Summertime means a surge of real estate activity, which comes as no surprise to Colorado Springs real estate agents.
They know it’s home-buying season.
“We’re in a challenging market right now because of the recession,” said Joe Clement, broker owner of Remax Properties in Colorado Springs.
“However, March through November is usually when it’s the busiest. Our most productive month for closings is August. And the reason is school.”
Clement said a lot of families start looking in the early spring, get a little more serious late in the spring and then start making offers in June and July so they will be able to close and get settled into their new homes before kids start school in late August.
There have always been some variations to that pattern, but the summer season has long been known as home buying season in the real estate world.
Bill Hurt, broker owner of ERA Shields Real Estate, said that his company has done a lot of work with corporate relocations, which usually happen at the beginning of the year in January and February and have tended to be quicker transactions. But, with the slow economy, those deals have become less common.
In the last year, the company has completed 66 percent of its business between April and September, with the second quarter of the year being the busiest.
“We’re kind of coming into the twilight of the season now,” Hurt said.
Still, if a Realtor is going to make any money for the year, he or she best be running like crazy this time of year, said Jack Gloriod, a broker at Prudential Rocky Mountain Realtors.
While this home buying season is once again busier than the rest of the year, there are a few differences, Gloriod said.
“The inventory,” he said. “There’s a lot less out there now than there ever has been.”
He said he suspects that just as rent prices have spiked in the face of low apartment vacancy rates, so too will home prices as fewer and fewer single family homes become available on the market.
He noted that there were only 4,713 homes on the market in May compared to 5,550 last year. That’s 15 percent fewer homes.
Gloriod credits the falling inventory to a drop in foreclosure numbers along with some of the same factors blamed for the tightening rental market, such as returning military troops.
“We have an expanding population and those people are going to need some place to live,” Gloriod said.
Clement also noted that inventory has fallen off dramatically, but said he believes the decline in the number of available houses is a natural reaction in the market and is probably a sensible one.
“It is down, but it’s still way more than we need,” he said.” I remember back 2004 and 2005, there were just 2,800 listings. Today it’s still at 4,800. Sure, it’s a lot less than the 6,000 or so we had at the peak in ‘06 and ‘07. But, for the amount of buyers out there, it’s too many.”
The Pikes Peak Association of Realtors has not released June data yet, but the number of new listings in May of 2011, 1,417, dropped more than 37 percent from May, 2007 when there were 2,258 new listings.
And while there are fewer listings, Hurt agreed that there are also fewer buyers.
“There are a lot of people on the sidelines, just waiting to see what happens,” he said. “Consumer confidence is a huge issue. A lot of uncertainty is driven by the jobs and unemployment statistics out there.”
Confidence and the lending market, Hurt said, are keeping potential buyers on the bench.
That’s one reason some homes still spend months on the market before they go under contract, that and a hunger among buyers for a steal.
“In most cases, it comes down to price,” Clement said. “It’s price and a lot of times people just don’t realize it until they’ve tried the market.”
There was a two-bedroom, two-bath home on the west side of Colorado Springs built in 2005 with a two-car garage and custom feel listed at $270,000 that spent 179 days on the market before it went under contract last month, Clement said. The home didn’t sell until the listing price dropped to $225,000.
“A lot of times we see these reductions because of the home buying season,” Clement said. “Clients want to sell before the snow flies.”
In most parts of Colorado Springs, the season doesn’t make a huge impact on the marketability of a home, Hurt said. But those located on the fringes of town, in Black Forest, up Highway 24 or near Monument, the weather can put a damper on showing a home.
While sales in the Pikes Peak region were down year over year for May, Clement said Remax saw a 15 increase.
He credits three marketing campaigns rolled out just in time for home buying season. The first is the company’s, “Live the Dream. Move Up” campaign, which features a photo of two goldfish jumping from a small bowl into a bigger one. The idea is that Realtors call clients they worked with years ago and let them know they could benefit from a move up right now in this down economy even if they lose money on their last place.
The company is also marketing to people who had their homes on the market for several months and didn’t sell before their listing contract was up.
On top of that, Remax offers real estate investment classes and has trained 160 of its 233 local real estate agents how to handle and negotiate short sales.
Marketing efforts at most real estate agents pick up during home buying season and sometimes it’s targeted, specific or seasonal marketing. In the end though, programs like the ones Remax implemented, are year-round effort.
“We like to sell houses 12 months out of the year,” Clement said. “We sell a lot more during the home buying season, but we like to sell them all year long.”