Economists have grown less bearish about home prices this year but Colorado Springs, like much of the rest of the nation, remains a buyer’s market.
So, what it’s like to shop for a house today? Deals are plentiful, to be sure. But it’s not what you’d expect.
Buyers today need plenty of patience, a willingness to compromise and, more than ever, good credit. They also may be surprised to find sellers unwilling to budge too far from their asking prices.
“Buyers come into this market looking for blood in the water. They expect to get fabulous homes for huge discounts,” said ReMax Properties’ Peak Dream team broker Sylvia Jennings.
Bargains can no doubt be found, Jennings and other real estate agents said, but buyers need to recalibrate their expectations.
In many cases, sellers have already discounted their original asking price two or three times by the time a buyer comes along. For a buyer, that means there’s not as much room to negotiate down.
All sorts of other complications can also sour a deal.
Take, for example, the experience of Sgt. Brad Baker, who moved here after being assigned to Schriever Air Force Base.
The airman rented an apartment for a while, but wanted to take advantage of low interest rates and an abundance of short sales.
“I was very surprised at the amount of short sales,” he said. “The interest rates really propelled me, and prices seemed to hit bottom this spring.”
Working with Platinum Group agent Bobbie Price, his first short-sale contract — a full-price offer — wasn’t accepted by the bank because the sellers had priced the property too low.
He found a second home in Stetson Hills, but as a short sale, it took almost three months to close.
“It was a pain to wait around two to three months, but I didn’t have a family to move, so it worked out OK. I probably would have given up after the first deal fell through if I hadn’t been working with (Price),” he said.
Delays in short-sale deals with lenders are common.
Kevin and Heather French moved here from Phoenix with their 1-year-old earlier this year. After two deployments overseas, Kevin was transferred to Fort Carson. Heather began previewing homes online in January before flying in to house-hunt. She worked with Metro Brokers’ Brian Wess, who showed her dozens of homes during a weekend visit to town.
Like Baker, the Frenchs focused on short sales and bank-owned homes. They found their perfect home in Fountain.
The family was able to qualify for a VA loan with no down payment, but dealing with the bank seller was frustrating.
“They’re just not motivated. They don’t want to negotiate with you,” she said. From contract to closing, the sale took almost three months.
Unfortunately for the family, the house is already back on the market as a rental: Kevin French found out the day the house went under contract that he was being transferred again — this time to Fort Polk, La.
Buyers also have discovered that even in this market, they may have to be willing to spend a little more to get more.
Lisa McCall and her husband had to write contracts on more than one house before they found the right one.
They’d originally looked at homes in Littleton, but found them 20- to- 30 percent more expensive than those in Colorado Springs. They toured 30 to 35 houses before writing a contract.
The first home they identified was in their $200,000-price range and was big enough, but the seller wasn’t willing to fix the roof and other problems discovered during the home inspection.
They ended up buying a different house.
“We had to go up a little in price, but with interest rates down, we could qualify for more house — plus we got the Home Buyer Tax Credit. That was a big incentive,” she said.
Buyers at the top end of the market have certainly found that less buys more in today’s market.
“The difference in what sellers with homes priced from $800,000 and up are asking and what they actually get is about 28 percent less — at least in southwest Colorado Springs,” said ERA Shields broker Stuart Scott.
George and Amy Tracy planned to downsize from a large home in District 12, so they began checking MLS listings online and visiting open houses last year. Eventually they put their home on the market. It sold in four months for $150,000 less than the asking price.
“Stuart … convinced us we’d make it back on the buying side,” Amy said.
Indeed, the Tracys soon realized that their dollars — and their strong credit score — would allow them to stretch further than they’d originally thought.
Instead of downsizing, they ended up buying a 7,000-square-foot million-dollar home in the southwest neighborhood they’d always hoped to move into.
“Honestly I don’t think we would have gotten this home at the top of the market,” Amy said. “It’s our dream home.”