Colorado Springs home sales slump again in March, report shows
Colorado Springs-area home sales fell again last month as spiking mortgage rates continued to keep homes out of reach for some buyers. Colorado Springs home sales in March fell by 12.5% from the previous year, according to a new Pikes Peak Association of Realtors market trends report. The drop in sales came after the Federal Reserve began increasing interest rates in an effort to curb inflation. Home sales for the first quarter of 2024 were also down by 7.4%. Homeowners waited longer for their properties to sell, with homes spending an average of 56 days on the market in March, an increase from 48 days in the same month last year. Despite this, prices for homes sold in March rose by 2.2% on a year-over-year basis to $470,000. The supply of homes for sale remains historically low, with a 2-month supply of available homes based on recent sales.
Published : 4 weeks ago by Rich Laden [email protected] in Finance
Colorado Springs-area home sales fell again last month as spiking mortgage rates continued to keep homes out of reach for some buyers.
Sales totaled 941 in March, a 12.5% decline from the same month last year, a new Pikes Peak Association of Realtors market trends report shows. Except for a slight bump in February, year-over-year sales have dropped every month since June 2022.
Likewise, for the first quarter of 2024, home sales totaled 2,400, a 7.4% drop from 2,591 during the same period last year, according to the Realtors Association.
Homeowners also waited longer for their properties to sell last month; homes spent an average of 56 days on the market in March, an increase from 48 days during the same month last year.
The slowdown in local home sales came after the Federal Reserve began to hike interest rates early in 2022 in an effort to tamp down raging inflation. Mortgage rates followed, and the Springs-area housing market saw a drop in buying and selling because many buyers felt priced out of the market.
"A lot of people are on the sidelines," said real estate agent Harry Salzman of Salzman Real Estate Services and ERA Shields Real Estate in Colorado Springs. "It's no surprise. ... And it's a national thing. Let's face it, 2½ years ago, we were somewhere between 2½% and 3½% (for 30-year, fixed-rate mortgages). Today, we're more than double that."
Last week, long-term mortgage rates averaged 6.79% nationally, according to mortgage buyer Freddie Mac. During the same week in 2022, they were at 4.67% after starting the year at 3.22%.
The inventory of homes for sale rose to 1,868 in March, a nearly 19% year-over-year increase, according to the Realtors Association report. That translates to a 2-month supply of available homes, based on the number of listings and the pace of recent sales, the report shows.
Home listings, however, remain historically low, according to data maintained by The Gazette and based on Realtors Association reports. A decade ago in March 2014, the supply of homes for sale totaled 3,689; 20 years ago, it was just shy of 4,000.
"Sure, inventory has come back a bit, but it's still way off," Salzman said.
As the supply of homes for sale has remained historically tight, and demand has stayed strong in spite of higher mortgage rates, prices rose for homes that sold in March.
The median price for last month's sales climbed by 2.2% on a year-over-year basis to $470,000, the Realtors Association report showed. Prices now have increased for seven straight months after seven months of declines.
Going forward, Salzman expects housing activity to pick up over the next few months.
Spring and early summer traditionally are strong months for home sales because families tend to move and military personnel often transfer into Colorado Springs installations during that time, Salzman said. In fact, 40% of annual home sales are completed in April, May and June, he said.
In addition to an expected uptick in sales during the next few months, Salzman said housing industry experts and economists continue to forecast a decline in long-term mortgage rates. By the fourth quarter of this year, those rates could shrink to 5.9% to 6.1%, he said.
But since home prices continue to rise, buyers should lock in a purchase now instead of waiting for mortgage rates to fall, said Salzman, echoing what many real estate agents are telling clients.
"Because prices are appreciating today, I don't think that's going to stop," he said. "So you're better off to buy now and you can always do a (re-finance) on a mortgage a year, two years down the road.
Topics: Real Estate, Markets