Has the Real Estate Market Hit Bottom?

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Everyone wants to know! Home buyers want to know so that they can buy their home at the lowest possible price. Home sellers want to know so that they can time the listing of their home with an increase in price. Has the market hit bottom?

Yes, it did. As prophesied by national real estate instructor, David Knox, we have discovered the bottom of the market, after it passed; after the market began it's upward trend. So, don't wait for the market to hit bottom in Colorado Springs, Colorado. It already bottomed.

The Pikes Peak Association of REALTORS reports that July sales were up 21.9% from July, last year, and the median price was up 6.6%. These are very strong numbers. The inventory of unsold homes continues to be very low, down 18.8% and less than a 4 month supply at the July sales rate. Last year this time, we had a 6-month supply of homes to sell. Building permits are up 39.9%, as more buyers choose new construction to compensate for fewer homes on the market.

Buyers are also motivated toward new homes because Builders saw the handwriting on the wall and reacted proactively to the economy's changes. A number of builders are scrambling to offer large reductions in pricing, new upscale stainless steel appliance packages, gourmet kitchens, and free finished basements. With the drain on buyer's savings accounts, they often are short in the funds required for closing. Builders have acknowledge that and often pay most or all of the buyer's loan closing costs.

The efforts of builders are paying off in spades. One large local builder exceeded their first quarter goals by the second week in February. One patio home neighborhood constructed by this builder has surpassed the target for closed sales in that community for the entire year by 33%! Another mid-level builder has closed over 50 homes since January 1st in one community here in the Springs. Their yearly average for the entire company in multiple neighborhoods has been less than 100 homes each year in the last three years.

The percentage of homes disclosed as distressed was 13.1%, or 128 homes. This compares with 17.4% of sales in July of 2011, a significant improvement.

Colorado Springs home buyers are continuing to take advantage of low interest rates, which have been consistently in the mid 3′s. Low long term mortgage rates and higher rent prices are making the decision to buy rather than rent MUCH more attractive at this time.

Would you like to know what your home is worth in today's economy? Would you like to have a free market analysis of your home's value? Now is the time to get ready to cash in your chips, before the rates climb again. With all-time lows of mid-to-low 3's in the loan rates, we have an unprecedented opportunity to take a short cut to value. Historically, interest rates remain low before the Presidential election. The Spring following the Presidential election typically heralds an increase in mortgage interest rates as the president scrambles to reduce the Federal deficit by relaxing the artificially lowered rates. If you are thinking about buying a home, let's talk about your ideas so that I can coach you to the best possible opportunity. Call me soon to have that chat.

“Based on information from the Pikes Peak REALTOR Services Corp. (“RSC”), for the period 1/1/05 through 7/31/12 . 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.” Copyright © 2012 REALTOR® Services Corp. Questions about this analysis should be directed to John Wayne Holdren, CRS, RE/MAX Properties, Inc, 1740 Chapel Hills Dr, Colorado Springs, CO 80920 Phone: 719-347-1010