The recovery that took hold last year in the Colorado Springs-area housing market should continue to gain steam in 2013.
“We’re going in the right direction,” said Bruce Betts, broker owner of Re/Max Advantage in Colorado Springs.
Betts’ upbeat look was one of four assessments of the local real estate market and economy presented Thursday at the 22nd annual forecast breakfast sponsored by the Southern Colorado chapter of the Institute of Real Estate Management. About 250 people attended the event at the DoubleTree Hotel Colorado Springs.
In a best-case scenario, sales and prices will rise 10 percent this year for single-family homes, primarily those in the $250,000-and-under range, Betts said. Sales and prices of higher-end homes won’t fare as well; they’ll either be flat or could increase up to 5 percent, he said.
Historically low mortgage rates, a reduction in foreclosure activity, a stable supply of homes for sale and more troops at Fort Carson are among factors driving home-buying, Betts said.
A series of scenarios presented by Betts showed that monthly principal and interest payments to buy a house in some Springs neighborhoods are roughly 40 percent less than the cost to rent an apartment or home. The scenarios assume a mortgage at today’s rates and no money down.
“The difference between renting and buying is so extreme now,” Betts said in an interview. However, not everybody can qualify for a mortgage, which is one reason why many people continue to rent, Betts said.
Even as he forecast an improvement in housing, Betts cautioned that the single-family market could be slowed by the area’s high unemployment rate, which was 9 percent in December; uncertainty about the economy on the part of consumers; a rise in interest rates; and stricter borrowing rules that make it tough for some buyers to qualify for a mortgage.
In other market assessments:
• Office and retail vacancy rates and rents should improve in 2013, but the industrial market will continue to lag, in part, because of a lack of manufacturing jobs, said Brian Wagner, a broker with Sierra Commercial Real Estate.
• The apartment market will remain strong in 2013, as high occupancy levels translate into rising rents, said Doug Carter, a Springs broker with national real estate firm Sperry Van Ness.
• Several projects — including a new Wal-Mart data center in northern Colorado Springs, a new Agilent Technologies data center and tech center on the northwest side and the opening of the downtown Mining Exchange Hotel — pumped hundreds of millions of dollars into the Springs economy last year, said Bob Cope, a principal analyst with the city’s Economic Vitality Division.
Activity will continue this year with the completion of the north-side Bal-Seal manufacturing plant and the opening of a mixed-use center at the former Ivywild Elementary School south of downtown, he said.
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