Colorado Springs Housing Market Update for August 2021 is here!
If you're trying to decide whether you should buy a house in Colorado Springs, you'll want to watch this video about the Colorado Springs Housing Market first. Are we in a housing bubble? With so many rumors about housing crashes and housing bubbles in 2021, you want to be well informed when making this big home buying decision. Homes for sale in Colorado Springs aren't cheap!
Average sales price in Colorado Springs
This is the second consecutive month that the Colorado Springs housing market did not go up in the average sales price, but it's only gone down by 0.4%. So your new monthly average is $499,278 The median price has not changed. It's still the same from the previous month and the previous month before that. I like referring to the median price because it is a little bit more realistic of what our middle price is going to be for your homes for sale in Colorado Springs.
Is it a good time to sell my house?
There is still a shortage on housing it is still a seller's market and it is still a great time to sell. I know there are a lot of rumors about housing bubbles and housing crashes, but the numbers don't lie! I always come to you with the actual statistics and numbers from our local MLS board.
Median sales price in Colorado Springs, condos/townhomes
As far as condos and townhouses go, that is actually increasing. People are starting to look to townhomes because you can get a pretty decent sized townhouse with 2,300 square feet, three bedrooms, three bath with a basement and attached garage. So, people are tending to go that route instead of getting a single family home.
That average sales price number has actually gone up. The median price is up to $325,000 for condos and townhomes in Colorado Springs compared to the previous month. The average price is $3387,722, which is up 24% in the average sales price from last year.
Housing crisis of 2008
So what's different this time around compared to 2008 when we did have a huge housing crash? Well, for one thing we do have stricter underwriting which has had a lot of buyers talking because it's been so strict and seemingly intrusive. The process has gotten a little bit tougher. You're needing a lot more documentation, underwriters are wanting banks to talk to your employers on the phone multiple times. They're wanting to verify everything before they give you the loan. They're questioning everything, even a $70 IRS payoff. They just want to make sure that when they fund the loan for your new home that you're going to be able to pay it.
Lending and mortgages then vs now
Many buyers are frustrated about how stricter things have gotten but in actuality, it's going to be a great thing for the future. Now we don't have all these loans like arms making it harder for people to pay their mortgages later. Banks learned from the last time around they don't want to do that again. So, there's a lot more scrutiny when it comes to the underwriting process.
Get preapproved and underwritten early
Nowadays you can get your underwriting done up front instead of at the end so you'll know through underwriting whether you're going to be able to qualify for that house now and not wait until right before closing only to find out that you no longer qualify for the house. If want more information about that please email me. I will show you who you can use to make sure that you are underwritten earlier in the process and not towards the end.
Forbearance through CARES Act
The other thing that is a little bit different from 2008 is the forbearance option the government through the Cares Act has provided. It was a for homeowners to hold on to their mortgages and not go into foreclosure and go into forbearance on their mortgage loans instead. Back in 2008 there were about 9.3 billion people who could not pay their mortgages whereas this time around it's 1.8 billion. I'm not saying that that is a small number at all. That's definitely a huge number when you're talking in the billions. But it's much different than 9.3 billion.
And now, people are beginning to trickle out of forbearance. When the pandemic first hit it, there was a high number of homeowners that were not able to pay their mortgages, but they were in forbearance. Now that number is continuously getting smaller and smaller and now down to 3.5% as people are coming out of forbearance at different times.
New construction homes
The next thing is that prior to 2008, there was this huge demand for homes and so new construction companies and home builders started building new homes fast which resulted in excess inventory. This time around we've not had as many new builds and definitely nowhere near what it's been over the years. Homes have been undervalued for many years especially in Colorado Springs. When everyone started finding out about how amazing our city is, it just exploded and drove up the cost of housing significantly.
But, generally speaking, we're still under the NAR recommendation of no more than 25% of your income going towards your mortgage. It's still generally affordable and oftentimes cheaper than rent. You mix that with historically low interest rates (under three percent) and it's a great deal! Especially when you have all these home buyer programs where you don't need money down. You can get away with not having to pay private mortgage insurance. You're getting all this assistance with no fees, lower rates; it's almost a no-brainer to buy and start building equity over time. It's a great investment if you can find a good deal on a good house. There is a high demand so anytime there's a high demand for a product then the price tends to go up so that we can slow down the sales or at least we hope to slow down sales just a little bit.
Qualify of life
The last contributing factor to the spike in home prices is the fact that we can work remotely. If you don't have to travel or be in a certain city and you can work from home, you can move to a city like ours. Our quality of life is nice here. We've got a lot of nature which is good for you. Nature makes you feel better. We have over 300 days of sunshine typically throughout the year. The snow is beautiful. People can still keep their jobs and work remotely but live in a another city where there's not as much traffic, not as much smog or busyness going on. People are wanting to slow down and live just a simpler life lately.
Preparing for a housing bubble
My final thought is this. SAVE YOUR MONEY. Invest well. Protect yourself against any foreseeable or potential housing crashes or bubbles. Revisit your insurance rates. Make sure your deductible is reasonable. Revisit your budget. What things are unnecessary and can be cut out? If you're overpaying for homeowners insurance or car insurance, shop around to make sure that you're getting the best rates and then use that money to either save or invest for a rainy day because you never know what's going to happen!
Feel free to reach out to your local real estate agent!
RE/MAX® INTEGRITY Colorado Springs, CO REALTOR®