Winter 2022 - 2023 El Paso County vs Palmer Lake Real Estate Market

Bottom Line on Top: despite increased inventory, increased interest rates and slowing of sales, El Paso County and Palmer Lake sales are strong.

Reading the tea leaves…

It is so important to understand broad macro factors when buying or selling real estate AND also hyper local trends.

For example in the first graph, for all homes listed in the MLS for El Paso County, you’ll see that average home prices (blue line) have remained relatively flat over the past year, but the number of days on market (green line) is quickly increasing.

Compare that to what is happening specifically in the Palmer Lake market. (Graph to the right). In this case, you can see that home prices are trending slightly downward. Days on market has increased even more dramatically than the county as a whole.

But what does this mean in terms of outcomes we can see and feel?

This means that homes are staying on the market for longer. Buyers are more discerning about making offers and sellers are more willing to negotiate.

It’s important to note Colorado in its entirety is still at all time lows for inventory. And experts don’t expect to see that get resolved any time soon. Current forecasts indicate that the Colorado housing market will be short by nearly 200,000 homes by 2028. With that kind of shortage, you just don’t see prices falling.

This backlog started after the housing / loan crisis of ’07 & ’08. Nearly 40% of construction companies went out of business from 2010 through 2020. This, combined with stricter zoning laws and regulatory burdens, means fewer homes are being built.

Understanding the supply side of homes…

You’ll notice that the number of listings in Palmer Lake peaked in the summer of 2018 (and also went up during the summer of 2022). And although homes are staying on the market for longer, inventory in Palmer Lake remains near record lows. When this happens, it puts pressure on the buyers to chose among the inventory or go elsewhere. Where else might those same buyers go?

That’s where the broader el paso county picture comes into play…

You’ll see a very different graph for the inventory of homes for sale in El Paso county. It follows a more typical pattern: peak number of new listings in the summer and a seasonal slow down in the winter months.

Based on the low inventory in Palmer Lake and a more traditional pattern across El Paso, it would be logical to conclude that the slight downward trend in Palmer Lake prices (as shown above) does not signal any kind of impending catastrophe. In fact, there are still strong buyers and the market is historically still strong.

Historic view of all sales in El Paso County

And now the fine print: The above information has been researched from the Pikes Peak MLS System (www.PPAR.com) by Penny Smith of eXp Realty, LLC based in Larkspur, CO. It is believed to be accurate, but is NOT guaranteed. Every property will have unique factors affecting value such as location, condition, acreage, quality, size, age, upgrades and features. A thorough in-person assessment by an experienced real estate broker or licensed real estate appraiser is recommended to determine the actual current market value on an individual property.

Give me a call to discuss the fine print and determine how your home fits into these macro factors.

P SmithJanuary 26, 2023