Mariana Wagner

New Home Construction in Colorado Springs: Sold Units WAY Down … But WAY Normal

The new home construction side of Colorado Springs Real Estate has dropped quite a bit in the past year, but according to the past 5 decades this is perfectly normal. According to David Bamberger (local consultant and economic researcher for David Bamberger & Associates and columnist for the Gazette):

“New home construction in the first 10 months of 2007 fell to 2,744 units from 4,045 in the same period in 2006, a decline of 33.2%. That is on the heels of a 34.6% decline in 2006.”

Regardless of the immediate shift, what we are seeing in regards to new home construction in Colorado Springs is just part of a cycle. Take a look at this graph:

Let’s look at some interesting points regarding this cyclical shift:

The Colorado Springs Real Estate new home market actually stayed quite high for longer than it has historically, partially due to the low mortgage rates. This is actually good news. Seeing as interest rates are STILL historically low, this just might soften the housing shift that is still in front of us.

The new home market and the resale Colorado Springs Real Estate housing markets are actually on a similar path, regarding units SOLD. New home sales seem to react more dramatically, though. Take a look at this graph that measures SOLD units from 1995-10/2007:

For several years, it was almost more economical to buy a new home in Colorado Springs than to look for a resale home. Builders were making so much money, they were giving it away by the truckload. As a home seller in Colorado Springs, it was hard to compete with $25k in incentive money, free TVs and 8% co-ops to Buyer Agents. The cycle is leveling out the playing field, so that resale homes in Colorado Springs can be more competitive.

• Although there are more resale homes on the market, there are less new homes on the market (as seen above) and less new home builders to compete with, as a Seller.
• Builders are scaling WAY back on their incentives because they can no longer afford to spend that kind of money.

Having a Buyer Agent represent you when buying a new home in Colorado Springs is more important now than ever. Builders are actually more willing to negotiate on price and upgrades, and an effective negotiator on your side could save you thousands of dollars.

Although you will still find some great builders in and around Colorado Springs, you will notice that there are a lot less new home communities than even a year ago. And the builders that have stuck through these shifting times are some of the better builders anyway.

The Colorado Springs Real Estate new housing market really IS business as usual. “Usual” is just defined in a broader sense of the term. And, this cyclical shift in new build homes in Colorado Springs is not all bad, if it is even bad at all.

Like David Bamburger says in his recent article: “So, just like the old adage says, ‘What goes up, must come down.’ The reverse is also true, ‘What goes down must come back up … eventually.’”

Read Also: Dispelling 3 Housing Market Media Myths – Myth #2: We are in a Down Market

November 26th, 2007 by Mariana Wagner | Leave A Comment

This entry was posted on Monday, November 26th, 2007 at 12:07 pm and is filed under About Colorado Springs, BUYERS, Colorado Springs Homes, Colorado Springs Real Estate, New Home Builders. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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