The Colorado Springs and Denver housing markets have at least one thing in common: a drastic shortage of homes for sale that has driven up prices, put sellers in the enviable position of fielding multiple offers and led to disappointed buyers who can’t find the house of their dreams.
In the Colorado Springs area, a miniscule 675 single-family, detached homes were listed for sale at the end of November, according to a new Pikes Peak Association of Realtors report. The supply plunged nearly 60% from November of last year and was the lowest monthly total over at least 25 years, data compiled by The Gazette show. Five years ago, the November inventory topped 2,600.
Likewise, the greater Denver-area supply of single-family, detached homes available at the end of last month fell to a record low of 1,755, a 62.7% year-over-year decline, the latest Denver Metro Association of Realtors report shows.
With such tight inventories, the supply of single-family homes listed for sale in the Springs and Denver areas would be exhausted over roughly two weeks if sales continued at their current pace and no more homes came onto the market, the reports show.
Though frustrating for buyers, the shortage of homes for sale signals a strong housing market and healthy economy, said George Nehme, a real estate agent with The Platinum Group Realtors in Colorado Springs and the Pikes Peak Association of Realtors’ incoming board chairman for 2021.
Newcomers continue to move to the Pikes Peak region, while employers such as online retail giant Amazon are adding jobs, despite the ongoing COVID-19 pandemic, Nehme said. Amazon will open a nearly 4 million-square-foot fulfillment center in 2021 near the Colorado Springs Airport.
“People are moving here and loving what Colorado Springs is all about. We have Southwest and In-N-Out Burger,” said Nehme, referring to the planned March launch of Southwest Airlines service in the Springs and In-N-Out’s north side opening last month. “We have so much happening. It’s good.”
Andrew Abrams, broker owner of A-Squared Real Estate in Denver and chairman of the market trends committee for the Denver Realtors group, said Colorado, as a whole, continues to draw new residents attracted by the state’s quality of life and job growth.
“This is a highly desirable place with a lot of jobs coming in,” Abrams said. “There’s not a lot of states where you can play golf and ski in the same day and have all these amenities available.”
Colorado’s desirability, however, has translated into a furious demand for homes.
The Pikes Peak Association of Realtors reported sales totaled 1,482 in November, a nearly one-fourth jump over the time a year ago.
Denver-area sales of 3,402 during the month rose just over 9% on a year-over-year basis. All price ranges were popular in greater Denver; in fact, sales were most active among homes priced at over $1 million, according to the Denver Metro Association of Realtors report.
As housing supplies tighten and demand continues, prices keep escalating.
The Springs-area median price of single-family, detached homes sold in November increased to $380,000, up nearly 17% from the same month last year; in Denver, the median price was $513,000, a 14% jump from a year ago.
But if there’s a demand for homes and sellers can fetch top dollar, why don’t more owners put their properties on the market?
In the Colorado Springs area, many homeowners enjoy where they’re living, Nehme said. They like their schools and neighborhoods. Historically low mortgage rates, meanwhile, have allowed them to refinance their loans and lower their monthly payments, which makes it easier to stay put, he said.
Some homeowners also worry whether they can find another home if they choose to sell the one they have, Abrams said.
“One of the biggest contributions to the lack of inventory is not knowing where they would go for more value,” he said. “Unless you’re having a lifestyle change, there’s really no incentive to be moving right now.”
Homes remain under construction in the Denver area, he added, but “it’s certainly not substantial enough to kind of increase the supply to change this scarcity problem.”
Construction is booming in the Colorado Spring area; single-family homebuilding permits in El Paso County have surpassed 4,000 so far this year, the first time permits have exceed that mark in 15 years. Even so, builders say those homes are being snapped up by newcomers to the area and by buyers who can’t find houses on the resale market.
The shortage of homes has helped create a sellers market. Homeowners often can pick and choose from multiple bids that exceed their asking price. Nehme said he represents a seller whose home will be listed Saturday at under $400,000 — a highly desirable price in Colorado Springs.
“We expect it to sell quickly,” he said.
While great for sellers, the supply-and-demand issues have left many buyers frustrated; they find themselves engaged in bidding wars over several weeks and even months as they search for homes.
And as prices rise in both the Springs and Denver, some real estate agents worry that many people will be priced out of the market.
“The question will become, at what point does this become unattainable? Abrams said. “It’s a question I don’t have an answer for.”
This content was originally published here.