Reasons To Live In Colorado Springs
Reasons to live in Colorado Springs. I was recently asked by two out of town buyers why we settled down in Colorado Springs. It was a very easy conversation. At the top of our list are the schools in Academy School District 20, the climate, our neighborhood (Pine Creek), our house (main level living) with an incredible view.
There are many reasons to live in Colorado Springs. Here is a quick summary of what is happening in 2018.
Businesses. With the tax cuts implemented at the end of 2017, businesses are more confident and starting to spend their profits. Bonuses and raises to employees, expansion, mergers, and new construction are improving the commercial side of real estate as well as adding to the Colorado Springs economy.
Economy. As the national economy improves with wages increasing and lending practices relaxing a bit, we are seeing more first time home buyers in the market. Renters are beginning to realize that to build their wealth, they need to own. Check out our Rent vs. Own analysis. Current homeowners are slow to move up or move down in fear of not finding a home that meets their needs.
Home sales. Home sales are at a national low, but mostly due to low inventory, this is driving prices up. This is no different for the Colorado Springs housing market. See our monthly Colorado Springs Real Estate Market Update for details. For the national market visit This Month in Real Estate.
Home Prices. In Colorado Springs are appreciating at a rate of 6-10% annually depending on the area.
Default rate. Colorado’s default rate is lower than the national average.
New construction – nationally at a 40 year low. The problem is that initially, builders struggled with getting financing for their projects after 2007. Today builders struggle with finding and keeping laborers. This is part of the reason for the seller’s market that started in 2016/2017.
Home price to income ratio. As prices increase, the home price to income ratio is changing making affordability more difficult. In February 2006, I attended the Keller Williams Family Reunion, and I remember very clearly that our founder, Gary Keller, stated that “the ratio is out of whack and needed a correction, so we could anticipate a bursting of the bubble with prices becoming more affordable for the typical buyer.” That is exactly what happened in late 2007. In February 2018 Gary Keller stated that with the increasing home prices affordability is impacted, but because appreciation is not as rapid as in 2006, so a major market correction is not expected – YET.
Rent. Rents are increasing in Colorado Springs at an alarming rate. A recent first time home buyer client stated that his small one bedroom apartment that cost $500 two years prior, was increasing to $1000. For an extra $200/month, he was able to buy a home and lock in his payments for 30 years with the only potential increase being HOA dues and property taxes. Renters who can buy, should conduct their own Rent vs. Own analysis or consider our Rent to Own program.
Mortgage Interest Deduction – has been in place for 100 years and continues to be a target of the politicians. The 2017 tax cut kept the mortgage interest deduction for most home owners.
By Nancy Murray
Murray & Associates, Keller Williams Colorado Springs