Housing Market Conditions Reported February 2022 vs 2021
January housing market conditions continued to favor Sellers in Colorado Springs as we started the new year. For the past ten years, home prices have risen month after month. January saw an average sales price of $506,448, up from $438,677 in January of 2021. The average days on market was down almost seven percent from last year to just two weeks on the market.
On average, houses sold for 101.6% of the asking price, holding steady with last year. What that means for Buyers is that coming in slightly over asking price with a clean offer often wins the bid. (A “clean offer” is one that comes in with as few contingencies as possible and one that offers the Seller favorable terms.)
The number of Active listings rose just slightly year-over-year, but with an almost eleven-percent increase in new listings, the number of houses sold in January was up over thirteen percent from last year during the same period.
A Seller’s market is when there is less than six months of inventory of houses for sale. A neutral market is six to seven months of inventory. A Buyer’s market is when there are more than seven months of inventory available. Prices start to decrease in a Buyer’s market.
Market conditions in Colorado Springs in January showed only one week of inventory! With those numbers, it doesn’t appear there will be a change to a Buyer’s market in the foreseeable future.
This is a snapshot of what happened with existing single family homes in El Paso County in January 2022 compared to January 2021.
January 2022 vs December 2021 Market Stats
The Colorado Springs housing market conditions changed considerably as we slid into the new year. The number of new listings was up in January almost twenty percent (1,059 from 886). This is not unusual for end of year stats, even though the end of 2021 was considered a strong market.
However, sales were down in January over twenty-six percent from December (967 compared to 1,309). The number of Active listings between December and January was down almost nineteen percent. There were only 346 homes available in all of El Paso County at the end of January 2022.
Will Prices Go Down in 2022?
Supply and demand will keep prices on a steady rise. However, expectations are that the rapid increase of prices will slow down during the year. As the supply of houses drop, the demand will increase. When the number of Active listings are down and new listings decrease, market conditions see a natural rise in prices.
Because homeowners have much more equity than they did in 2008, no one is forecasting a housing bubble. The reigning in of an abundance of bad loans in the early 2000s will also help us not see a similar crash.
Interest rates have been crawling up since the beginning of 2022. That will impact the buying power of what a Buyer will be able to afford. For every point of increase in interest rate, it impacts a Buyer’s ability to purchase by about ten percent.
For instance, if a Buyer was thinking to purchase a $500,000 home, an increase of one percent in interest rate would limit their buying ability to $450,000. (10% of $500,000 = $50,000)
If you’re thinking of buying or selling this season, it is no cliché that it’s an excellent time to buy or sell. Please call, text, or email me to discuss your individual housing needs. I have decades of real estate experience and I’m here to help.