The Colorado Springs real estate market has seen its median home values increase at a rate faster than the national average.
Real estate in Colorado Springs is currently suffering from an inventory shortage, much like the rest of the country.
Colorado Springs real estate investing appears best suited for buy and hold investors who can offset today’s high prices with proportionately high rents.
The Colorado Springs real estate market is at the forefront of a national housing industry that has made a lot of progress in a short period of time. In other words, while the national real estate scene has done very well for itself, real estate in Colorado has done even better. As a result, Colorado Springs recently made Realtor.com’s “March Top 20 Hottest Housing Markets” list. Due, in large part, to local demand, median listing prices and a vibrant liberal arts community that caters to millennial populations, Colorado Springs has become a popular destination for those seeking refuge from today’s most expensive primary cities. Meanwhile, local investors have become the beneficiaries of what can only be described as a “hot” market.
Colorado Springs Real Estate Market Overview
Median Home Value: $293,500
1-Year Appreciation Rate: 8.8%
Median Home Value (1-Year Forecast): 5.5%
Median Rent Price: $1,500
Median Days On Zillow: 58
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Median Home Price Colorado Springs
Homes in the Colorado Springs real estate market currently boast a median home value of $293,500, according to Zillow’s Home Value Index. However, today’s values don’t tell the whole story. In a relatively short period of time, inventory levels (or lack thereof) have caused prices to increase dramatically. No more than a year ago (April 2018), the median home value in Colorado Springs was about $271,000. Thanks primarily to the area’s supply and demand ratios, prices have jumped 8.8 percent in the last year. Median home values across the United States, on the other hand, increased 6.6 percent over the same period. What’s more, it looks as if the Colorado Springs real estate market will continue to outpace the national average for the foreseeable future. In the next year, median home values in Colorado Springs are expected to increase an additional 5.5 percent, whereas the national average may only see a 4.1 percent jump.
Colorado Springs Foreclosure Statistics
According to data provided by RealtyTrac, at least 472 homes in the Colorado Springs real estate market have been classified as distressed properties. While not all of them have actually undergone the foreclosure process, each one of them is either in default (or at risk of default), to be placed up for sale at auction, or bank owned. It is worth noting that the foreclosure rate in Colorado Springs housing market appears to be lowering, as the number of properties that received a foreclosure filing in March of 2019 was about 30 percent lower than the same time in 2018.
Colorado Springs real estate investors looking to buy distressed properties should focus the majority of their attention towards auctions. If for nothing else, real estate investing is a numbers game, and the overwhelming majority of distressed properties are up for auction (or are going to be at some point in the near future). In fact, 90.6 percent of the distressed homes identified by RealtyTrac are auction homes. The remaining distressed properties are primarily bank owned, meaning they were already up for auction and didn’t sell.
For a better idea of where to find distressed properties in the Colorado Springs real estate market, the following area codes represent the areas with the highest foreclosure rates:
80925: 1 in every 999 homes is currently distressed
80915: 1 in every 1,019 homes is currently distressed
80951: 1 in every 1,525 homes is currently distressed
80922: 1 in every 1,991 homes is currently distressed
80923: 1 in every 2,609 homes is currently distressed
Colorado Springs Real Estate Investing
While today’s higher prices aren’t necessarily conducive to traditional fix and flip strategies, they are well suited for another viable exit strategy: buy and hold rental property investing. Due to increased home values, it makes a lot more sense to buy a property with the intention of holding it for a while. That way, Colorado Springs real estate investors may be able to recoup some of the higher acquisition costs by renting the property. Not only that, but the median rent investors may be able to expect has reached $1,500, which should quickly help ease acquisition costs.
Colorado Springs Real Estate Market Summary
The Colorado Springs real estate market has become the beneficiary of increasing millennia demand, despite prices that have increased dramatically in as little as one year’s time. It is worth noting, however, that the same demand that is responsible for driving up home values is also responsible for making Colorado Springs an attractive market to invest in. Investors that are able to acquire properties stand to benefit from the area’s lack of inventory, as those who are looking to buy appear ready and willing to pay a premium.
Have you thought about investing in the Colorado Springs real estate market? If so, what are you waiting for? We would love to know your thoughts on real estate in Colorado Springs in the comments below.
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