Wanted: More lower-priced homes for Colorado Springs buyers who are just starting out.
The Springs has a shortage of starter homes, and ranks near the top nationally when it comes to the gap between the availability of such properties and the number of buyers who want them, a study released Wednesday by online real estate firm Trulia suggests.
"The limited market in that particular price range is just phenomenal," Chris Lutyen, managing broker for the Colorado Springs office of Coldwell Banker Residential Brokerage, said in concurring with Trulia's findings.
The lack of starter homes in the Springs - which Trulia estimates at about $210,000 and below, although local real estate agents say is several thousand dollars higher - is part of an overall shortage of housing inventory.
In January, the supply of homes listed for sale by local real estate agents plunged to 1,331, according to the Pikes Peak Association of Realtors. That's an apparent record low for any month, based on 20-plus years of Realtors Association data.
With so relatively few homes available, the starter-home portion of the market is especially feeling the pinch.
"We just don't have any good homes in that price range," Lutyen said. "And when they do come on the market, they get multiple offers. And so they get bid up, and many times these young families, these people that are just staring out, are priced out of the market."
Buyers for starter homes, he added, should be prepared to offer $10,000 to $15,000 above the asking price.
Joe Clement, broker-owner of Re/Max Properties in the Springs, said one of the agents in his office recently listed a bank-owned property for $146,000.
The home, which was in rough shape, nevertheless drew 12 offers and sold for $168,000, he said.
"We have a problem," Clement said of the lack of starter homes and other properties.
Trulia's study, which it calls a look at "mismatched markets," examined the demand for housing in cities around the country during the fourth quarter of 2016 - starter, trade-up and premium homes.
A market mismatch is Trulia's measure of online searches for homes compared against available listings. If 60 percent of buyers searched for starter homes, but only 40 percent of listings fit that category, the market mismatch score would be the difference between the two - 20 percentage points, Trulia says.
Trulia's study looked at housing types across the board, and then broke them up into the starter, trade-up and premium categories.
Colorado Springs doesn't show up in the Top 10 of mismatched market scores for pricier properties.
But for starter homes, Colorado Springs ranks No. 2 in the country with a mismatched market score of 13 percentage points; in the fourth quarter, 31.9 percent of local home searches were for starter homes, but only 18.9 percent of listings fit that category, Trulia said.
Only Raleigh, N.C., had a bigger starter home gap - 14 percentage points. Denver was No. 3 in the starter-home category with a mismatched market score of 12.9 percentage points.
But solutions to the lack of starter homes aren't easy, Lutyen and Clement said.
Some sellers hesitate to put their homes on the market for fear they won't be able to find another to buy, Lutyen said. And if mortgage rates rise, buyers won't be able to afford as much home, which means they'll have to lower their sights on price - putting more pressure on the starter-home market.
More new homes would help, Clement said. But it's not cheap for developers to buy land and get it ready for construction. Builders, meanwhile, are faced with rising labor and material costs, which makes it tough for them to offer starter-home prices, Clement said.
"There just isn't enough inventory," he said.