You’ve heard the phrase “you get what you pay for,” and not so many years ago that described the housing market in Colorado Springs. Just 20, 25 years ago, the cost of living in this beautiful place was more than manageable... it was reasonable. People in most income brackets could find a place to live — you could buy a two-bedroom condo (with a fireplace and views!) for $77,000 — without spending a nightmarish portion of their monthly income on rent or the mortgage.
Here in 2022, Colorado Springs still enjoys endless sunny days, a beautiful backdrop of rugged mountains and a growing list of amenities that contribute to our quality of life. But due to the area’s cost of living, which is rising as quickly as its population, the middle-class and lower-earning demographics are no longer getting what they pay for. They’re being priced right out of the market, especially when it comes to single-family home rentals. And if they can find a place, they’re often paying unreasonable amounts of money to live in homes that, considering their age, condition and decades of deferred elbow grease, are simply not worth the money, regardless of market forces that say they are.
The Business Journal reported in June: “Local Realtors warn of an increased presence of national corporations in Colorado Springs’ home-buying market, which they say has had a noticeable impact on the rising price and limited inventory of single-family homes available for purchase in the area.”
Also from that article: “When even one home is sold at thousands of dollars over the list price, it causes a cycle of heightened prices for others, said Rob Thompson, an associate broker with The Agency, a Springs-based real estate firm, who frequently collects and analyzes assessor records and data from PPAR’s Multiple Listing Service....
“He noted one recent example of a purchase by Home Partners of America, a national company that operates a ‘rent to own’ model, in which HPA paid $81,000 over the list price for a home in the Banning Lewis Ranch neighborhood, according to records from the El Paso County Assessor’s Office.
“The next agent to come along has an ethical and legal obligation to their client, the seller, to use that as a comparable,” Thompson told the Business Journal. “So now within the span of two months, you’ve bumped that subdivision to $100,000 or above list price.”
Ultimately, these corporations, or “investors,” capture a big enough chunk of the housing market to allow them to control rents and drive costs higher, severely limiting the ability for middle-class and lower-earning families to rent or purchase a home. When housing becomes even less affordable along the Front Range, where will the teachers live? Or the police officers? Or the EMTs? Or any household making less than six figures? We will become a city inhabited by only the very rich and the house poor.
Some city’s are wising up, though, and working to protect their residents and local markets: “With a booming economy and major corporations increasingly locating operations in his city, Atlanta Mayor Andre Dickens said that he wants the government to find ways to place restrictions on property investors who are contributing to a surge in the region’s home prices,” Bloomberg reported last month. “Dickens, a former city council member who took over as mayor in January, said that he envisions something similar to the Community Reinvestment Act — a federal law designed to encourage banks to meet the needs of all borrowers — to prevent Atlanta communities from being overtaken by deep-pocketed real estate investors.”
According to Redfin data, the median Atlanta home price jumped 14 percent in April from a year earlier to $426,250.
And according to last month’s Pikes Peak Association of Realtors data, home prices increased each month in 2022 before hitting a record-high in April with a median price of $485,450 for a single-family home.
Maybe local legislators have something to learn from Atlanta...
The secret got out and the bargain that was Colorado Springs is no more. To put a spin on the phrase: If you want to rent or own at the foot of America’s Mountain, you’ll be paying for what you get... and then some.