Or is the sky falling? It’s so hard to tell. The Colorado Springs real estate market is definitely experiencing a correction that was due. Lower interest rates fueled a real estate buying bonanza in Colorado Springs in the last few years aided by the profits buyers brought from other, higher markets. But Colorado Springs never really reached bubble intensity. Our exuberant building and borrowing did not swell to bursting like it did in Las Vegas, much of California and Phoenix. Colorado Springs real estate is affected by those markets and enjoys (and suffers) a trickle-down effect. Colorado Springs is the little sister who accepts the hand-me-downs. Because our big sister markets could not sustain the profits and continue to send some our way, we could not sustain our rate of growth either.
At the beginning of 2008, Colorado Springs has about 7 months of inventory (that’s homes waiting to sell). In some areas the glut is higher. Many people have taken their homes off the market hoping for things to turn around. It will be a little while. But take heart: our market did not experience a 40% increase in 2006, so it didn’t see a 35% decrease in 2007. If you bought and had to sell in the last two year, I’m sorry. Lousy timing. The lesson to be learned is similar to the lessons of investing in stocks; don’t plan to pull your money out soon. Over any 10 year period, Colorado Springs real estate prices tend to plunk along and stay ahead of inflation. If you’re not in a hurry, you will be fine. No need to watch for pieces of falling sky.