Colorado Springs’ home shortage, which has buyers increasingly frustrated and real estate agents concerned, shows no signs of ending anytime soon.
Just 530 single-family and patio homes were listed for sale in December in the Springs area — the fewest over at least the last 25 years, according to the latest Pikes Peak Association of Realtors’ market trends report and Gazette records.
Last month’s miniscule number of homes was the equivalent of just under a two-week supply, based on the recent pace of sales and if no additional properties had come on the market, the association’s report shows. Homes in the report were listed by real estate agents, not individual sellers; most were in El Paso County.
With so few homes for sale, many frustrated buyers spend weeks and even months looking for properties.
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When they find one whose size, amenities and location are appealing, they often engage in bidding wars with other buyers and must submit offers that are typically several thousand dollars above a seller’s asking price.
Competition is especially fierce for homes priced at $400,000 and under.
“I’m concerned,” said veteran real estate agent Brian Maecker of Re/Max Advantage in Colorado Springs. “I feel we’re not in a healthy market. I think when buyers have to compete with 11, 12 other people, and they’re paying ($10,000), ($15,000) over appraised value, it’s wonderful for my sellers, but I think as a buyer, they’re not happy.”
Maecker said he had a client looking to bid on a home listed at $450,000, but the seller’s agent said 11 offers already had been received and were coming in at $475,000 to $490,000.
“I feel for the buyers in our market,” he said.
In turn, the scarcity of homes and a steady demand for housing fueled by low mortgage rates, population growth and the desirability of Colorado Springs and Colorado as a place to live, have combined to drive up prices.
“This is a major shortage, and that’s what’s causing a major escalation in prices,” Maecker said.
According to December’s Realtors Association report:
• December’s supply of 530 homes for sale was down almost 60% from the 1,302 homes listed in the same month the previous year. Five years earlier in December 2015, there were more than 2,100 homes for sale.
• The median price, or midpoint, of homes sold was $379,999 — up 15.2% from December 2019, though short of the record high of $385,000 set in September. Median prices have now risen on a year-over-year basis every month since November 2014, including double-digit percentage gains each month in the second half of 2020.
• The average price, considered less reliable by industry experts because it can be influenced by a few very high or very low sales, climbed 20% on a year-over-year basis in December to a record high of $437,365.
• December home sales totaled 1,376, a 10.3% increase over December 2019.
• For all of 2020, home sales totaled a record 17,337, surpassing the previous high of 16,337 in 2017.
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Amazon’s construction of a massive distribution center near the Colorado Springs Airport and Southwest Airlines’ expansion to town are among signs of the city’s growth and attractiveness, said George Nehme, a real estate agent with The Platinum Group Realtors and the Pikes Peak Association of Realtors’ 2021 board chairman.
“People are leaving other parts of the country to come to Colorado,” said Nehme, adding he can’t recall a time of more residential and commercial growth in the Springs. “The word is out.”
But with so much demand, why aren’t there more homes for sale?
Many older homeowners who want to sell and move to retirement centers or smaller homes can’t find an affordable place to live, Maecker said. Some of those older owners also fear the COVID-19 pandemic and don’t want to move until conditions improve, he said.
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“They’re not making that move,” Maecker said. “So we’re not getting the usual turnover of inventory from a lot of the older clientele.”
At the same time, some owners who want to move up to a larger home can’t afford to do so because of soaring prices; instead of selling, they build an addition, he said. Still others who have $400,000-and-under homes and who might want to downsize worry they can’t find an affordable home.
“Availability is something we’re really concerned about,” Nehme said. “We’re (Realtors) trying to do everything we can at the state level to get tax breaks, to do everything we can to try and increase the affordability for first-time homebuyers, to increase the amount of homes for first-time homebuyers. They’re just being snatched up so quick.”