COLORADO SPRINGS – Buying a house in Colorado Springs this summer will cost an average of $100,000 more than if you’d bought five years ago. The median home price grew from roughly $210,000 in 2014 to $315,000 this year.
“We have definitely made some huge jumps,” said Realtor Donna Major, the Chair of the Pikes Peak Association of Realtors.
This surge in prices comes primarily from a lack of supply. The current inventory of around 1,300 homes on the market is especially low.
“We’re normally between 3,000 to 4,000 listings,” Major explained. “So, being at 1300 is extremely low.”
These are favorable conditions for homebuilders. The planning department with the City of Colorado Springs has tracked 12,786 new single-family and multifamily residential builds between 2015 and 2018.
Permits filed with the Pikes Peak Regional Building Department for new single-family homes grew by 10 percent last year to 4,083. That’s on par with the 4,138 new home permits pulled in 2006.
“In the past 4 years, we’ve seen an uptick every year leading up to this one,” said PPRBD spokesman Greg Dingrando.
However, buying a new construction home typically costs more than buying an existing one.
“Most of our brand new homes … there’s nothing priced pretty much below $450,000 if you looking for a single family home,” Major said.
Kevin Walker, the Public Policy Chair for the Housing and Building Association explained there are many costs that get rolled into the price of a new home.
“When we build a new house, you’re also paying for all the roads, and all the land, and all the parks, and all the schools, and all of those of things,” he said.
He believes many builders are changing the design of neighborhoods in order to keep prices lower for buyers.
“In terms of housing, I think there will certainly be an increase in density,” Walker said. “That’s one of the things that’s happening around the country and it’s certainly happening around here.”
Apartment construction is also growing especially fast in 2019.
“That’s actually one of the main things that we’ve seen this year in 2019 is a huge increase in apartment complexes going in,” Dingrando said. “We’ve actually seen a 47 percent increase when it comes to apartment complexes.”
Walker believes the boom in apartment construction will help the rental market to stabilize.
“Some of the pricing, while it’s still going up and it still feels a little bit like it’s very expensive, some of those increases have moderated,” Walker said.
He also points out that new construction can only do so much to ease pressure on the housing market.
“That’s still only 2 percent of the total market,” Walker said. “So, even if you double that amount, you’re really not going to make a large impact on demand that continues with job growth and optimism in the economy.”
A more direct way to relieve pressure on prices is to attract more sellers to the market. Major said many homeowners know they can get top dollar for their properties today, but they’re unsure of where they’ll land when they sell.
“People don’t want to sell their home unless they can find something they want to buy,” she said.
There are programs to help first-time homebuyers reduce the amount of downpayment needed to purchase a home. Major recommends working with a realtor and lender to figure out which programs work best for your individual situation.