Denver’s hot real estate market is moving south, say Realtors from Douglas and El Paso counties. Denver-area buyers are increasingly researching homes farther south, thanks to high prices and a tighter real estate market there.
And the longer drive to work doesn’t deter them.
Buyers get more house for their money in northern El Paso County than they do closer to Denver, and the commute is reasonable, said Realtor Harry Salzman.
“We are about 20 to 30 percent less expensive, including property taxes, public utilities and [sales] taxes,” than the Denver and Castle Rock markets, he said. “If you put all that together, it’s absolutely a lower cost of living.”
Some are also happier with the Monument area’s School District 38 than schools in the southern areas of Denver, he added.
“That means an awful lot if you’re a family with kids,” Salzman said. “Sure they’re going to get more snow in Monument, but the trade-off is a lower cost of living.”
It makes financial sense
Castle Rock Realtor Jim Garcia agreed, saying he has sold eight to 10 homes in the Monument and Larkspur area to people who commute to Denver for work.
It makes financial sense, he said. He cited, as an example, a person who bought a home in Douglas County three years ago for $250,000 with little money down on a 6.5 percent loan. Under those conditions, the buyer is required to purchase mortgage insurance.
Because property values have increased and the inventory of homes is low up north, that home is now worth $350,000, Garcia said.
In the example, the homeowner sells her home and takes the extra $100,000 to make a down payment on a home in El Paso County. Because she put down more than 20 percent of the home’s cost, she no longer is required to buy mortgage insurance, the interest rates have decreased from 6.5 to 4 percent and she will pay a fraction of Douglas County’s property taxes, Garcia said.
“So for the same payment, they’re getting a significantly better house by selling their house in Douglas County and buying a house in El Paso County,” he said.
That holds true for subdivisions a little farther south.
“We’re seeing a lot more buyers from south Denver and Castle Rock,” said Doug Stimple, CEO of Classic Homes, which developed Promontory Pointe, North Fork and Flying Horse in northern Colorado Springs. “What you can buy for $400,000 is significantly nicer than what you can find in south Denver or Castle Rock.”
Stimple began seeing buyers from the Denver-area around a year ago.
“Some is due to the price differential, and some to availability,” he said. “We have nice schools here, nice products on the north side. It merits consideration if you’re in the housing market in southern Denver or Castle Rock.”
Palmer Lake’s quick sales
Palmer Lake’s Main Street Brokers owner and Realtor Trish Flake is beginning to see properties “fly off the shelves,” she said.
One Palmer Lake property was listed on a Tuesday at 4:30 p.m. Flake had 14 showings that night that resulted in four offers, “and the property sold for $19,000 more than list price on Wednesday,” Flake said.
Of the four offers, “They were all Denver agents or Denver buyers.”
The average number of days a home is listed on the market has decreased, Salzman said. In Denver, the average is now 16 days.
“If you see a house, you better make a decision now, or it’s going to someone else,” he said.
According to the Pikes Peak Association of Realtors, the average number of days a home in this region was listed before sale was 70 days in September, down from an annual high of 110 days in January.
Now, one of three homes on the market in Palmer Lake sold before they were able to be listed in the Multiple Listing Service (MLS), Flake said.
“We already had buyers for them. It’s wild,” Flake said.
Inventory is also low. Typically 40 to 45 properties are available at any given time in Palmer Lake, but in the past year, that number has wavered between just seven and nine, she added.
One buyer “couldn’t find anything from here to Denver and they were tired of getting out-bid. They came to the Tri-Lakes area to get out of the rat race as far as the housing market goes,” Flake said. “A significant number of buyers are commuters to Denver.”
Realtors: Buy here, buy now
Colorado Springs will be the “next big boom, within 18-24 months,” said Mitch Bevans, Realtor with Re/Max Alliance in Castle Rock.
“If people can buy in the north area, Woodmen and Powers, prices are going to increase.
“Get in now, while the getting is good.”
“It’s better to buy a house today, no matter where, because of the appreciation. Today, a house as an investment outperforms the New York Stock Exchange, mutual funds, the Treasury,” Salzman said. “Absolutely the best investment an individual can have today is to buy a house.
“The Dow Jones is off [1.12 percent] this year, and the median sales price on housing nationwide is averaging [3.3] percent conservatively,” Salzman said.
Median sales prices have also shown a mild but steady upward trend in the region, from $213,000 in September 2013 to $240,000 in September this year.
In the Northgate area of Colorado Springs, the median price of a home was $352,000 in January. That compares with $370,500 in October for the same north area, according to the Pikes Peak Realtors Services Corp.
The number of single family or patio homes sold in the Pikes Peak region year-to-date as of September has also shown a steady increase since 2011, according to the Pikes Peak Association of Realtors. In 2011, 5,734 properties sold, compared with 6,136 in 2012, 7,641 in 2013 and 7,545 in 2014. This year, 9,034 homes sold.
A buyer’s and seller’s market
Higher-priced homes stay on the market longer than homes selling for less than $450,000, said Darrell Wass, Realtor with Re/Max Advantage in Colorado Springs.
“Everything up to $450,000 is a seller’s market, and over $450,000 is a buyer’s market,” Wass said. “We’ve definitely seen a lot of Monument listings shown by Denver agents.”
In the past year, Wass sold three homes in El Paso County to Denver commuters. He sold one recently, a home with a half-acre for $350,000, to a couple, both of whom work in downtown Denver. They purchased in Woodmoor “because they get more house for their money.”