Single-family homes sold briskly last month in the Colorado Springs area, while prices rose again — good news for sellers, but an increasingly tough time for entry-level buyers trying to find an affordable house, one veteran real estate agent says.
According to the latest report by the Pikes Peak Association of Realtors:
• Local home sales totaled 1,394 in September, a 9.5% jump over the same month last year. Through the first three quarters of the year, sales totaled 12,177, ticking up 0.7% from the same period in 2018.
• Homes spent an average of 26 days on the market before selling in September, practically unchanged from 27 days a year earlier.
• The median price, or midpoint, of homes sold in September rose to $325,500, or 6.5% higher on a year-over-year basis. Last month’s median didn’t match July’s record high of $332,000. Prices now have risen every month year over year since December 2014.
• The supply of 2,089 homes listed for sale last month fell 14.7% from the same time last year. Inventories have dropped to historically low levels in recent years; typical September listings topped 3,000 and 4,000 in years before the Great Recession.
While the single-family market remains strong, the supply of $300,000-and-under homes — which had been the area’s most affordable price range — continues to tighten.
Through Thursday, sales this year of homes priced from $200,000 to $300,000 totaled 4,268, or about 600 less than during the same period in 2018, according to Joe Clement, broker-owner of Re/Max Properties in Colorado Springs. He cited figures pulled from the local Multiple Listing Service by his staff.
Why were there so many fewer homes sold in the lower price range?
Simple: There aren’t as many available to purchase, Clement said. Resale prices have spiked and builders can’t construct homes for under $300,000, he said.
Conversely, sales of homes priced from $300,000 to $400,000 totaled 4,209 through Thursday — about 800 more than during the same time a year ago, he said.
“What that really means is, we can’t keep up with that price range (under $300,000) because there’s no new-builds, there’s no people going backward on their prices,” Clement said. “Their prices are all going up. It used to be worth $275,000; it’s now worth $325,000 or whatever. They disappear.
“What does it mean?” Clement added. “It means to get the same house, you’re in the mid $300,000s, which is the average price nowadays. And you have to have the income stream, the household income stream, to afford $75,000 to $100,000 more, $50,000 more, whatever. Affordability is a worry for these young families and people trying to get into ownership. It’s just kind of slipping away.”
On the plus side, however, more homes in higher price ranges — $500,000 and above — are selling at a faster pace than in past years, Clement said.
Also, average mortgage rates have fallen well below 4%, allowing some buyers to afford more home even as prices rise. This week, 30-year fixed-rate mortgages averaged 3.65%, down from 4.71% a year ago, according to mortgage buyer Freddie Mac.
Meanwhile, the new home side of the market rebounded in September.
Building permits issued for the construction of single-family homes in El Paso County totaled 340 in September, up 17.7% compared with the same month last year, according to a report by the Pikes Peak Regional Building Department. It was the first year-over-year gain in building permits since November.
Year to date, building permits now total 2,696, down nearly 13% from the same time in 2018.