Housing Guide / Market Values in Colorado Springs (for sale by owner, how much)

[Bob from down south]

April RE sales stats are out for the Pikes Peak Region. The Spring selling season continues to be a bust, with existing home sales down 12.4% compared to this month last year, and median prices down 3.5% in the last month ($202,000 down to $195,000 from Mar 08 to Apr 08)

There continue to be ~2.5 new listings for every one that sells, and total active existing home listings in the PP region MLS was up 2.8% from a year ago with 5,453 single family homes now listed.

Cumulative year-to-date existing home sales are down 15.7% when compared to the same four-month period in 2007.

Some analysis I have done on the sales in various price segments shows sales are extremely sluggish in the $350K and over market, and that may explain some of the drop in median price as lower priced homes moved in larger numbers than mid-to-high priced properties. It also suggests that the financing is just not there in the pricier segments as credit standards are now tightening significantly.

With notices of default spiking up dramatically over the last six months, prices are going to see markedly more downward pressure as the wave of subprime-related foreclosure sales and REO inventory really starts hitting the market in mid to late summer in larger numbers and with even fewer buyers remaining as a result of normal seasonality.

[multitrak]

cos real market doesn't sound all that bad to me! yoy is down only a trival 3.5% (compared to denver down 5.5%). the 08 buying season hasn't even geared up yet with the kids still in school, so i would expect inventory to be highest during the selling season...the next 3-4 months will tell the tale. and as i had suspected, the low end market is the place to get the sweetest deals since it was once the most overvalued in 2005 and now it is the most undervalued. mid and high end owners who have the deepest pockets will fair the best in this cycle.

[Bob from down south]

Originally Posted by multitrak

cos real market doesn't sound all that bad to me! yoy is down only a trival 3.5% (compared to denver down 5.5%). the 08 buying season hasn't even geared up yet with the kids still in school, so i would expect inventory to be highest during the selling season...the next 3-4 months will tell the tale. and as i had suspected, the low end market is the place to get the sweetest deals since it was once the most overvalued in 2005 and now it is the most undervalued. mid and high end owners who have the deepest pockets will fair the best in this cycle.

Historically, the peak buying season in Colorado Springs is March-April. In a typical year more than half of the year's contracts are written in these two months alone. So the 08 season has already geared up and should be tapering its way back down in the coming months.

The lower end is moving better than higher end, but it's not moving well at all. I believe it has much more to do with loss of borrower "reach" owing to tighter lending standards. There's little 0 down 60% DTI lunacy going on like before, so the kamikaze buyers that previously could only qualify by walking a financial gangplank can no longer qualify for big enough mortgages to afford the higher end stuff. Many of the sellers in those higher price ranges never could afford those houses, either. Now they're stuck trying to sell after most of the buyers that look like them have been pushed into lower price segments.

[jazzlover]

Originally Posted by Bob from down south

Now they're stuck trying to sell after most of the buyers that look like them have been pushed into lower price segments.

Having watched the Colorado real estate markets for about 35 years now, one of things that shouldn't be discounted is the "greater fool theory." It has propped up the Colorado real estate market for a long time. It goes like this: There are always people from somewhere else--Texas, California, etc., etc.--who just HAVE to live the "Colorado dream." Unfortunately, a good number of them are willing to commit financial suicide to do it. So, they pay more for property than they can probably support with their hoped-for incomes. After some period of time, maybe a few years, they get into enough financial distress that they have to sell out. But, there is usually a greater fool who will come along with the same--possibly irrational--dream; the property sells, and the whole cycle starts again at a higher price level.

The few times that I've seen that cycle break is when the economy crashes badly enough that even the greater fools can't get financing for their dream. Then the last chumps in the chain letter of the "bubble" get stuck with a nearly completely unsellable property, and property values crash back to something approaching reasonable levels. That happened in the early 1980's in Colorado, and my opinion is that it is happening again now. Whomever has gotten or gets on this rickety bus last is probably going to "enjoy" one hell of a wreck when the bubble really bursts. The big difference this time is that the difficulties are likely to be much deeper and last much longer than anytime since the Great Depression. This won't be a "blip."

[Jubi]

Originally Posted by jazzlover

There are always people from somewhere else--Texas, California, etc., etc.--who just HAVE to live the "Colorado dream." Unfortunately, a good number of them are willing to commit financial suicide to do it.

People seem to do that anytime they go from a low cost market to a higher cost market just because they can get approved for the loan. Getting approved for a loan doesn't necessarily mean you should take it. I'm amazed that I would get approved for a 250K loan with this current market being a single person with a not exactly large paying salary. I certainly wouldn't take that on! I wouldn't feel comfortable doing it. FYI, I started this thread ages ago. I changed my screen name after I got divorced and became more interested in townhouses rather than single family homes. Of course the market isn't going up anymore! If anything, things are going down to try and correct all the increases that happened before I started this thread.

[CTMO]

My family and I live in Fairfax, VA now so everything in COS looks like a good price. We have been looking at housing prices but we will be renting when we first arrive. I figure in another year or so we can think about buying when we are fully adjusted to COS and know what we are getting into. From what I have read the housing market wont be rising again for a while so we should be set!

[Bideshi]

Originally Posted by jazzlover

there is usually a greater fool who will come along with the same--possibly irrational--dream; the property sells, and the whole cycle starts again at a higher price level.

I believe it is the case now that the "greater fools" wiil not be able to afford or get credit for their foolishness, (as you suggested in your reply). I don't even see how the government can afford to bail out trillions of dollars of foolishness. I think a hard rain's gonna fall. The crooks who set up this pyramid scheme have already cashed out and are resting in Aruba.

[Bideshi]

Originally Posted by CTMO

From what I have read the housing market wont be rising again for a while so we should be set!

Historicaly it may be decades. Demographics (shrinking, ageing population) suggest not in our lifetime. Illegals will not be buying McMansions.

[Bob from down south]

El Paso County foreclosures up 47% from Q1 2007, headed for 5,000 for the year.

Top Stories: Report shows jump in '08 foreclosure filings | foreclosure, county, first : Gazette.com

That's better than Douglas County, just to the north, up 78% from the same quarter last year.

Right now just under half of the intial NODs in El Paso County go all the way to a foreclosure auction, and nearly all of the auctions are resulting in the house going back to the bank.

That means a REO (bank-owned) wave coming our way in the back half of 2008 and early 2009 that's nearly half the size of the entire inventory currently listed in the Pikes Peak Region MLS.

Somehow I find that second-half turnaround the realtor mouthpieces keep talking about rather doubtful. More like second half of 2013, based on what's coming even later still with the pay option ARM and Alt-A tsunami.

All good things to those who wait...

[Chris08]

I am on the same page as Shep and CSColorado. Its a great time to buy. This is actually the 2nd best Buyers market in Springs history. The 1st was in 88'. Every 12-15 years buyers have a small window of opportunity to buy low. Between 18-24 months. Dont believe everything you read either. Go to a professional that knows the market and knows what is happening first hand!