COLORADO SPRINGS“The statistics do not tell the entire story. We may show only a 1.1% drop in the median sales price for all properties, and a slight uptick in active properties, but the real
HALF the Story
Dated: June 15 2024
Views: 592
“We exit another month with numbers that do not tell the entire story. But I am going to fill in the gap, and I think it is going to lay out a different story - one that is not being told. We should be discussing it because I believe it’s beginning to show signs of a rollover on housing. First, we will discuss the statistics in the Pikes Peak region that will begin our story of change. Once again, we were down year over year on sold properties by 7.6%. The shocker for May was seeing an increase of almost 40% in active listings year over year, but then also seeing a 3.3% increase in prices. You may ask yourself; how do prices remain higher when inventory and sold properties continue to drop? I may have the answer. And for buyers in the sidelines, we may be seeing a roll over in housing.
“A year ago, agents would argue that we need more inventory and buyers would come back to the market. We are not seeing that play out and once again, the truth is the cost of housing is too high - at least in the median price points. My good friend and fellow REALTOR® ran some statistics for me to share with you that will show why home prices do not appear to be falling. In May of 2023 in the $500k and under category, we had 56 homes withdrawn/cancelled (pulled from market). In May of 2024, that number rocketed up to 105. From $501k-900k the May 2023 numbers showed 23 withdrawn, and then 82 for 2024. The surprising statistic is from $901k+; we had 21 in May of 2023 but in May of 2024 that dropped to 15. We are witnessing an increase of properties below $500k that cannot sell, and yet the higher end is selling with a drop in withdrawn/cancelled properties year over year. This shows we are grading housing values on a bell curve. It should be noted that we are witnessing this firsthand with our property management department. Many homes we are signing up to become rentals had previously attempted to sell but were not successful due to being upside down on values. The Gazette Telegraph, our local paper, reported that apartment rents were on the decline. Between an increase in rentals coming on the market because they could not sell, and apartment rents dropping, we are seeing a softening in the rental market that we have not seen in the last 10 years.
“The Kobeissi Letter on X reported that 6.4% of home sellers cut their asking price in the last 4 weeks. This is the most in 18 months and the 2nd highest since 2021. In June of 2023, it was 4.4% and in 2022 only 3.9%. US pending home sales have declined to their lowest level since 2020. Are home prices really increasing, or are we just selling the higher end homes while the median-priced homes are not selling and not being counted? Locally, it appears the latter is the case. It should be noted we are at the two-year mark for interest rate hikes. After two years of higher rates is when the economy usually begins to show signs of struggle. We are beginning to hear about this as retailers like Target and Kohls continue to warn that consumers are struggling. FDIC has openly admitted they are tracking over 60 banks with liquidity issues, which is probably half of the truth. And the government continues to revise past data that was once positive, to data that is now negative - anything from job numbers to GDP. Election years are an interesting time. Let’s watch as we go. But I can tell you that other cities that start to see a heavy increase in inventory begin to see values pushing down. Everyone is still waiting for the FED To pivot. Remember, a FED pivot is actually a sign of bad times coming. Strong economies don’t need low rates, weak ones do. Until next time, cheers,” said Colorado Springs-area REALTOR® Patrick Muldoon.
Patrick Muldoon
I have many interests and hobbies to supplement my busy career in real estate. Although I enjoy my work I also enjoy finding free time to enjoy the most important things in life. This includes being w....
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