Market Still Soft in Colorado Springs Region
Home sales declined last month around the Pikes Peak region, although real estate agents remain optimistic that housing activity will pick up as the spring approaches.
According to the Colorado Springs Gazette, sales of single-family homes fell nearly 11 percent in February compared with the same month a year ago.
As sales slid, the supply of homes on the market surged by a whopping 25 percent in February from 12 months ago, the Pikes Peak Association of Realtors reports.
Despite a larger supply and reduced demand, homes that did sell around the area fetched higher prices, reflecting that Colorado Springs mortgage demand hasn’t entirely fallen off the radar in the region; the median price for homes sold in February rose 4.9 percent to $214,950.
The numbers reflect home sales and listings handled by Realtors Association members mostly in El Paso and Teller counties and don’t include homes being marketed for sale by owner.
The Colorado Springs housing market enjoyed record sales in 2004 and 2005, but took a step backward in 2006 when sales declined and inventories rose.
Real estate industry members and economists have said the current market is a victim of past success. Low Colorado mortgage costs lured many people to buy homes in 2004 and 2005, but strong sales in those years have drained the pool of buyers in 2006 and so far into 2007.
All of which has led to a softer housing market.
Another problem last year: Speculative homes — those built before buyers actually purchase and occupy them — were constructed by area home builders and competed with the resale market right as demand waned.
But home builders have slowed construction of speculative homes, which should help cut inventories and make resales more attractive to buyers, said Wynne Palermo, owner of Wynne Realty Ltd. in Colorado Springs.
“It bodes well for the resale market,” she said.
At the same time, home mortgage rates remain at relatively lows; last week, they averaged 6.18 percent nationally for a 30-year, fixed-rate mortgage, according to government-backed mortgage giant Freddie Mac.
Combine low mortgage rates with an ample supply, and the intelligent buyers will have plenty of choices for quality homes, which should help boost area sales as the year goes on, said Ben Day, branch manager of ERA Shields Real Estate’s InterQuest office in Colorado Springs.
SOURCE: Colorado Springs Gazette