LINDA LEITZ PHOTO

Linda Leitz

If you’ve considered making a change in your housing situation lately, you’re probably befuddled by the current real estate market.

You’re not alone. Bobbi Price with The Platinum Group Realtors in Colorado Springs has been a real estate agent for more than 40 years and says the last two years have been the craziest that she has seen.

One metric used by real estate agents to assess market activity is the average number of days on market — the time from when a property is listed for sale to the day a buyer puts it under contract. 

In August, it took an average of 17 days for a home to sell — almost double from nine days in August 2021, according to the latest Pikes Peak Association of Realtors market trends report.

Contract terms also have changed. Escalation clauses — in which buyers would submit offers that promised to top a rival's bid by several thousand dollars — are disappearing, Price said.

And while buyers still submit bids that might exceed a seller's asking price, such over-the-top offers aren't as common as they were months ago. And whatever sellers might be asking, their houses will sell if they're priced to realistically reflect their true market value, Price said.

According to Price, data provided by Empire Title of Colorado Springs shows average home prices have increased 12% from August 2021 to August 2022 in El Paso County and parts of Teller and Douglas counties.

For-sale listings and inventory more than doubled during the same period, though homes were down more than 6%. This shows that prices are up and more units are available, but they aren’t selling as quickly as prices and availability increase. 

Mortgage rates also underscore this unusual trend.

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Since the beginning of the year, mortgage rates have approximately doubled. A year ago, a buyer who made made a 20% down payment on the value of a home, and with good credit, could obtain a 30-year, fixed-rate mortgage in the range of 2.75% to 3.25%. Now, with the same down payment and credit score, a buyer is looking at a long-term rate of 5.25% to 6%.

The result, Price says, is that some buyers — especially first-time purchasers — have been priced out of the market,

Does this mean that it’s a good or bad time to sell? And is it a good or bad time to buy?

Price said the market began to shift around April, and now is transitioning from a seller’s market to a balanced market between buyers and sellers, which is more of a normal market.

If you have a reason to move — upsizing, downsizing, moving to another area — then this is your time to buy and/or sell.

Data that The Platinum Group compiled indicates that from 1992 to 2021, which includes the Great Recession, home values in Colorado Springs appreciated at an average annual rate of 5.9%.

While a home is the largest investment for many consumers, Price advises, "buy a house because you want to live in it. It’s a long-term investment."

Linda Leitz is a certified financial planner. She can be reached at linda@peaceofmindfin.com.

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