Colorado Springs Housing Market July 2021 to July 2022

Even with the fluctuating housing market, the real estate market in Colorado Springs is still strong. In June a key indicator of things to come was the drop in applications for new loans. This month we’re seeing the repercussions, with a drop of over seventeen percent in home sales locally.

Make no mistake – we have turned a corner from the insane times of selling houses in 2021. This is good news on many levels. It was fun to get twenty offers over asking price (albeit exhausting and stressful for everyone), but those times are gone. It’s not hysterical anymore.

While the country whispers recession, that is not the reason for our current fluctuating housing market. We are not in a housing crisis, we’re in a period of adjustment.

Active inventory climbed over one-hundred-eighty-one percent from the same month last year! That is one reason for the lessening of Buyer Hysteria. Unlike lax lending rules prior to the housing crash of 2008, the rules for borrowers are much more strict now. People have equity in their homes, which was not normal in the early 2000s.

One of the biggest reasons not to panic about the adjusting market is the supply of houses for sale is still ridiculously low and won’t balance out for several years. A Seller’s Market is when there are less than six months of inventory for sale. A Buyer’s Market is when there are more than seven months. There are currently one-and-a-half months of inventory in Colorado Springs, still solidly a Seller’s Market. This is an assurance home prices will remain steady but continue on an upward swing for years to come.

Home prices rose over twelve percent from last year but are still selling within the first two weeks of being listed.

Housing Market Shifts June to July 2022

One of the big changes in the fluctuating housing market over the past month has been that applications for Adjustable Rate Mortgages (ARMs) have doubled. Borrowers, spoiled by low interest rates for years and no crystal ball, are willing to ride the wave hoping rates will come down.

Between June and July this year, new listings are down over thirteen percent and sales are down almost eighteen percent. Active listings are up over twenty percent from last month.

Even though mortgage rates continue to rise (as we head into August they are hovering around six percent), there doesn’t seem to be a let-up of rising home prices. Homeownership is still one of the best hedges against inflation. No national expert is forecasting the decrease in home prices in the near future, so don’t let a fluctuating housing market slow you down if you’re ready to buy.

A KCM real estate blog post said: Homeownership is one of the best decisions you can make in an inflationary economy. You get the benefit of the added security of owning your home in a time when experts are forecasting prices to continue to rise.

Homeowners in Colorado have seen an average of over $92,000 gain in equity in the past year according to CoreLogic. (That’s the difference of what you owe on your loan and the current market value of your property.)

According to ShowingTime, there has been a decline in showings during the past month. This is another strong indication that the housing market is re-balancing.

End of Summer 2022 Housing Market Predictions

Prices and mortgage rates will rise while sales should remain brisk. Although it is a fluctuating housing market, it appears to be on track to normalize with the culling of buyers who can no longer qualify to purchase because of rising interest rates.

Many people are worried about the rise in foreclosures. Don’t be. It’s nothing like the collapse of 2006 where predatory lenders were offering subprime loans on unaffordable mortgages to desperate purchasers.

Foreclosures were at historic lows last year because of a nationwide ban as part of pandemic relief. They didn’t happen because they couldn’t happen. But foreclosures don’t mean the market is in trouble. It means the homeowner is struggling.

Less than twenty percent of those who took advantage of the moratorium are still in trouble. The rest have paid off their loans or worked out a repayment plan. The good news for those still in trouble is, most people who own their home now have equity and can sell and make a profit, unlike the short sales that permeated the market between 2008 and 2010.

The Federal Reserve is expected to continue to raise interest rates. They have three more meetings scheduled this year – September, November, and December. They have already increased interest rates four times this year. It would behoove you to act before those increases happen if you are thinking of purchasing or refinancing.

Your personal finances and season of life should be what motivates you to sell or purchase a home. Don’t let what’s going on in the ever-fluctuating housing market make your decision for you. Speak with someone who can give you facts you need to know to find your best outcome. Call me today and let’s talk about what you need to navigate these turbulent waters.