Apr 9, 2021 | NEWS | By Will Funk | Photo by Patil Khakhamian
According to the Pikes Peak Association of Realtors, average housing prices in Colorado Springs jumped from $454,899 in February to $472,000 in March, approximately $81,000 more than the average housing price from March of last year.
Although average sales prices are known to be more readily impacted by outlying sales, the statistic nonetheless indicates significant shifts in housing costs in Colorado Springs. Median sales prices, a more reliable indicator of changing prices, have similarly jumped nearly $58,000 in the same time frame.
This rapid increase in housing costs can be potentially explained by the discrepancy in available housing versus demand for housing. As more people flee densely populated metropolitan areas for the backyards and open spaces that make Colorado Springs so desirable, the infrastructure needed to support the influx of former urbanites simply does not exist.
The Association of Realtors indicate that March saw merely 487 single-family homes on the market, not nearly enough to keep up with the growing monthly pace of demand created by low mortgage rates and desirability.
Despite more than 200 more houses under contract in March of 2021 as compared with March 2020, the rising cost of construction materials has also contributed to the increase in single-family home sale prices.
Additionally, the issue of supply and demand has created an abundance of bidding competitions, which balloon prices well above their original listings. Yet, despite the strong seller’s market, a general lack of housing elsewhere has forced potential sellers to reconsider, as the increased profit can do nothing to secure another single-family home.
This increase in prices above market value also work to price out low-income inhabitants faced with an increasingly drastic shortage of affordable housing.
A report by Nationwide Insurance from September of last year ranked Colorado Springs as one of the least affordable housing markets in the U.S. According to the U.S. Census Bureau, median household income for 2019 totaled less than $40,000 for the year.
This population, which sustains the service and tourist industries in the city, totals nearly 50% of the city’s population and will inevitably be priced out by such housing increases if the cost of living continues to rise.
“If Colorado Springs is going to continue with any forward momentum, we need to address not just an affordable housing need, but an affordable housing crisis,” Teddy Weiss, the Director of Communications for Together Colorado Springs said.
According to Bell Policy study, the affordable housing crisis is at a critical juncture since COVID-19 has faced 181,000 Colorado households with risk of eviction once Governor Polis’ eviction moratorium ceases on May 30 of this year.
According to Weiss, the federal government has offered $120 million to the state of Colorado in order to stem the oncoming tide of evictions and fund affordable housing by providing Coloradans with up to $2,000. Without the infrastructure to house inhabitants, however, the grant money may not achieve much.
Weiss indicates that “we have an estimated shortage of up to 26,000 units of affordable housing in Colorado Springs, which is shocking.” Even with the state and local resources set aside for the housing crisis, “there is no active campaign to get the resources that the city, the state and the county have into the hands of Colorado Springs residents.”
Weiss points to cooperation between state and local officials, city utilities, contractors, policy-makers and non-profits to create innovative solutions for getting resources properly allocated to both cover renters facing eviction and produce more affordable housing for the growing city population. These innovative solutions could take the form of inclusionary zoning, accessory dwelling units or affordable housing funds.
The re-election of Richard Skorman for city council on April 6 holds the potential to aid in the implementation of such innovative affordable housing policy strategies.
In a recent interview with KOAA, Skorman indicated that his top priority for the sustainable growth of the city is “affordable and attainable housing” by being “more proactive in regional planning, to not facilitate urban level development in the county and the city that financially burdens existing city residents.”
Until Colorado Springs is able to construct more affordable housing, housing prices will continue to price out the lower income population financially exacerbated by the COVID-19 pandemic. Not only will it be harder for low-income families to secure stable and affordable housing, but so too will college students find it more difficult to secure off-campus housing while on a budget.
In order to get federal funding properly distributed and help correct the income inequality posed by a lack of affordable housing, Weiss posits that: “You just have to walk the walk, you can’t just talk it.”
Government allocations for COVID-19 housing relief funds can be found here.