What's Going on with the Colorado Springs Real Estate Market?!

the Colorado Springs real estate market is honestly in a really strange spot right now and really wanted to take some time to go over what's going on so that you can stay in the know and really be as informed as possible if you're thinking about either moving to Colorado Springs or if you own a house in Colorado Springs and are thinking of selling or just want to stay as informed as possible [Music] if you're new here my name is Ben and in this channel we make videos about what it's like to live and move to Colorado Springs also we are a team of Realtors as you may assume based off this video so if you are getting some value out of this video we'd love to earn your business go ahead and give us a call or text and once you reach out we can go ahead and then set up like a phone call or a zoom call so we can kind of go over our process and see how we can best help also before just diving in kind of want a preface I'm no like Economist and this video is not really meant to predict like where the real estate market is going to be headed necessarily but more wanted to just give you some updates and some snapshots as to where we're at so you can plan accordingly and this is purely based on what I am seeing and kind of how I'm processing it and just really given my experience working with clients so jumping straight in want to just give you some general metrics as to where we're at price-wise and as of July of 2024 this year year we are actually at a median house value of around 500,000 so if you look compared to about a year ago we are up about 5.5 5.7% so back a year ago median kind of price was more like 472 475 which is honestly crazy to me considering a couple different things right so one rates rates are still high and yes historically maybe these aren't the highest rates ever they're much higher than they used to be just a couple of years ago that being said rates right now compared to a year ago are actually just a little bit lower so overall interest rates have kind of stayed about the same um within this last year but overall they're still going to be much higher as you probably already know so what do these rates actually look like in terms of actual cost so if you take that median kind of house value of 500,000 and say you put 20% down after you know Insurance property taxes and everything at the current rates you're still looking at a price of just under $3,000 a month for a mortgage payment but that being said if you are a say a first-time home buyer and you're only putting 3% down this gets even steeper because then you have to pay private mortgage insurance meaning all in all a $500,000 house at 3% down that's going to be just under like $3,800 a month given the current market State and you may be thinking yeah but that's for a $500,000 house I'm not considering purchasing at the kind of median house value so say for example you're looking to purchase a $400,000 house General numbers on that at 3% down with private mortgage insurance insurance property taxes all that sort of stuff you're looking at a payment of just over $3,000 a month and I say all this just to really emphasize it's crazy to me that within the last year prices are still going up or have gone up 5% considering the amount that buyers are having to spend on monthly payments now I think specifically with Colorado these median kind of values are a little bit thrown off just because the average house size here with so many families living here is a little bit bigger than places up like in Denver where you can buy theoretically like in Castle Rock or in Denver a $500,000 pretty decent house and places like up north in monum for example you may not see like almost any listings for $500,000 and that's not necessarily because places like Castle Rock or parts of Denver are cheaper but it's purely for the fact that places up north we just don't have any houses that are smaller that would be in that price point because of the size so do know that this kind of median price does throw kind of a kink in the way that you're looking at things there are some houses that are smaller that could be closer to this kind of maybe $400,000 price point but in general this median price I think is just thrown off with the distribution of houses being a lot more so on the bigger side of things it's also crazy to me that prices have gone up within the last year because inventory is actually at an alltime 10year high so we are back to the levels of inventory that we were at in around 2015 so we're currently sitting at around 3,200 properties on the market and that's a 45 5% year-over-year increase compared to last year so if you look at this chart showing the new listings that were added to the market compared to the houses that were sold you can see that the new listings are outpacing the listing sold meaning the inventory is accumulating a little bit here and I say that again just to really drive home the fact that to me it's a little crazy that prices haven't you would maybe think dropped a little bit but I I think really this is just because you still don't have enough inventory to make up toward the demand supply and demand and you'd see a lot more listings if if people weren't so locked into their current rate you know a lot of people especially within the last couple of years have had a two three maybe a 4% interest rate and that's helped people kind of stay in a spot financially where they can afford that payment and so if they do move to another property say they sell their house and move to another one they're they're going to have a much higher overall monthly mortgage payment and their house is probably not going to be quite as nice meaning I think a lot of people are still just sitting in their current property kind of waiting for things to change and see what is potentially going to happen and because of that you don't see this even larger supply of listings coming to the market now that being said I think Colorado swings is just slightly unique because there's a large military population and from what I've seen some times it's maybe not an ideal situation where people are getting up and leaving because they're being stationed somewhere different and because of that they just have to sell their house regardless whether they're going to pay more or not in this new place that they're moving to so I do think that colado Springs is a little different in terms of the overall population that is kind of locked into their mortgage but I think because this Supply hasn't drastically outweigh demand we're kind of just staying at this weird in between state where it's not about buyers market and it's not a sellers market and I think with a lot of people staying where they're at it would change if rates dropped drastically you know people would feel more comfortable moving to other places and the inventory would increase but subsequently demand would also increase meaning I don't think that would necessarily change a whole lot but again I'm not an economist not trying to necessarily predict where we're going to be at but it does mean currently we are technically in a little bit more of like a super soft buyer market and that really does feel very listing dependent meaning in my personal experience some of the listings we've had in popular areas that are more moving ready you know they're going under contract the day that they're hitting the market with multiple offers and then you have other properties that are just sitting on the market waiting and begging people to put in offers so I think this is partly because buyers nowadays are being a little bit more thoughtful and can't necessarily just rush to put in an offer with a low interest rate they're having to be a little bit more thoughtful and they and they know that if they lock into this house they're probably going to be at a higher monthly mortgage payment to maybe what they're used to again just meaning that people are being maybe a little bit more thoughtful as to what houses they are selecting and because of this I think some of the nicer more mve and ready houses which already tend to go faster than non- moveing ready houses are seeing a higher surge of demand so now you probably feel a little bit sad about the current state of the expensive housing market let's go over some practical things that can make owning a house a little less expensive so the first thing you can do is get seller concessions to have the rate bought down so this meaning say you find a property has been sitting for a while that you can leverage the fact that it's been sitting for a while and then put in the offer that you want the seller to give you some credits to then pay your lender to buy down your rate so typically lenders will allow you to buy your rate down by about 1% maximum and this can help just with your overall monthly payment um to afford that higher monthly payment so if you are in a situation where you want your kind of monthly payment to be something sustainable for you but you also don't want to live in a $200,000 property here in Colorado Springs then this could definitely be a helpful option and there are some other like rate buy down options um but not a lender don't necessarily want to go into the specifics of those um if you're interested I can get you connected with my lender and they can kind of go over what those would look like the other thing I really don't see a lot of Realtors talking about is assumable mortgages so assumable mortgage is essentially where you take over the mortgage of the pre-existing owner and this is only allowed if the current owner had a VA an FHA or a USDA loan and because Colorado Springs is a big military Hub you have a lot of people purchasing houses with VA loans meaning if you're a little bit less picky with the house you do have quite a few options here now the only caveat being say that the seller purchased the house for $100,000 keep it simple for this example and now they are listing at the value of $120 if you assume their mortgage of $100,000 you'd still have to pay that $20,000 difference so that makes it a little bit hard for for first-time home buyers to cover kind of that larger Gap in cash however this is like the ideal situation if you sold a house and are looking to purchase a house here and have the proceeds from the sale of your property and I think this isn't talked about as much a just because there aren't still a ton of these listings and B it takes sometimes four to 6 months for this whole process to kind of be finished so it can take just longer in general and I think a lot of times other Realtors just don't want to push this for for own selfish gain but I think it really can be a good option if you're patient or you want to work something really creative where you actually assume the mortgage but then you agree with the seller to move in prior to close something like that could be a good workaround okay so another option you have is house hacking so this is essentially where you have another unit within your house or your duplex where you can then have the payment of that kind of mitigate the higher prices of of houses right now and obviously this is not a ideal situation for like maybe a family who wants their own private living space but if you are maybe someone who's flexible with living near other people or you're used to maybe living in like a townhouse this is a unique option specifically here in Colorado Springs because unlike a lot of places where there are no basement here in Colorado Springs we have a lot of actually houses with walk out basements meaning if you add a kitchen and have a walk out basement you can essentially have two units within a singular house rent out the other half and kind of cover what you're paying for the house in general so this is a really good option again for I think people who are flexible uh but it is an option and then lastly you do have new construction so the perk of new construction is a lot of times Builders will have incentives where they'll give you say $155,000 to purchase a $400,000 house where you can take that $15,000 and either have it cover something like closing costs or you can have it cover and buy down the rate to something as low as like 5% I've seen so again this can really help with your just monthly payment if that is something that's specifically matters to you so hopefully this video kind of gives you a sense of where we're at right now and some things you can do to potentially kind of mitigate for the fact that it's just really expensive to get into the market right now as always if you made it this far in the video go ahead and subscribe and like the video so YouTube can kind of suggest this video to other people and if you are thinking about moving here and you need any help give us a call or text honestly we'd love to hear from you