Average Home Prices in the Area Keep Falling
Area home prices fell in November for the fourth straight month, as the supply of houses on the market increased, sales declined and buyers took more time before making purchases.
The market’s softness last month shows Colorado Springs continues to feel the effects of a housing slump that’s been blamed, in part, on mortgage and foreclosure problems nationwide, in which too many loans were made to high-risk borrowers.
The median price for single-family homes in November fell to $207,500, a 3.5 percent decline from the same month last year, according to figures released this week by the Pikes Peak Association of Realtors. The median is the midpoint of all prices, with half of the homes sold last month going for more than $207,500 and the other half selling for less.
Average prices, which can be skewed by a few very high or low sales, dropped 3.9 percent in November to $252,074.
There was a positive sign for sellers. Nearly nine out of 10 houses that sold in November were existing homes, and last month’s median price for resales increased 1.1 percent to $199,850 when compared with the same month last year.
The median price for all homes sold in November probably was dragged down by builders who offered discounts to get homes off their books, some real estate agents said.
“Existing homeowners have a choice as to whether they sell and what they sell at,” said Cherri Fischer, of McGinnis/GMAC Real Estate in Colorado Springs and a Realtors Association board member. “Many times, for business purposes, (builders) get to a point where they may not have a choice. So, there are a lot of promotions, a lot of reductions from the builders in the area. Typically, in December and November, they’re trying to clear out their inventory and they’re aggressive on prices.”
Stuart Scott, of Stuart Scott Ltd. and a veteran real estate agent, said that for the last decade or so, builders have had comfortable profit margins, and that many now have the flexibility to lower prices in a way home sellers can’t.
“They have inventory that they need to move, and they are more likely to be giving concessions than the guys who are out in the marketplace,” Scott said.
In the Colorado Springs area, economists and real estate agents have said rising numbers of foreclosures have swelled the inventory of homes for sale and driven down prices. Through November, El Paso County recorded more than 3,100 foreclosures, the highest total in 20 years.
The supply of homes for sale totaled 5,967 in November, a 10.5 percent increase over the same month last year. Monthly home listings, however, have fallen from more than 7,000 during the summer, according to the Realtors Association.
The association’s report also said:
- Home sales totaled 667 last month, a 17.7 percent decrease from a year ago.
- Homes that sold in November averaged 96 days on the market, an increase from 83 a year ago and up from 63 in November 2005.
- Prices varied across the area. In Monument, Palmer Lake and Woodmoor north of Colorado Springs, the median home price in November fell 6.3 percent to $404,000, although average days on the market dropped to 98 from 115. On the Springs’ northeast side, prices increased 5.1 percent to $210,000, while days on the market also increased to 79 from 69.
Some real estate agents say there’s reason for optimism about the housing market. The resale market’s large supply and low mortgage rates - an average of 6.1 percent nationally last week for a 30-year, fixed-rate loan - make it a good time to buy, said Joyce Heffner-Williams, owner of Keller Williams Clients’ Choice and a Realtors Association board member.
“Historically, the people who have money and know what they’re doing, this is the time they buy,” Heffner-Williams said. “This is not the time not to buy. This is where they make money. Buy low and sell high.”
But sellers must turn their homes into showcases if they want to compete, she added.
By Rich Laden
December 4, 2007
GAZETTE COLUMN
Stuart Scott is President of Stuart Scott Ltd, a Colorado Springs residential real estate company. He has been a licensed Colorado Realtor for 33 years.
Sheila Morris
Stuart Scott Ltd.
726 South Tejon Street
Colorado Springs, CO 80903
Office: 719.578.8801 x116
Fax: 719.578.8808
Cell: 719.290.0770
www.SheilaMorrisHomes.com
