're not getting the property. That's what's driving that median and average sales price. There's just a pent-up demand with a lack of inventory that is requiring folks, if you want the home and you want it bad enough, you'd better be willing to play the game."
The competition eases starting around $600,000, and sellers of higher-end homes need to be more conscious of pricing their homes correctly based on location and condition, Weissman said. Still, multiple offers are possible for upscale homes and he said he's even seen sellers of million-dollar properties receive multiple bids.
The Realtors Association report includes home sales handled by real estate agents, but not properties sold by owners. In July's report, 91% of homes sold were existing properties and the rest were new houses, with most sales taking place in El Paso County.