Local home sales, prices tumble in June

Last month was another downer for the Colorado Springs-area housing market.

New and existing single-family home sales totaled 872 in June, a 4.5 percent decline from the same month last year, according to a report released this week by the Pikes Peak Association of Realtors. Year-over-year home sales now have dropped in 10 of the past 12 months.

Existing homes make up the bulk of houses sold in any given month; they totaled 800 in June, down 6.9 percent from last year, according to Realtors Association figures.

The figures reflect home sales whose transactions were handled by association members, and not homes sold by individual owners. Most sales took place in El Paso and Teller counties.

Prices, meanwhile, also tumbled. The median price of homes sold last month was $185,000, a 9.8 percent drop from June of last year. It was the steepest year-over-year percentage decline since July 2009, when prices fell 10.8 percent

The median is the mid-point of all sale prices; in June, half of all homes sold went for more than $185,000 and the other half went for less.

Of existing homes sold in June, the median sales price was $175,450, a 12.3 percent decline from a year earlier.

The inventory of homes listed for sale totaled 4,761 last month, a 19.5 percent year-over-year decline. In this case, falling inventory is a good thing; fewer homes on the market hold the promise of less competition for sellers.

Despite June’s downturn in sales and prices, Colorado Springs economist Fred Crowley said he sees some reasons for optimism. This year’s first-half sales are being compared against the same period last year, when the federal government’s income-tax credit for first-time and move-up buyers had buoyed the market.

“This is encouraging because if you adjust for the impact of the first-time homebuyer tax credit that was in place last year, sales actually are up,” said Crowley, a senior economist for the Southern Colorado Economic Forum at the University of Colorado at Colorado Springs. “The housing market is showing improvement on many fronts, though that has yet to show up in these numbers.

“With today’s low mortgage rates,” he added, “people should be buying homes. You will save more money over the life of the loan than you would have received with the tax credit if you had bought a home last year.”

The housing market in the Pikes Peak region, like most metro areas around the country, has suffered as a result of the nationwide economic downturn since late 2007. Layoffs and employees fearful about losing their jobs have meant fewer home sales, which, in turn, means lower prices.

Compounding the housing market’s problems: A tidal wave of foreclosures.

Not only have unemployed homeowners lost their properties, but other homeowners who purchased their houses using interest-only and other so-called exotic mortgages defaulted on their loans because of soaring interest rates and monthly payments.

In Colorado Springs and El Paso County, more than 20,000 properties — most of them single-family homes — have fallen into foreclosure since 2007, according to the El Paso County Public Trustee’s Office. Lenders who take back those homes often put them back on the market at a discount, providing stiff competition for home sellers and driving down prices.

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