Colorado Springs-area home prices rose again last month, while sales continued on track for a near record year — signs that the local housing market remains healthy, according to the latest report by the Pikes Peak Association of Realtors.
The median price — or midpoint — of homes sold in October climbed to $305,000, up 8.7 percent over the same month a year ago, the association’s report shows. Median prices have climbed each month for the better part of the last four years.
Other key points in the October report include:
• Home sales totaled 1,320, a 7.8 percent, year-over-year decline and the eighth straight monthly drop in sales. Still, the number of homes sold last month made it one of the best Octobers on record.
• Through the first 10 months of this year, sales have totaled 13,147, a 3.3 percent drop over the same period last year. But if sales continue at a similar pace in November and December, this year’s total would approach last year’s record number of 16,337.
• Homes sold in an average of 31 days after hitting the market. That’s up by two days from the same month last year, but down from previous Octobers. Three years ago, for example, homes languished on the market for an average of 71 days before selling.
• The supply of homes for sale totaled 2,374 in October, up almost 23 percent on a year-over-year basis. Even so, the inventory in October represented only a 1.8-month supply of homes, based on the pace at which they’ve been selling.
Rick Van Wieren, a real estate agent with Re/Max Properties in Colorado Springs, said the overall single-family houisng market remains “super healthy.”
Yet, the 1.8-month supply of homes for sale is “well below what is typically termed a normal market,” Van Wieren wrote on his website about current conditions. One result of the tight inventory: a “growing disparity” between the median list price of homes for sale and the median price of properties that actually wind up selling, he said.
“This could point to a new affordability gap at the low end of the market,” Van Wieren said. “As more affordable homes become scarce, buyers may be finding it more difficult to purchase the homes that are actually for sale.”
Also, some buyers haven’t seen much in the way of pay raises, while long-term, fixed-rate mortgages have inched toward 5 percent. As a result, some buyers can’t afford pricier homes, and are forced to turn back to the lower end of the market where there aren’t enough homes to keep pace with demand, Van Wieren said.
“Buyers are having a harder time with the (monthly) payments to go higher because their income has not increased as much and interest rates have increased some, which puts them at a disadvantage at any given point,” Van Wieren said.
The situation, however, isn’t a crisis, he said. Homes continue to sell even as mortgage rates have risen, Van Wieren said. And in some cases, sellers have recognized that buyers might have less purchasing power and therefore are dropping their asking prices — although sellers continue to have the upper hand for the most part, he said.
“This market is still very much a seller’s market,” Van Wieren said.
The Realtors Association report compiles home sales reported by real estate agents who are members of the group; it excludes homes sold by owners. Typically, about 90 percent of sales take place in El Paso County, with additional transactions occurring in other Front Range counties.