Despite improvements in the housing figures in Colorado Springs over the last several months, there is no doubt that the action is on the affordable end. 50% of Jul 2009 sales were under $199,500, but almost 69% were under $250,000. 82.9% percent were below the FHA loan limit of $325,000, and the 90th percentile (90% below) was only $387,500.
Factors going into this are:
1. The First Time Home Buyer Tax Credit is most effective up to about $228,000, and drops off benefit-wise after that. This credit is also driving many first timers into the market, many of whom are both income and down payment constrained into more affordable homes.
2. The rental rate of housing tends to fall as prices go up, and in these difficult times is an important component for buyers deciding on value
3. The job market here is not as good for higher paying jobs right now, leading to an imbalance of supply and demand in the higher price ranges.
4. The jumbo mortgage limit and VA loan limit of $417,000 is restricting sales a bit above that amount.
5. Many of the foreclosures and short sales tend to be in the lower price ranges, and while these are falling as a percentage of the market, it is still close to 20% of sales.
What this means is that we have some exceptional values out there for buyers in the higher price ranges!
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© 2009, Rick Van Wieren Real Estate, Inc. All Rights Reserved. On republishing this post you must provide link to original post.