In June, Colorado Springs real estate prices hit a new record high. For the first time, the median price for a single-family home reached $500,000.
It breaks the previous record of $499,000 set last summer, according to the Pikes Peak Association of Realtors. Sure, it’s only $1,000 more. Still, PPAR President Windy Bailey noted it’s an important psychological barrier for many homebuyers.
“It’s the verbiage, it’s half a million dollars,” Bailey said. “That’s what creates a stigmatization, that we are one of the most unaffordable areas to live in the country.”
There are other housing markets even on the Front Range that are more expensive than the Springs. Boulder regularly posts its median home price above $900,000. Fort Collins recently notched a median price of $585,000 and Denver’s was sitting at $665,000 at the end of May.
And, like Denver, the high prices in Colorado Springs are persisting even as the number of homes sitting on the market accumulates. There were 4,055 houses for sale in the Pikes Peak region in June, the highest number since summer 2014.
Bailey said home prices rose rapidly during the COVID pandemic from increasing demand and low mortgage interest rates. The pace of their increase has since slowed, but mortgage rates are also much higher now. Despite the glut of supply, housing cost inflation from the pandemic years leaves many buyers still unable to enter the market.
“Your first-time home buyers don’t have enough down payment, or they can’t afford the monthly payment because the interest rate is so high at that half a million dollar price point,” Bailey said.
Meanwhile, she said homes priced at $700,000 or $800,000 are actually selling more quickly than starter homes. So, while the average days a home remains on the market in the region dropped to 40 in June — from an annual high of 68 in January — Bailey said starter homes are actually waiting around longer to be sold.
The state legislature passed a bill this year seeking to incentivize the construction of more multi-unit housing options for purchase, like condos. House Bill 1272, now law, seeks to incentivize more building by reducing the number of lawsuits filed against builders by homeowners over alleged construction errors. Bailey called it a “tiny win.”
“It’s not enough,” she said. “You’re not seeing those (entry-level homes) being developed at all right now, and what is here continues to appreciate.”
