Colorado Springs has been nominated as one of the best places to live; however, it’s not as affordable as
it used to be. We have seen record-breaking prices in the real estate market, which is contributing to the
higher cost of living in our area. According to The Gazette, “The local cost of living was 103.6% of the
national average in the third quarter, up from 100.9% a year earlier and the highest level the quarterly
index has reached since mid-1997 (Council for Community and Economic Research)”. The cost of
living is the amount of money needed to cover basic expenses such as housing, food, taxes, and
healthcare in a certain place and time period. The cost of living index is used to compare how expensive
it is to live in one city versus another.
A good part of the increase is due to the rise in housing costs in our area. We are seeing double digit
increases in both median and average price of homes sold. Last month, the average price rose 16.3% and
the median price rose 14.5% (year over year). In fact, when looking at the real estate statistics, 6 out
of the last 10 months have seen double digit increases. Just 5 years ago, the average price was $263,584
and the median price was $234,900. Last month the average was $432,477 and the median price was
$383,447. As you can see, in just 5 years, the median and average prices have risen nearly $150,000!
Building materials have increased in price, and thus so has the price of new construction homes. High
demand and lack of inventory have also contributed to this unprecedented surge in prices.
Even still, did you know that you can still afford more house than ever before? This is due to
record low interest rates! If you’re planning to wait until next year or later, Mike Fratantoni, Chief
Economist at the Mortgage Bankers Association (MBA), forecasts mortgage rates will begin to
steadily rise, so waiting could cost you even more!
Our local inventory has been shrinking this year. We had the lowest inventory recorded last month, at
only a 0.51-month (or 16 day) supply of homes in the entire Pikes Peak Region. Looking at homes with
a Colorado Springs mailing address, there was only a 0.38-month or 11 day supply of homes! This tight
inventory continues to put pressure on price and has contributed to bidding wars and extremely short
time on market for listings. Purchaser demand is so high, the market is running out of available homes
for sale. Just last week, realtor.com reported:
“Since the beginning of the COVID pandemic in March, nearly 400,000 fewer homes have been listed compared to last year, leaving a gaping hole in the U.S. housing inventory.”
The low inventory is creating fierce competition among buyers and bidding wars for homes. When
demand is high and inventory is low, people will pay more. COVID-19 has not helped the situation, as
many people are reluctant to sell their home during this time. This leaves buyers with less homes to
choose from, and they are paying higher prices just to have an offer accepted.
In addition to rising home prices and low inventory, the overall population of our area has grown
substantially, and continues to grow every year! The population of El Paso County is around 720,403
people (according to Census.gov estimates for July 2019). This is a 15.8% increase in population since
the last official census in 2010. This increase in population is contributing to higher demand for homes,
less inventory, and subsequently, higher costs for housing.
According to US News & World Report, Colorado Springs was nominated as the #4 Best Place to
Live in 2020. This report is based on desirability, job market, quality of life, and more. Many people
choose to move to our city for better opportunities in employment and education. Colorado Springs’
natural beauty and outdoor activities also entice newcomers.
However, many of those migrating here from more expensive areas still see Colorado Springs as an
affordable alternative. Unfortunately, those with lower paying or less secure jobs may find the rising
costs problematic, and may even get priced out of the area entirely. The cost of living in most other
major cities far exceeds that of Colorado Springs, while our area still provides many of the same
Other costs play an effect on the overall cost of living. These costs include transportation, healthcare,
taxes, utilities, childcare, food, and more. According to The Gazette article, “Transportation and
utilities costs also played a role in pushing the overall index higher. The component measuring
transportation costs surged from 99.1% of the national average a year ago to 111.6% of the national
average in the third quarter, mostly because local gasoline prices fell just 5.1%, while the national
average declined 19.1% Utilities costs also rose from 98.7% to 102.8% of the national average during the
same period.” Rising prices of these goods can seriously affect the cost of living and affordability of our
The cost of living in Colorado Springs continues to rise each year, and it does not look like that will stop
any time soon. The longer you wait to move here or buy a home, the more you will end up paying. If
making Colorado Springs your home is your dream, let’s chat and try to make that happen! If you are
renting and ready to own a home of your own, let’s get you on the path to make homeownership a
reality! Remember, next year that same house will cost you even more. Even with the higher cost of
living, Colorado Springs remains one of the most amazing places to live!
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