The number of Colorado Springs-area homes listed for sale last month reached a nine-year high, though a larger inventory of properties from which to choose didn’t necessarily translate to more sales as prices and mortgage rates remained high for some buyers.

A new Pikes Peak Association of Realtors market trends report showed home listings totaled 3,320 in August, a 37.2% jump over the same month last year. Last month’s listings were the most since 3,378 in August 2015, historical data maintained by The Gazette show.

Even with more supply, August’s single-family home sales of 1,064 dipped by 0.3% from the same month last year, according to the Realtors Association report.

And of Springs-area homes that sold in August, the median sales price — or midpoint — reached $490,000, a 2.1% increase from $480,000 during the same month last year, the report showed. Median home prices have increased for 12 straight months on a year-over-year basis, a trend that followed several months of price declines after long-term mortgage rates spiked in late 2022 and during much of 2023.

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The increase in inventory might reflect too many homes that haven’t sold because they’re overpriced and perhaps not in the best condition or location to support the price that owners are seeking, said Dean Weissman, a real estate agent and part owner of The Platinum Group Realtors in Colorado Springs.

“It’s a combination of sellers still optimistic in their pricing, and so there are properties that are out in the market, staying on the market longer because of either optimism on the behalf of the seller, meaning … that they’re priced too high,” Weissman said “Or it’s a condition or location issue.

“You have these outliers that aren’t priced appropriately, that don’t have the right condition that matches the price, that are staying on the market longer, which is driving that inventory up,” he added.

At the same time, some buyer pools — such as first-time purchasers — can’t necessarily afford a home because mortgage rates remain relatively high, Weissman said. As a result, their decision to stay on the sidelines possibly has contributed to homes remaining unsold and inflating the current supply, he said.

More inventory, however, doesn’t mean homes aren’t selling.

Homes that are priced correctly to reflect the market and are well-maintained and in desirable neighborhoods continue to sell and even are receiving multiple offers, Weissman said.

Likewise, the demand remains strong for higher-end properties, including those with $1 million-and-up price tags, he said.

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Long-term, fixed-rate mortgages that zoomed beyond 7% in the second half of 2022, declined into the low and mid 6% percent range in 2023, but then surpassed 7% again this year, have pushed monthly payments higher and stymied the ability for some buyers to make a purchase, real estate experts have said.

Still, those rates have cooled of late. Last week, 30-year mortgage rates averaged 6.35% nationally, according to mortgage buyer Freddie Mac. That’s the lowest they’ve been since May 2023.

Because there’s pent-up demand on the part of buyers and sellers, there are opportunities for buyers to negotiate deals for themselves when purchasing a home, Weissman said.

Buyers can request, and sometimes obtain, concessions on the part of sellers, who might be asked to help kick in money at the closing table or help buy down and lower a buyer’s borrowing costs, he said.

If mortgage rates fall in the second half of the year on the heels of anticipated interest rate cuts by the Federal Reserve, the result likely will be increased buying and selling activity in the Springs market, Weissman said.

But that increased activity could have some negative consequences, too, he cautioned.

If buying ramps up, inventory could be whittled down and a tighter supply could result in higher home prices, Weissman said. That scenario could return the Colorado Springs area to more of a buying and selling frenzy that it experienced in 2020 and 2021, when long-term mortgage rates were historically low at roughly 3%, but there was a shortage of available properties, he said.

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That’s why, for some buyers, it might be better to purchase now at today’s mortgage rates and perhaps refinance down the road, Weissman said.

“If rates do fall lower, there’s going to be a potential strain on inventory, which is not going to allow for the buyers to … have the selection or … the ability to negotiate as strong as they are now,” he said. “Right now, it’s a good opportunity for buyers to buy.”

In more than half of current transactions, Weissman said, “you probably are able to negotiate some concessions, either buy down the rate and get a little more aggressive interest rate or have the seller contribute to closing costs or just be able to negotiate altogether off the purchase price itself. If rates fall, and even if we’re just continuing the absorption of our inventory and our inventory goes down a tad, I think all those opportunities for the buyers are going to be tightened up. There’s just not going to be as many opportunities.”