Third-quarter home prices in Colorado Springs rose by nearly 25% on a year-over-year basis, according to a federal report released Tuesday. The Springs' gain in prices ranked as the 14th largest among 100 metro areas in the report. THE GAZETTE FILE

Colorado Springs' soaring home prices show no signs of slowing and continue to rise at one of the fastest clips in the nation.

Local prices spiked by 24% in the third quarter when compared with the same period last year, according to a report released Tuesday by the Federal Housing Finance Agency, which collects sales data nationwide for its quarterly home price index.

The Springs' percentage increase in the third quarter ranked as the 14th highest among the country's largest 100 metro areas, the report showed.

"If you're a homeowner, you're getting a record high appreciation of the value of your home," said veteran real estate agent Harry Salzman of ERA Shields Real Estate and Salzman Real Estate Services. "And it's across the board. Every price range. Every neighborhood. All locations. It's consistent."

The latest price increase underscores market conditions in Colorado Springs and the Pikes Peak region that have been unchanged over the last few years.

A furious demand for housing — driven in large part by historically low mortgage rates — and a shortage of new and existing homes available for sale have helped propel prices, real estate industry experts and economists have said.

Other factors that have spurred the demand for housing in Colorado Springs include the city's booming population; a local economy that state officials say has recovered the jobs it lost during the COVID-19 pandemic; and a quality of life rated among the nation's best by U.S. News & World Report.

Colorado Springs, however, isn't the only area seeing hefty home price increases, the Federal Housing Finance Agency report shows.

Nationwide, third-quarter prices rose 18.5% on a year-over-year basis, and all 100 metro areas in the report saw an increase. The largest, 37.3%, was found in Boise City, Idaho; Philadelphia's 9.9% gain was the smallest.

Denver-Aurora-Lakewood, the only other Colorado market listed in the report, saw a 19.1% increase in home prices in the third quarter, which ranked as the nation's 38th largest.

"All of a sudden, we're that far ahead of greater Denver. I don't remember when we've seen it," Salzman said of the Springs' percentage increase in prices — though actual home costs in Denver are much higher. Denver's median price of $585,000 in October was nearly $140,000 more than in the Springs, according to reports from Realtor groups serving each market.   

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The Federal Housing Finance Agency's findings reaffirm reports from the Pikes Peak Association of Realtors and National Association of Realtors that also have shown steep price hikes, though the reports differ in their methodology.

The federal report is based on repeat purchases of the same properties over several decades, which some economists and real estate industry experts say is a more accurate way to measure changes in prices.

Monthly reports by the Pikes Peak Association of Realtors and quarterly reports by the National Association of Realtors track the price of homes sold during a given period; that pool of homes changes from month to month and quarter to quarter.

The Pikes Peak Association of Realtors report for October, the latest available, showed the median home price for that month was $446,000, a 16.3% increase over October 2020.

The National Association of Realtors report for the third quarter showed a Springs' median home price of $441,200, which rose 18.6% on a year-over-year basis.

Skyrocketing prices have been a double-edged sword for Colorado Springs and other areas.

Homeowners who sell can command top dollar for their properties, and frequently choose from multiple offers that top their asking price by several thousand dollars.

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But because of the shortage of homes for sale, buyers — especially first-timers — compete with each other to find a house, and many who lose out wind up disappointed.

Despite those frustrations, Salzman said buyers who are successful at finding a home should look upon their purchase as an investment whose value will continue to grow over the long term.

"Anyway you can, buy now, upgrade now," Salzman said. "Because you're going to be patting yourself on your back and you're going to be happy. ... I don't think it's taking a risk. If you can afford to upgrade, buy now, whatever, do it. You're going to be happy happy because our appreciation is going to continue to roll."

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