Colorado Springs’ housing market remains one of the nation’s hottest, according to a pair of reports released Tuesday.
Single-family home prices in the Springs rose by 8.2% from the second quarter of last year to the second quarter of 2019, which ranked as the fifth highest appreciation rate among the nation’s 100 largest metro areas, a report by the Federal Housing Finance Agency shows.
The Springs’ increase in home values has been fueled in large part by a surging economy, which has boosted consumer confidence, kept demand steady and helped drive up prices, said longtime real estate agent Harry Salzman of ERA Shields Real Estate and Salzman Real Estate Services.
As evidence, Colorado Springs unemployment fell to 3.5% in June, a 14-month low; first-quarter wages in El Paso County, meanwhile, soared by 5.1 percent for the fastest growth rate in two years.
“When you have the strength of job growth, to me, that justifies upgrading your current house, having a house built or buying a resale, whatever it is,” Salzman said. “Job growth, job demand does have a correlation to the strength of housing. When you’re seeing that 8%, it’s no surprise.”
Historically low mortgage rates also give many people a good reason to buy, whether it’s an entry-level purchase or a move up, Salzman said. Last week, 30-year, fixed-rate loans averaged 3.55% nationally, the lowest in nearly three years, according to mortgage buyer Freddie Mac.
Many Colorado Springs residents also are satisfied with the area’s elected leadership, which also boosts their confidence in the local economy, Salzman said.
“They’re strong with their jobs, they’re doing well. The cycle of economics is letting them upgrade their personal assets.”
The Springs’ housing market isn’t without its problems, however. Rising prices are making it tougher for entry-level buyers to purchase a home and houses under $300,000 are increasingly difficult to find. Some buyers have resorted to looking in Pueblo after being priced out of the Springs market.
At the same time, a historically low inventory of homes for sale has contributed to price increases, while many buyers wind up competing against each other when they find a house they like.
In the Federal Housing Finance Agency’s second quarter report, Boise City, Idaho, ranked No. 1 in the nation with a 13.6% increase. Denver-Aurora-Lakewood was the only other Colorado metro area in the report, with an increase in home prices of 3.5%.
Nationwide, prices were up 5 percent.
The Federal Housing Finance Agency report and home price data are based on repeat purchases of the same properties over several decades. Some economists believe the data provide a more accurate view of housing prices.
The agency’s report differs from the Pikes Peak Association of Realtors, which compiles the prices of homes sold in a given month by its members and compares them to the prices of homes sold a year earlier.
The Realtors Association’s latest report showed that median prices in July climbed by 7.1 percent on a year-over-year basis and set a record high of $332,000.
Colorado Springs also received high marks Tuesday from WalletHub, a personal finance website.
In its 2019 report on the most-attractive real estate markets, WalletHub ranked Colorado Springs as the 27th-best real estate market among 300 metro areas nationwide. When WalletHub narrowed the field to cities with populations of 300,000 or more, Colorado Springs ranked No. 8 out of 64.
To come up with its list of most attractive real estate market, WalletHub examined 23 factors in each city, including home price appreciation; number of days on market until a home sold; building permit activity; foreclosure rates; job and population growth; and unemployment rates.
Four Colorado cities were rated even higher as strong real estate markets in WalletHub’s report: Thornton, No. 16; Aurora, No. 18; Greeley, No. 20; and Denver, No. 21.