Colorado Springs Housing Analysis Based On School District
Welcome back to our tenth year of the Housing Analysis by School District. This is an analysis of homes sold in the three primary Colorado Springs School Districts, Academy School District 20, Colorado Springs District 11, and Falcon District 49. This analysis includes home values based on sold properties for the month of January.
The market statistics found on the Colorado Springs MLS (Multi-Listing Service) website and reported by the media is an average for all single-family homes, townhomes, and condos in the City of Colorado Springs. The housing market in each area and even subarea can be significantly different from the City average. Since we market to buyers in Academy School District 20, we felt that a comparison between Academy School District 20 and the adjacent school districts, of approximately the same size, would help the reader/buyer see the value in purchasing a home in the award-winning Academy School District 20.
For those selling in Academy School District 20, this information is just as valuable to you to determine how the market has faired over the past several years and how it may affect the sales price of your home.
The following analysis is based on homes sold in the month of January between 2005 and 2018. Why January? Technically, the analysis could be for any month, but we started the data collection the first year, right after the January housing statistics became available, so it made sense to use January. Yes, a summer month, during peak buying season, would probably be a better choice, but several years ago we noticed sales increased significantly in January 2009 over December 2008, probably due to the availability of funding and distressed properties.
A perfect solution to the data collection would be to use all the data for each year. Unfortunately, the previous platform for the Colorado Springs MLS, did not allow for large volumes of data to be downloaded for analysis at any one time. So, in the beginning, we opted to pull and manipulate the data 15 times vice 180 times. This also makes it simpler to update annually when dealing with only one month.
Analysis for School District 20, District 49, and District 11
For listings sold, the trend for each area is more important than the actual numbers, primarily because District 11 covers a significantly larger area. From the chart, we see that in 2018 the number of listings sold continued to increase for both D11 and D49 with a slight decrease for D20. D11 was up 9%, D49 up 17%, and D20 down 1%.
Average Sales Price
The market continues to trend up for Average Sales Price for all three school districts. D20 improved 6.8%, D11 8.0%, and D49 7.8%. We would really like to see this appreciation rate at about 6-8% year over year. When it climbs too fast, then when there is a market correction, it can trend downward at a faster rate, just like we saw in 2008 and 2009.
Median Sales Price
This year we saw an increase in the median sales price for both D20 and D11 and a significant drop for D49. Academy District 20 had a 12% increase, D11 had a 9.8% increase, and D49 had a 13% decrease. This significant change in D49 can be explained by the greater than normal increase in median sales price in 2017.
Average Price/Total Square Foot
All three districts saw a healthy increase in price/total square foot in 2018. D20 had an increase to $127/sq ft, a 4% increase over 2017. D11 increased to $136/sq ft, which is an increase of 10.3%. And D49 had an increase to $118/sq ft, which is an increase of 11%. For the first time, D11 average price/total sq foot is higher than the other two school districts. This is not that unusual since on average D11 homes are smaller in square footage which in a healty market will sell for a higher price/square foot.
The number of distressed properties to include bank owned and short sales, continued to decline. Very seldom do you see a bank owned property remain on the market for more than 30 days, often with multiple offers. Last year I reported that banks were putting cash into the property by painting, replacing carpet, and installing new appliances, and then listing the home for market value. Today, they are listing at market value with very few repairs, an indication that the inventory is so tight, that bank owned properties are no longer a good deal nor do they take long to sell.
The percentage of distressed properties for Academy School District 20 decreased from 4% to 1.6%, while D11 dropped from 6% to 3.7%, and D49 decreased from 3% to 2.8%. Once again, with the recovering housing market, homeowners are finding that they have enough equity in their homes that they do not need to sell their homes using a short sale. My experience is that most of the distressed properties are estate sales.
Seller concessions continued to decrease in D11 and D49 with only a slight increase in D20. Concessions are very popular in a buyer’s market. To improve their chances of a sale, sellers frequently offer or agree to pay a portion of the buyer’s closing costs or for other improvements. Higher concessions are indicative of the desperation of the seller and also an indication that the seller is willing to give up equity in return for selling the home. Once in a seller’s market, average concessions decline. This is the result of competing offers where the final net to the seller is often the determining factor. The lower the seller paid concessions, the higher the net. Buyers need to keep this in mind when making offers in a competitive market. Seller paid concessions are at the discretion of the seller and not always a foregone conclusion.
For Academy District 20, Seller concessions increased 1.6% from one year ago. D11 decreased by 42.4% and D49 decreased by 21%. In this market, we are seeing more cash offers for the lower priced properties, which is also why we saw a drastic drop in seller concessions for both D11 and D49.
Sales Price/List Price Ratio
In January 2018 Sellers were not having to negotiate much on price. The sales price/list price ratio was 98.8% for D20, 99.1% for D11, and 99.6% for D49. D11 and D49 average days on market were 34 and 33, while D20 Days on market was a bit higher at 63, all lower than the previous year. Typically, higher priced homes take longer to sell, but it is still just over 2 months for D20 which is very good.
In Summary: Housing Analysis for School District 20, District 49 and District 11
It is our opinion that based on the January 2018 housing statistics, that homes purchased in any of the three school districts will retain their value if the housing market continues to improve. The statistics for January 2018 show that D20, D11, and D49 all faired well at retaining or gaining in price/sq ft. In previous years Academy District 20 clearly showed an advantage, but for the past three years, we are not seeing this based on the average sales price, median sales price, and now price/square foot.
It is still a good time to sell or buy. Sellers often receive multiple offers for well-priced homes in good condition. Buyers should consider buying now while interest rates are still low and before the prices appreciate too much.
By Nancy Murray
Murray & Associates, Keller Williams Colorado Springs