How does one measure equity gain? A very common measure is the average or median sale price of a home over a period of time. Here are the last 3 years average and median prices in the area:

Evaluating this chart we could read that the average closed price over the last several years has swung from app. $475K to $575K or so. It would be reasonable to read that as the market has gained $100K in equity in that timeframe, on average.

But something here doesn’t sit well with me specifically in regard to capturing a measure of equity gained. If we want to measure that, it’d be a better measure to evaluate homes that sold multiple times.

Here’s what that looks like over the last three years.

This chart tracks the average gain of homes sold at least twice over the last three years. Here’s how we can read this: the average gain of a home sold in 2024 that was purchased/sold in the last three years at least once more was app. $44K. This is down from $55K in 2023, which is down from app $74K in the high of 2022, which was up from $62K in 2021.

The TLDR; the average gain from reselling homes, which I take to be a measure of actual equity captured, is app $44K, down app. $17K from last year.

Does this mean you can buy a home and capture $44K (or perhaps $33K next year if the trendline holds) in net proceeds?

No.

Bear in mind these numbers don’t consider seller’s concessions, carrying costs, agent commissions. If we estimate 7-10% in cost to sell, these margins get eaten up pretty quickly.

Looking for insights into the Colorado Springs real estate market, please reach out to me Rob at [email protected] or 719-440-6626!