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Has low housing inventory in Colorado hurt the real estate market?

Low inventory appears to be hurting the Colorado Springs housing recovery

For a free market analysis on your Colorado Spring home, email Kathy at [email protected] or call 719-287-1049

At first glance, it seems like a great time to buy a home in Colorado Springs, or investment properties in Colorado Springs; as prices are still lower and interest rates are cheap.   But, the biggest challenge IMG_0692right now for buyers is the lack of inventory on the market.   It wasn’t that long ago that there were too many houses on the market for sale; and this is still true for higher price homes; but not for houses priced $400,000 and below.

As part of doing my year end market reports, I put together some info on Absorption rate by difference prices.  Absorption rates are calculations that show the  number of houses on the market per the current demand; essentially if there is 6 months of inventory on the market, the market is considered to be in balance, the same number of buyers as sellers.  When there gets to 7 to 9 months of inventory on the market, it’s a buyer’s market; 3 – 5 months if a seller’s market,

House Price

Active Listings

2012 Sold Single Family Homes

Absorption Rate (Inventory on the market)




            2.6 months

$100,000 – $200,000



            2.9 months

$200,000 – $300,000



            3.6 months

$300,000 – $400,000



            4.4 months

$400,000 – $500,000



            6.7 months

$500,000 – $750,000



            8.5 months

$750,000 – $1,000,000



          20.3 months

$1,000,000 to $1,500,000



          28.2 months

$1,500,000 to $2,500,000



          52.0 months




        156.0 months

The number of homes sold in 2012 vs. 2011 are up 8%, but the number of actives homes on the market are 12% less than the same time as last year.   I know I personally have several buyers who are ready to purchase, but we just can’t find what they are looking for.  Certainly has made me wonder if the lower housing inventory is hurting our housing market recovery.  I’m certainly not an economist, but it would be interesting to hear what an economist says, how do they interpret the numbers?

Related Posts:

Why should you care about Absorption Rates?


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For even more information, contact Kathy Torline by calling or texting 719-287-1049, or email [email protected]


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