July’s housing numbers* are in and they brought with them some interesting data. We saw a downward trend in several categories that we haven’t seen in several years. Does this mean that we are heading to a housing Bear market? Not necessarily. With home prices beginning to climb to a point where renters are wondering if they can afford to own or if current owners are able to upgrade their current housing situation, some type of correction to the housing market was inevitable.
Active Listings**: As of July 31, 2018, there were 2,382 Homes for Sale (Active), compared to 2,360 the same time the previous year. There were 1,884 “New to the Market” listings in July 2018, compared to 1,942. In 2017 there were 1,932 such homes added to the market in July. In 2015 there were 1,882 homes added to the market and in 2014 there were 1,647 homes added to the market. This year marks the first time we have seen a downward trend in this category in three years.
Total Under Contract: A total of 2,279 homes went Under Contract this year, compared to 2,637 in 2017, and 2,928 in 2016. One can argue that there was a dip in homes under contract from June to July in 2017 as well. However, last year the dip was only 1% whereas this year the dip was 4%.
Total Sales YTD: This report begins to reveal where the Colorado Springs housing market might be headed. The total YTD Sales in 2018 are 9,296, compare to 9,284 this time last year, and 8,791 in 2016, 7,651 in 2015, and 6,434 in 2014. In 2015 the July Home Sales jumped a whopping 1,217 from the previous year. In 2016 that jump was 1,140, and in 2017 the jump was 493. One might say that we are still up 12 home sales versus last year. That is true, but when we visit the Cumulative Summary Report a little later, we will be able to get a much better understanding what the current Colorado Springs housing market trend is doing.
Average and Medium Sales Prices: The average sales price in July was $347,517 and the medium price was $310,000. July was the first time we had “lower-highs” in these numbers since last year. This information alone shouldn’t be a cause for concern. Until one looks at the Cumulative Summary Report you get a better picture of what the current Colorado Springs market is doing, which we will visit a little later in this report.
Sold Listings Analysis: In July 2018, we saw an interesting dynamic in homes sold by price range. There were 85 fewer homes sold in the price range “Up to $199,999” compared to July 2017. In the price range between $200,000 - $299,999 that drop was 80 homes. We saw a jump of 84 homes in the $300,000 - $399,999 price range, and a jump of 18 homes in the $400,000 - $499,999 price range. This data tells us that home sellers are very happy because they are getting more money for their Colorado home sale than ever-before.
PPMLS Statistics Cumulative Summary: This report begins to put a lot of the pieces together for us and we can get a much better look at what the true Colorado Springs Housing Market trend is doing. Even though the Colorado Springs housing market shows a “+12” Year to Date number, that alone can be very deceiving as we will see when we dig deeper into this report. We started the year very strong in January with 30 more homes sold compared to January 2017 which is a 3% jump. In February that LY jump was 146 homes or a whopping 18% jump. By March we begin seeing this trend lose momentum. In March we had 16 fewer homes sold (-1%), April brought us 23 fewer homes (-2%), May brought us 64 fewer homes (-4%), June had six fewer homes (n/a), and in July we had 54 fewer homes sold which is a 3% LY Fall. We know that there were 22 more homes available this July compared to LY so the theory that there are fewer homes available for buyers doesn’t apply here. In fact, if we project the current trend to the rest of the year we might see fewer homes sold in 2018 versus LY numbers for the first time in nine years. ^ I don’t see that this information should give us a reason to panic that another recession is on the horizon. I believe with mortgage interest rates still at historically low numbers, it’s still a great time to be a home owner. With the average home sales price up 18% since 2018, some buyers just decided to pull themselves out of the market. Whenever buyers take themselves out of the market we see a pull-back to the housing market which some people call a “correction”. We will continue to monitor the market over the next few months to see where it takes us.
Contact Hector Hernandez for more information including a micro analysis of your situation.
*Based on information from the Pikes Peak REALTOR® Services Corp. ("RSC"), for the period 7/1/2018 through 7/31/2018. “RSC does not guarantee or is in any way responsible for its accuracy. Data maintained by RSC may not reflect all real estate activity in the market.”
**Single Family/Patio Homes
^ Aside from a one year down 2010 vs 2009, the trend has been positive since 2011 after a downward trend from 2006 through 2008.