The Colorado Springs residential real estate market has more than just rebounded. It’s on fire.
“This is probably the best market for selling a house in 12 years,” said Prudential Rocky Mountain Realtor Sylvia Jennings.
Local real estate agents are quick to share stories about 20 or more showings on a single property, multiple offers and making sales before properties even go up on the multiple listing service.
“If a buyer looks at a home and likes it and it’s priced correctly, they know they can’t just putz around,” said Joe Clement, broker owner of Re/Max Properties. “They have to make a move.”
And buyers need to be prepared to offer close to the asking price or even more, said Dominic DaSilva, broker owner of Sellstate Alliance Realty.
“Sellers have become aware that the market dynamic has shifted,” DaSilva said. “And buyers need to be realistic.”
That means no more lowball offers or big concessions.
Becky Gloriod, a broker with the Gloriod Team, said she received two offers in three days on a $100,000 townhome and a full-price offer on a $210,000 townhome within two days of its listing.
“Under $250,000, they’re flying off the shelf,” she said.
And that price range is the key, she said. The primary buyers today are still first-time buyers and investors who are looking for lower-cost homes. While Gloriod and others said that’s already starting to change and the market for higher end homes is probably not far off, it’s definitely a key to the current market.
More than 92 percent of recent home sales to close were priced under $400,000, she said, adding that another 5 percent were priced between $400,000 and $500,000. Homes priced more than a half million dollars are still a tough sell.
Clement said most buyers are looking for homes priced in the same range, and there just aren’t many of them.
There were 3,144 single-family listings on the MLS earlier this week. Almost half — 1,417 — were priced under $250,000. There were also 990 homes in that price range no longer on the market because they were under contract.
Because it’s hard to find a nice home in that price range, multiple offers and escalating bids are becoming more common. As a result, prices are climbing.
Matt Pickett, broker owner at Skyline Properties, said he worked with a client who just sold his home for $180,900.
The price isn’t anything spectacular, except that the seller just bought the house through Pickett 13 months ago for $164,000.
“He didn’t do anything to it,” Pickett said. “He just moved into it and lived in it.”
The seller will walk away with $13,000 when the deal is done — almost $1,000 for every month he owned the house.
As prices climb on lower-end homes, there is room for move-up buyers to transition into the $300,000 to $500,000 home price range. And that’s starting to happen, Realtors say. Anything under $400,000 will sell in a short time as long as it’s in good condition.
“It’s a great time to upsize,” Gloriod said.
There’s still a lot of value in the market for homes priced higher than $300,000 and that market is already starting to move more.
As the market heats, banks are backing out of agreements to short sell properties — no longer allowing buyers to pay less than the previous owner owed.
“I think that market has come and gone,” Pickett said. “The short sale is going to be extinct within 18 months.”
He said he knows of several buyers who have had properties under contract for a year or more. The market today is a lot different than it was a year ago and the banks are realizing they can get more if they foreclose and sell the property.
Even if banks sell what would have been a short sale to an investor they could come out ahead.
El Paso County Trustee Tom Mowle said he’s had more than 100 people crowding into his foreclosure auctions the last month. And bidding is competitive. Major national corporations have started bidding against regular local investors, driving up prices. And foreclosures have slowed to their lowest level since the state started tracking them in 2007.
Investors are keen to buy lower-priced homes on the open market because they have to put at least 20 percent down for a loan.
“I got a call from a guy who wanted to do 20 fix and flips,” DaSilva said. “If you’re able to get one, you’d be happy. I think most of the people who are doing that now have to buy at a price where they’re probably not making much money.”