Not solely in Denver, but in addition in Colorado Springs, actual property costs are skyrocketing and it might take some time for them to decelerate

Soaring home prices in Colorado’s two largest real estate markets have not eased in the final months of 2021, when home buying typically cools off due to the change in season.

The median price for a single-family home in Metro Denver in December was $543,000, down just $2,000 from June’s record high. In the Pikes Peak region, the median in December was $450,000. That was the record this summer.

Real estate agents and economists say ongoing supply chain disruptions, societal shifts to working from home during the pandemic, and broader issues ranging from stricter building codes to shifting demographics in the region are keeping house prices high for a decade and will continue to rise.

A recent forecast by California-based Realtor.com projects that Colorado Springs will occupy the 14th hottest housing market in the country in 2022. The Denver-Aurora-Lakewood combined area also made it to #48 on the top 100 list.

That distinction follows news that a southeastern Colorado Springs zip code was first in the country when it came to the number of times listed homes were viewed and the speed at which those homes sold. Across the Pikes Peak region, a home stayed on the market an average of just seven days in June 2021.

“It’s become a joke among real estate agents, ‘It has to change [from days] to hours in the market,'” said Ann Kidd, Chair of the Pikes Peak Association of Realtors.

A hot housing market can represent many things. It can indicate a community’s attractiveness as a place to live and is often an indication of the growth of high-paying jobs. Colorado Springs has attracted attention in both areas in recent years.

However, Kidd said the rise in house prices in the region was largely due to problems in housing stock production that predated the region’s recent economic rebound.

“The answer should be [that] Builders should be able to ramp up production to build more homes. This is a golden age for homebuilders,” said Elliot Eisenberg, a freelance economist who formerly worked for the National Association of Homebuilders. “This is the market screaming, ‘Build more.'”

Dan Boyce/CPR NewsA new townhouse will be built on January 12, 2022 in the Ivywild neighborhood of Colorado Springs.

Eisenberg said supply chain issues as a result of the pandemic have created shortages in the construction industry in the short term. But he argued that in the long run, builders would be more hampered by onerous and overlapping regulations at all levels of government. Some of these rules are designed to ensure safe building practices, while others restrict what type of housing can exist in certain neighborhoods or how many lots can exist on a lot.

Eisenberg said he believes the scale of these regulations is preventing developers from making enough profits from building cheaper forms of housing. These constraints, along with the millennial generation entering the prime homebuying age — “the largest cohort in U.S. history” — will result in demand far exceeding supply for years to come , he said.

Overall, Colorado Springs home prices are nearly 18 percent higher than last December. But it’s not just real estate prices that are rising.

A recent report by the Council for Community and Economic put the cost of living in the Springs at the highest level on record, 9 percent higher than the national average. Housing leads the way in pushing this number higher, although the Transportation and Miscellaneous Goods & Services categories are also rated as above average.

Kidd said sellers still have the power when it comes to house prices.

“Everyone makes concessions in this business except sellers. Sellers are king,” Kidd said. “They rule the country.”

Logically, it would also be a great time for real estate agents. Kidd said it does — for the few brokers who can get affordable deals. When she looked at the most recent records of homes for sale in the Pikes Peak area, she counted just 29 three-bedroom, two-bathroom homes for sale under $500,000 — housing stock that she described as “average, typical American dream”. There are now 4,600 real estate agents operating in the same region, she said.

“It’s a crazy mess,” she said. “We have hungry buyers, but we also have hungry agents.”

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