What an interesting bind… when I started in real estate in 1999, April through August was relocation season. That season is now January 15th through May 15th. School is not dismissing any earlier, we are not going to work in flying cars, but we do live in an age when massive amounts of information is processed with incredible speed and little to no context. I point this out because the last two years, and then again in the last 10 days, the real estate market has seen this conundrum: Buyers moving into Colorado Springs have heard (accurately) that they are moving into a low-inventory real estate market. True. The response: Buyers are giving themselves more time to find a house, so much time, that it is not uncommon for someone needing a May or June purchasing close to start looking and even offering on homes in January. Rather than meet this Buyer demand, Sellers are taking their time to put their house up for sale. Since it “is so easy to sell a house”, Sellers more and more are delaying their listing time, giving themselves a weekend or two to sell their house, at almost any price. Buyers: “I want to take 4-5 months to find a house”. Sellers: “Give me four to five days to sell my house.”
Correspondingly, the numbers of for-sale houses right now, is effectively the same value as it was on January 1st when inventory is supposed to be at it’s annual low point. Again, time machine of 20 years of real estate experience moment… when I started in real estate in 1999, appreciation happened between April and October. Now it happens January through May. The supply and demand “Crush” is at it’s greatest every year now in the Month of May. As thisMay ends, the data is in never-seen territory: in just El Paso and Teller Counties, there were 1468 sales last month, and the month ended with only 1453 homes for sale. The months of inventory selling-rate was less than 1.0 months, never before-seen around here. But in just the last two weeks, the number of homes on the market for sale has grown by 200 units. The reason? School is out. Consider: Buyers, panicked to find something in Colorado are starting their searches back in January. Sellers, so accustomed to easy-selling in low-inventory Colorado are coming on the market in what is practically the last 2-4 weeks of prime selling season. What this means is that the less than 1 month supply status is about to lengthen, and likely by the end of 3rd Quarter, that months of supply will be between 1.7 months and 2.2 months of supply. More important: this month of supply rate has hit it’s lowest measure, ever, and it almost certainly will not be this tight again for the next couple of years if it ever gets there again.
Last month, at the last moment, I was privileged to attend the Sotheby’s International Realty Global Networking Event in Vancouver, British Columbia. Brokers from 44 countries, 2500 agents, lots of leadership, lots of knowledge, lots of mindshare. What point again and again was getting rammed home to the attendees? How to operate in a “changing market”. It is the basis of foolishness to think the same rules that apply to everyone else, don’t apply to you, and I took to heart the fact that no other market in the US that I could find, was operating at the same sort of velocity as our own. Denver slowed 3rd and 4th quarters 2018 and never really picked up again. California brokers are refining their “how to ask for a price reduction skills”. Brokers on the East Coast were clamoring for resetting their mindset, getting into daily beneficial routines because the days of just showing up and collecting a commission are done. Colorado Springs is heavily reliant on relocating traffic. The booming buyer activity right now is largely driven by our relative affordability on the Front Range. Any drive on I-25 at 8 am on a Tuesday will tell you the back and forth between our burgs is also like it’s never been. Colorado Springs will continue to benefit from it’s proximity to Denver.
But the cool down is coming.