Market Statistics June 2022 vs June 2021
The most dramatic ‘tell’ in the housing market shift that’s taking place in Colorado Springs is the number of active listings. They have risen 158% year over year! But don’t get too excited. A Buyer’s Market is when there are at least seven months of housing inventory on the market. We are still at only one month of inventory and continue in a strong Seller’s Market.
Rapidly rising interest rates continue to have the biggest impact in the local market shift. When the year began, experts were concerned we might hit interest rates close to six percent by the end of the year. We achieved that dubious goal sometime in June. As the month ended, they had fallen slightly to 5.84% for a conventional thirty-year loan.
Prices were up over eleven percent from the same period last year. The average single-family home price in El Paso County was an astounding $557,435. The days on market went from seven days last June to nine days this year. Another piece of the strong Seller’s Market puzzle – houses are still being sold, on average, in less than two weeks.
A contributing factor in the number of active listings was that new listings were up ten percent (normal in the June housing market), but home sales were down ten percent.
An interesting statistic between the years is that last year at the height of the market, only forty-two houses were withdrawn from the market in June. This year, seventy-seven were withdrawn, an eighty-three percent increase. Twenty-four listings expired this year compared to thirteen listings last June, an eighty-five percent increase. Interestingly enough, last year the average list price was $845,343 compared to $703,159 this year.
Housing Market Shifts May to June 2022
In the local Colorado Springs housing market shift from May to June 2022, the number of active listings rose almost seventy percent! The months’ supply of inventory is just over one month. That’s up from just over two weeks in May. What this number shows is it won’t be such a frenetic time for Buyers – not so much of a feeding frenzy. Instead of twenty showings the day a house comes on the market, there may only be one or two. That’s an expectation that will have to be discussed so Sellers are not panicked at the current slowdown in showings.
However, even with the lack of showings, offers are still brisk. On average they continue to be slightly over asking price. But there are absolutely no indicators that prices will drop in the foreseeable future.
First American explains it like this:
“While house price growth is expected to moderate from the rapid pace of 2021, strong home buyer demand against a backdrop of historically tight inventory of homes for sale will likely keep appreciation positive in the coming year.”
Summer 2022 Housing Market Predictions
Do national headlines have you questioning what’s going to happen with home prices? Experts forecast home prices will not fall or depreciate. Instead, they’re likely to continue appreciating, but at a more moderate, decelerated pace. But the housing market is always local, and Colorado Springs has a constantly moving population with our five military establishments.
Price deceleration does not mean price depreciation. If you are waiting for prices to come down, you may price yourself out of being able to purchase a home. Historically, when interest rates rise, home prices tend to rise or stay steady. Don’t make the mistake of thinking you’ll get a deal soon. The only thing that seems to be a given is that interest rates will continue to rise and prices will not be coming down.
The difference of three percent makes a huge impact in purchasing power. Last December at the going rate, the “average” buyer could afford a house worth $555,154.
In June 2022, the same “average” buyer would only be able to afford a home purchase of $403,890 with the change in interest rates. One obvious problem with this scenario is there are fewer homes available near $400,000 or below and the competition is fierce when one comes on the market.
With ten percent down, the monthly payment on a $500,000 purchase at three percent is $2,512. The payment on the same $500,000 at six percent is $3,312.
No economic forecasters are predicting any kind of price depreciation. The biggest challenge facing Buyers is rapidly rising interest rates. It is anticipated the rates will ebb and flow but continue to rise.
If you’re interested in a detailed look at what’s going on in the Colorado Springs housing market shift, call or text Mimi Foster. I’m happy to talk about your particular situation.