Average home prices climbed to a record high of $510,180 in October, based on homes sold in the Colorado Springs area during the month, according to the latest market trends report from the Pikes Peak Association of Realtors. A strong demand and a tight inventory continue to drive up home prices, industry experts say. THE GAZETTE FILE 

Average home prices soared to a record high last month in the Colorado Springs area, as demand for housing remained strong and the inventory of properties for sale continued to be historically low.

The average price of single-family and patio homes that were sold in October jumped to $510,180, eclipsing the record of $502,961 set in June and 18% higher than the average price of $432,477 in October 2020, according to the Pikes Peak Association of Realtors' market trends report released this week.

The median price of homes sold rose to $446,000 in October, or 16.3% higher on a year-over-year basis, the report showed. That figure was a few thousand dollars shy of the record of $450,000 set in June and equaled in July and August.

The average price can fluctuate depending on a few very high or low home sales, and housing industry experts and economists typically don't consider it as reliable as the median. Nevertheless, the record average price points to an ongoing trend of spiking housing costs in the Pikes Peak region. Average and median prices have increased on a year-over-year basis every month since December 2014, including double-digit percentage gains since July 2020.

"It's still pretty strong out there," George Nehme, with the local office of LIV Sotheby's International Realty and Pikes Peak Association of Realtors board chairman, said Thursday. 

The supply of homes still isn't keeping up with demand, Nehme said; the housing shortage has played out in the Pikes Peak region and other parts of the country for the last few years.

As a result, many home sellers continue to field multiple offers that typically exceed their asking price, Nehme said.

The demand for homes has been fueled in large part by exceptionally low mortgage rates; on Thursday, 30-year, fixed-rate loans averaged 3.09% nationally, according to mortgage buyer Freddie Mac. That was down from 3.14% a week ago, though up from 2.78% a year ago.

"The inventory is creeping up a little, but the demand is still high," Nehme said. "We're still seeing a record number (of homes) under contract."

Nehme said he doesn't foresee much change to local market trends in the next few months. Colorado Springs remains an attractive place to live, and its strong economy and population growth will continue to propel the demand for housing, he said.

"It's just been a very good market," Nehme said.

The Realtors Association's market trends report tracks home sales reported by local real estate agents, though excludes individual home sellers. Most of those sales take place in El Paso County, with others in a handful of Front Range counties.  

Other highlights of the Realtors Association report show:

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• Home sales totaled 1,641 in October, a 5.3% decline from the same month last year. That drop is somewhat misleading, however, because it's being compared against October 2020, when home sales were the highest for any October on record. If last month's home sales were compared with October 2019, they'd show a 13.3% increase.

• For the first 10 months of this year, home sales totaled 15,250, a 5.3% increase when compared with the same period in 2020. With two months left in the year, annual home sales are on pace to top last year's record of 17,337.

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• Homes sold briskly in October, spending an average of 12 days on the market before selling. In October 2020, homes were on the market for an average of 21 days before they sold.

• Homes under contract and whose sales were pending totaled 2,363 in October, down 10.6% from the same month last year, yet up almost 12% from 2019 and just over 31% from 2018.

• The inventory of homes for sale at the end of October totaled 1,048, up 19% over the same month last year and the second straight month that the housing supply has increased on a year-over-year basis. Despite more homes on the market, however, October's supply remained tight. Two years ago, the number of homes for sale in October topped 1,900; in October 2018, the inventory was almost 2,400. 

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