Colorado Springs-area home prices ascended to record highs again last month, as a shortage of single-family homes for sale and a furious demand for housing combined to send prices soaring.
"It's a wild and crazy housing market," said longtime real estate agent Harry Salzman of Salzman Real Estate Services and ERA Shields Real Estate.
The median price, or midpoint, of Springs-area homes that sold in March increased to $410,000, up nearly $60,000 — or just over 16% — from $352,400 during the same month a year ago, according to a report by the Pikes Peak Association of Realtors.
March's median price also surpassed the previous record high of $403,000 that was set in February; records also were set seven times in 2020.
Local median prices now are on a more than six-year streak of increases and have risen every month, on a year-over-year basis, since December 2014.
Also in March, the average price of homes sold climbed to $472,931, an $82,210 or 21% year-over-year spike from $390,721 in March 2020, the Realtors Association report showed.
Average prices are considered less reliable by economists because they can be skewed by a few very high or very low transactions. Still, the latest average underscores that housing has become far more expensive than in recent years.
The median and average prices in the Realtors Association report cover single-family and patio homes and don't include townhomes and condominiums. Most of the home sales in the report took place in El Paso County.
A lack of homes for sale in the Colorado Springs area — a problem that's dogged many metro areas nationwide over the last few years — is helping to drive local prices.
In March, just 462 homes were listed for sale, which is the equivalent of less than a month's supply based on the pace of recent sales, according to the Realtors Association report.
March's supply was unchanged from February and down a whopping 65.2% from the 1,328 homes listed for sale in March 2020 — the largest percentage drop in year-over-year inventory in nearly a quarter century, based on Gazette historical data.
Why so few homes for sale? Many homeowners don't want to list their properties for fear they won't be able to find another one to buy, Salzman said.
"I think there's people that, there is some motivation to do it (sell their home), but they don't want to stick their neck out and put their house on the market that's going to sell today or tomorrow, if they don't have a place to go to," he said.
When owners do list their homes, bidding wars often break out among buyers for the relatively few properties available, Salzman said. That competition drives up housing costs because many buyers will submit offers that are thousands above a seller's asking price.
Escalating construction costs for new homes also are driving up prices on the resale side, Salzman said.
Lumber, concrete and other building material costs have skyrocketed and new home prices have soared, he said. Some sellers of existing homes want top dollar for their properties so they can use those proceeds to afford the price of a new home, he said.
"When you put together the bidding war, in addition to the higher cost of construction, prices are just moving like we're not used to," Salzman said.
The demand for housing, stoked in part by low mortgage rates and Colorado Springs' desirability as a place to live, remained strong in March. Home sales totaled 1,342 for the month, up 5.7% on a year-over-year basis. For the first quarter of the year, home sales totaled 3,293, a 4% increase over the same period last year.
Salzman said he doesn't expect trends to change anytime soon. Not only will inventory remain tight, but the demand for homes will continue to grow, especially as more people leave large metro areas in pursuit of a better quality of life in cities such as Colorado Springs, he said.
"People are looking at where's a nicer place to live," he said. "The (Springs') quality of life is getting really checked out by the public like we haven't seen before. And we come out as a winner. "