Local home sales decline in July; first drop in more than a year
Local home sales tumbled last month for the first time in more than a year.
The drop is probably because of the April 30 end of the federal government’s income tax credit for homebuyers, one real estate agent said.
Sales of newly built and existing homes totaled 713 in July in Colorado Springs and surrounding areas, a 24.6 percent drop from the same month last year, according to a report Wednesday by the Pikes Peak Association of Realtors that tracks sales handled by its members. It was the first year-over-year decline in home sales since May 2009.
Existing home sales, which make up the bulk of transactions, totaled 669 last month, down 26.3 percent from July 2009.
“I certainly noticed a drop-off (after the end of the tax credit), and I talked to a lot of the other brokers who were of the same opinion that it was a very motivating factor for people coming in and buying a home,” said Doug Barber, owner of the Rawhide Group.
The incentive program provided $8,000 tax credits for first-time buyers, and $6,500 for move-ups. The program remains in effect until next spring for active-duty members of the military.
Many people still want to buy, and interest rates that averaged 4.49 percent last week for a 30-year, fixed-rate mortgage can save buyers thousands of dollars over the life of a loan. Yet, it’s tough for some borrowers to qualify in a new era of tougher lending requirements by banks.
Also, some potential buyers remain skittish about their jobs, Barber said.
“People are nervous about the economy and money,” he said. “It’s tough out there.”
Another troubling sign: The supply of homes listed for sale in July swelled to 5,955, up 16 percent from the same month last year and the highest total since 6,030 in September 2008. More listings mean more competition for sellers.
Even as sales fell, the median price of new and existing homes sold in July climbed 5.1 percent to $209,900 when compared with the same month last year. Year-over-year prices have risen for nine straight months; July’s figure was the highest since $223,950 in July 2008.
Meanwhile, a National Association of Realtors report Wednesday showed that Springs’ prices increased to $196,800 in the second quarter, up 4.1 percent from the same period last year.
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YOU CAN’T ALWAYS GET WHAT YOU WANT
Thirty percent of Colorado Springs homeowners who sold homes in the last year had to lower their asking price at least once, according to a report Wednesday by Trulia.com, an online real estate service. The average reduction was 7 percent; the Springs ranked 24th among the nation’s top 50 metro areas in terms of percentage of homeowners that had to cut prices. Denver ranked 45th with prices being reduced on 21 percent of homes for sale. Minneapolis topped the list with 42 percent of sellers lowering their asking price. The report covered the 12-month period ending Aug. 1.
--The Gazette
