There a seasonality to the Colorado Springs real estate market. Our Spring / Summer season tends to be when we see the most closings (in part because is Spring is when many of them go under contract and is the ‘relocation season’). Winter tends to be our slowest season.
There is a short period at the end of summer, generally between the back to school time and Labor Day, when things get kind of quiet. I’ve never completely figured it out, but it seems like this period comes every year, so I decided to give it a name – The Late Summer Lull. Maybe it is because people are distracted with back to school activities, or ‘last hurrah’ vacations before summer ends. Maybe it is because they are taking their college kids to school. But generally, after Labor Day, activity picks up for a bit.
This year of course, there may be some additional factors. With sales down almost 25% in July, we may still be experiencing a ‘hangover’ of sorts from the expiration of the tax credits. There also seems to be dwindled pool of qualified, motivated buyers. There are several reasons the buyer pools seems a little shrunken at the moment.
- Credit damage. Some people have really been credit damaged as a result of losing jobs or health problems or whatever earlier on in the recession. They may now be working and making progress, but the credit building process takes time.
- Liquidity. Some people have equity (or cash flow) tied up in other properties, and until those sell, are no going to be able to move.
- Jobs. Unemployment in Colorado Springs stands at 8.9% at the moment, and nationally at 9.5%. It takes a job (or documentable income) to sustain a mortgage.
The ‘Late Summer Lull’ does not typically last very long. With interest rates at 4.25%, it’s a wonder it exists at all this year!