For years, through good and not-so-good times, I’ve provided an eNewsletter twice a month for a mailing list of clients, friends and others. Business Journal readers should recall one of those letters appearing here a few months back, describing how well the local market had performed in February.
The next eNewsletter wasn’t scheduled until next week, but the residential real estate news this week has been so spectacular, for Colorado Springs in particular, that it made no sense to wait in sharing it.
National Association of Realtors (NAR) has just published the “Median Sales Price of Existing Single Family Homes for Metropolitan Areas.” The reported average median sales price gain of the 150 largest communities in the U.S. was 11.3 percent over the same time period last year. These figures are calculated from every closed sale listed in the MLS.
Colorado Springs has experienced a median sales price gain of 13.1 percent for that same time period. I have always liked to use the words “relative strength” to compare a house, a neighborhood, price ranges, sales, etc. The fact that our local market has appreciated by about 16 percent better than the average of the nation’s 150 largest communities shows that the Colorado Springs population is more confident in home ownership than in many other cities nationwide.
What this tells us:
With the increase in demand for homes and the supply of listings greatly reduced, the basic expectation is that our home values and prices will continue to increase.
Sellers are receiving a higher price for their homes and buyers are agreeing to pay more today vs. one year ago.
Now is a great time to upgrade to the home you have been wanting. Many people have been waiting to make a move to a better neighborhood because the former marketability and value of their existing home may not have been at a reasonable selling price.
Buyers are taking advantage of the still historically low mortgage interest rates, not knowing how long they’ll last.
This appreciation also has been a terrific gain to homebuilders, as homeowners now have the equity available to build.
The NAR survey comparisons are produced approximately six weeks after the end of each calendar quarter. Since this only compares the first quarter 2013 to last year’s same time period, we already know that our local market conditions continue to escalate even through last month, April 2013.
From where I sit, I can honestly say I haven’t seen this kind of residential activity locally in a good number of years, and it just keeps getting busier.
Here’s how this news hits home in Colorado Springs: Prices definitely are going up. Last week the rental vacancy here was 4.4 percent. That’s called full. But people are so much more confident with the stability of their job, the strength they see in the community and vacancies being so low, they are taking advantage of it. They see that it’s cheaper to own than rent.
The Wall Street Journal reported that “home prices in metropolitan areas saw their biggest year-over-year gains in more than seven years in the first quarter, evidence that the housing recovery is spreading across the nation.”
I have been providing this NAR quarterly data to our readers for many years and do not recall a gain like this recently published quarter, in our local market, since we first created our eNewsletter!
Here’s another local example: Last week, a longtime client wanted me to list an investment house in Village Seven that had been occupied by a tenant for the past eight years. I made some suggestions as to how the home might be more marketable with a few updates.
The house went on the market as a new listing on MLS at approximately 11:30 a.m. on April 28. By the end of that same business day we received not one, not two offers at full price, but a third offer just over list price and a fourth offer for considerably over list price. All on the listing day. The next day another offer was received, though it was too late by then.
Talking to the other Realtors whose offers were not taken gave us all a glimpse at the “new normal” that is trending in real estate now. There are simply not a lot of choices of listings compared to a year ago, and current listings spend fewer days on the market.
And the best part is that these are all absolute, black-and-white facts.
Harry A. Salzman is the broker/owner of Salzman Real Estate Services Ltd. To contact him, or to receive his bi-monthly eNewsletter, call 598-3200 or email Harry@HarrySalzman.com.