Buying real estate in Colorado Springs can be a worthy investment opportunity. If you are looking at investing in the Colorado Springs real estate in 2020, you must read till the end. Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment. The Colorado Springs real estate market looks poised for steady price growth in 2020.
The Colorado Springs real estate market gets overlooked in favor of bigger markets like Denver. However, Colorado Springs has a number of things in its favor for residents and real estate investors alike. Colorado Springs sits on the eastern side of the Rocky Mountains. Colorado Springs contains nearly half a million people. The Colorado Springs metropolitan area is home to around seven hundred thousand people.
The Colorado Springs area is seeing continual, rather fast growth. Colorado Springs real estate has continued to appreciate in value faster than most of the markets in the US. Conditions in the Colorado Springs real estate market seem to be in a sustainable, upward direction and show no signs of slowing down. Inventory is low and prices are increasing at a steady pace. The local economy is strong and mortgage rates remain low.
Is Colorado Springs going to be a sizzling real estate market for investors in 2020? Colorado Springs real estate appreciation rate in the latest quarter was around 2.25%. However, it is quite unclear whether it would remain steady or not. Looking at the positive forecast, the annual appreciation rate is predicted to be between 9% to 10%. You can either choose to invest in your future, or market your home to potential buyers. In this article, our focus will be on the current state of the Colorado Springs real estate market and how it can affect the investors and home buyers.
Colorado Springs Real Estate Market Forecast 2020 – 2021
What are the Colorado Springs real estate market predictions for 2020? Let us look at the price trends recorded by Zillow over the past few years. It has a track record of being one of the best long term real estate investments in the U.S. Since 2015, the median home prices in Colorado Springs have appreciated by roughly 44.5% from $219,000 to $316,396, according to Zillow’s index.
In the past year, the Colorado Springs real estate prices have risen by 6.3%. The latest Colorado Springs real estate market forecast is that the home prices will continue to increase by 5% in the next twelve months. The latest real estate data from Zillow shows that the current median home value in Colorado Springs is $316,396. Colorado Springs is currently a seller’s real estate market – indicating that there are more real estate buyers in the market than there are sellers. When demand is higher than the supply, home prices increase, which benefits sellers. This is what is happening in Colorado Springs.
Here is the Colorado Springs real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 5% till Jan 2021.
The median list price per square foot in Colorado Springs is $660, which is higher than the New York-Newark-Jersey City Metro average of $270. Zillow reports that 9.4% of the listings in Colorado Springs had a price cut in Jan 2020, which is a good thing for buyers. The median price of current listings in Colorado Springs is $349,000 and the median price of homes that have been sold is $311,800. The median rent price in Colorado Springs is $1,640, which is lower than the Colorado Springs Metro median of $1,650.
Colorado Springs Housing Market Forecast 2021
The Colorado Springs housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The accuracy of the Colorado Springs housing market trend prediction is 75%. Accordingly, LittleBigHomes.com estimates that the probability for rising home prices in Colorado Springs, CO is 75% during this period. If this Housing Market Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Colorado Springs Housing Market Forecast.
Latest Colorado Springs Real Estate Market Trends
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. We shall now discuss some of the most recent housing trends in the Colorado Springs area from multiple sources and compare it with past couple of years. We shall mainly discuss about median home prices, inventory, economy, growth and neighborhoods, which will help you understand the way the local real estate market moves in this region.
Colorado Springs is a minimally walkable city in with a population of approximately 415,281 people. There is a high demand and low inventory in the Colorado Springs real estate market, just not as extreme as earlier in the year 2019. Housing prices in Colorado Springs are still increasing because of this effect of supply and demand. Due to huge demand in housing, the Colorado Springs was one of the nation’s top housing markets in 2019— ranking No. 5 out of 300 metro areas in Realtor.com’s monthly (Jan 2019) hotness index. Realtor.com’s index was based on the number of online views received by homes for sale in each market, which indicates demand.
On average, homes in Colorado Springs, CO sell after 50 days on the market. The trend for median days on market in Colorado Springs, CO has gone up since last month, and slightly down since last year. In a healthy, balanced market, it would take about six months for the supply to dwindle to zero. In terms of months of supply, the Colorado Springs market can tip to favor buyers if the supply increases to more than six months of inventory. As per Zillow’s forecast, the prices may rise by 5% in the next 12 months. That means that supply would remain short, and buyers will continue to compete and enter into bidding wars.
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units. With 2020 being, theoretically, in the middle of a boom, there’s still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
According to Neighborhoodscout.com, a real estate data provider, the current median house price in Colorado Springs is $309,935, which indicates that home prices in Colorado Springs are well above the national average for all cities and towns in the United States. Three and four bedroom single-family detached homes are the most common housing units in Colorado Springs. Other types of housing that are prevalent in Colorado Springs include large apartment complexes, duplexes, row houses and homes converted to apartments.
Here is a snapshot that shows the median home values in the some of the popular neighborhoods of Colorado Springs.
Colorado Springs Real Estate Inventory And Sales Data
Colorado Springs has a mixture of owners and renters, with 57.72% owning and 42.28% renting. In the past month, 755 homes have been sold in Colorado Springs on Redfin.com, a national real estate brokerage. Additionally, there were also 78 condos, 236 townhouses, and 26 multi-family units for sale in Colorado Springs last month. The median listing price is around $375,000. The average sale price of a home in Colorado Springs was $325,000 in the last month, up 10.2% since last year. The average sale price per square foot is $154, up 8.5% since last year.
According their statistics, Colorado Springs housing market is very competitive. Homes in Colorado Springs receive 1 offers on average and sell in around 32 days. A hot listing in the market can sell for about 2% above list price and go pending in around 7 days.
Currently, there are 1204 homes for sale in Colorado Springs on Zillow, an online real estate database company. Additionally, there are 288 homes for rent. Under potential listings, there are about 0 Foreclosed and 193 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
Trulia has 1631 resale and new homes for sale in Colorado Springs, CO, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The median sale price in Colorado Springs is $307,000 and homes are selling for about $207/sqft.
As you can see in the graph, there was a steep increase in Colorado Springs home prices from Jan 2019 to July 2019.
There are currently 2060 homes for sale and 679 homes for rent in Colorado Springs on Realtor.com, a real estate listings website. According to their statistics, in January 2020, the Colorado Springs housing market was a seller’s market, which means there were roughly more buyers than there were active homes for sale. In January 2020, the median list price of homes in Colorado Springs, CO was $348.5K, trending up 8% year-over-year. The median listing price per square foot was $153 and the median sale price was $320K.
The asking price of single family homes can start from $99,000 and can go up to $8M for a luxury property located in Broadmoor neighborhood. Broadmoor is an expensive neighborhood in Colorado Springs with the median price of $459,000. Flying Horse Ranch has a median listing price of $649,900, making it the most expensive neighborhood in Colorado Springs. Park Hill is the most affordable neighborhood, with a median listing price of $229,000.
| Homes For Sale | 2060 |
| Homes For Rent | 679 |
| Median Listing Price | $348,500 |
| Median Sale Price | $320,000 |
| Sale to Asking Price Ratio | 100% (Jan 2020) |
| Median Rent | $1,690 |
| New Listings | 337 |
| New Constructions | 711 |
| Median Listing Home Price/Sq Ft | $153 |
| Home Price Range | $29.9K to $11.2M |
| Most Expensive Neighborhood | Flying Horse Ranch |
| Most Affordable Neighborhood | Park Hill |
Ideally a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Colorado Springs have managed to hold good leverage in these negotiations in the past month. On an average, they could sell homes for 100% of the asking price. A seller would always prefer scenarios which can yield a ratio of 100% or higher.
Colorado Springs, CO Foreclosures And Bank Owned Homes Statistics 2020
As per Zillow’s data, in Colorado Springs 0.1 homes are foreclosed (per 10,000). This is the same as the Colorado Springs Metro value of 0.1 and also lower than the national value of 1.2. The percent of delinquent mortgages in Colorado Springs is 0.5%, which is lower than the national value of 1.1%. The percent of Colorado Springs homeowners underwater on their mortgage is 5.7%, which is lower than Colorado Springs Metro at 5.9%.
| No. of Foreclosures in Colorado Springs | 447 (RealtyTrac) |
| Homes for Sale in Colorado Springs | 813 |
| Recently Sold | 7386 |
| Median List Price | $309,900 (0% rise vs Dec 2018) |
There are currently 447 properties in Colorado Springs, CO that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 813. In January, the number of properties that received a foreclosure filing in Colorado Springs, CO was 14% lower than the previous month and 7% lower than the same time last year.
In Colorado Springs, the zip code with the highest foreclosure rate is 80928, where 1 in every 251 housing units is foreclosed. 80922 zip code has the lowest foreclosure rate, where 1 in every 2489 housing units becomes delinquent.
Is Colorado Springs a Good Place For Real Estate Investment?
Now that you know where Colorado Springs is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Is Colorado Springs a Good Place For Real Estate Investment? Many real estate investors have asked themselves if buying a property in Colorado Springs is good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2020.
If you are looking to make a profit, you don’t want to buy the most expensive property on the Colorado Springs real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Colorado Springs that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.
Let’s take a look at the number of positive things going on in the Colorado Springs real estate market which can help investors who are keen to buy an investment property in this city.
1. Colorado Springs is a Large Student Market
Many people know that the Air Force Academy is located in Colorado Springs. However, the student market in Colorado Springs is both larger and more diversified than the military student population. The University of Colorado Springs hosts over twelve thousand students. Colorado College, Colorado Technical College, Remington College, Colorado Christian University and the University of the Rockies are also located here. This provides a large, diverse student market that rents properties across the Colorado Springs real estate market.
2. Colorado Springs Rental Market
U.S. News and World Report magazine discusses the large retiree community in Colorado Springs. The area’s abundant recreational opportunities and proximity to military services like commissaries and VA facilities explain why more than 10% of the population is retired – many of them military veterans and their families. Peterson Air Force Base sits on the eastern edge of town.
For Airbnb attractability and business building, there are two huge military bases with Air Force, Naval Academy. Fort Carson, an Army base, is located within the city limits. The infamous Cheyenne Mountain is located just to the west of town. A side benefit of this diverse military market is that the Colorado Springs real estate market enjoys a large, permanent population of renters but without the wild swings that come with the rise and fall of a single military base’s fortunes.
3. The Tourist Market & Airbnb Friendly City
A city that’s within a stone’s throw of Pike’s Peak and the rest of the Rocky Mountains is going to attract tourists. Garden of the Gods is a very famous public park located in Colorado Springs. It was designated a National Natural Landmark in 1971. It features stunning geological formations, rock climbing, nature trails and the Garden of the Gods Visitor & Nature Center. Another major attraction is the US Olympic Training Center, located in Colorado Springs. Colorado Springs allows properties to be rent out on a short-term basis, but you must have a short-term rental permit and collect the appropriate taxes.
Colorado Springs’ regulations on short-term rentals are not as stringent, though, as those in nearby “tourist” towns like Breckenridge. Colorado Springs is a very Airbnb friendly city. You can convert your property into an Airbnb vacation rental and rent it out to vacationers and tourists on a short term rental basis. Owning a house near the Gardens of the Gods Park can prove to be a goldmine in building up your Airbnb rental business. For setting up an Airbnb business, there are lots of outdoors attractions, 3 hospitals, the Broadmoor hotel (historic hotel on a lake), 2 cute downtown streets with restaurants (downtown and colorado city), 90mins from Denver, and 2 hours from skiing in Breckenridge.
Their airport offers direct flights to many cities via Frontier & United. You can also co-host clients in Colorado Springs through profit sharing with landlords. You can charge landlords a start up fee and 20% commission for co-hosting (finding clients and getting the property Airbnb ready). The controversial Airbnb ordinance was passed in November 2018 by the Colorado Springs City Council. Under the ordinance, property owners must apply for a license, pay taxes and obey neighborhood rules. This came into effect on January 1st, 2019.
4. Strong Job Growth in Colorado Springs
The Colorado Springs area boasted an unemployment rate of around 3% in 2018, more than a full percentage point less than the national average. People move here for work and the lower cost of living compared to more expensive Front Range cities. Industry sectors hiring people include hospitality and professional and technical services. The latter category is driven by defense contractors in the area.
5. Demographic Momentum
Despite the very large population over the age of 65, Colorado Springs managed to have a median age of 34, several years below the national average. The tight labor market is drawing people to the area and keeping college graduates in the vicinity. This guarantees demographic momentum as young people stay here to buy homes and raise their own families, fueling demand for the Colorado Springs real estate market.
6. The Affordable Real Estate Market
The Colorado Springs real estate market is notable for how affordable it is compared to many other cities in the Rockies. The median home price is around $260,000, and the median rent is roughly a thousand a month. That is about 10% higher than the national average, but the average price of a home in Denver passed half a million dollars in 2018. In short, you can buy two homes in Colorado Springs for the price of one in Denver. The double digit price gains in Denver will push people to Colorado Springs, as well, since relatively few earn the $90,000 a year income needed to afford the average Denver home.
7. The Intersection of Technology and Affordability
Colorado prides itself on cultivating high tech jobs like California without the over-crowding or insane housing prices. Yet this has made the Denver housing market unaffordable for many people who work there. One solution for many is living in Colorado Springs and commuting an hour or more each way to work. Another solution that’s more readily available in Colorado than elsewhere is telecommuting.
Realtors in the Colorado Springs housing market are finding people buying houses even on the south side so they can find a property they can afford, then driving in one or two days a week to Denver. Conversely, the high price of property in Denver is driving many businesses to move or expand south into the Front Range, bringing Denver’s jobs closer to the Colorado Springs housing market.
8. The Landlord Friendly Market Compared to the Rest of the West
Colorado is almost as landlord friendly as Arizona and Texas, but it is far more landlord friendly than Nebraska, Kansas, or any West Coast state. Colorado allows you to quickly evict tenants who don’t pay their rent. Once you give them a demand for compliance, they have 72 hours to either pay up or move out. If that 3 day period expires and you go to court, the courts typically side with the landlord. After that ruling, the tenants have 48 hours to leave, and then local law enforcement will enforce the eviction order. Another major point in its favor is that you’re not required to get tenants 24-hour notice before you visit the property.
9. Near Guaranteed Property Appreciation
Population growth in Colorado Springs has been just ahead of new home construction; housing permits in the Colorado Springs real estate market, for example, are not yet back at 2005 levels. This helps to explain why home prices have risen more than 40% in the past five years, though it is one of the most active housing markets in the country. This is partially due to the fact that Millennials are the biggest group buying houses today, and the Colorado Springs real estate market is already loaded with them.
Millennials prioritize homes in walkable areas with access to public transit, but they value practical, usable homes over size. This means well-designed condos and duplexes in the right areas are as attractive to them as a large house in the suburbs. However, the limited supply of homes on the market in Colorado Springs is keeping prices increasing faster than the rate of inflation. Ironically, the near total lack of homes with negative equity in the Colorado Springs housing market has been considered one reason why prices are going up so fast.
10. The Low Property Taxes
Colorado has some of the lowest property taxes in the nation. The effective property tax rate residents pay is 0.57% per year, the sixth lowest out of the fifty U.S. states. For comparison, the national average property tax bill is around 1.2%.
Investing in Colorado Springs Real Estate: Advice For Beginners
Maybe you have done a bit of real estate investing in Colorado Springs but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. The Colorado Springs real estate market contains several large populations of renters, many practical reasons for people to move here from the surrounding area and across the country, and long-term factors that will drive growth for years to come. Forget the Mile High City and invest in the Colorado Springs real estate market.
A good cash flow from Colorado Springs investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Colorado Springs real estate investment opportunity would be a key to your success. If you invest wisely in the Colorado Springs real estate, you could secure your future.
The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Colorado Springs investment real estate and you should be able flip it for a lump sum profit.
The neighborhoods in Colorado Springs must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools and shopping malls. Some of the popular neighborhoods in Colorado Springs are Broadmoor, Old Farm, Colorado Centre, Kissing Camels, Downtown Colorado Springs, Falcon Heights, Cordera, Wolf Ranch, Rockrimmon, Old Colorado City, Fountain Valley, Old North End, Pikes Peak Park, Briargate and Flying Horse Ranch.
As with any real estate purchase, act wisely. Evaluate the specifics of the Colorado Springs housing market at the time you intend to purchase. Hiring a local property management company can help in finding tenants for your investment property in Colorado Springs. If it is your first time to invest in Colorado Springs real estate, then you would have to be aware of common beginner’s mistakes. Beginners would usually follow the media, buy a property and wait for its value to increase. This could be risky. Real estate investing requires research. We recommend doing your own research or hiring a real estate investment specialist for guidance.
Other Good Markets To Invest in Real Estate in 2020
Apart from the Colorado Springs housing market, you can also invest in Charleston, SC. The Charleston housing market is certainly benefiting from a local economy that has gained worldwide attention. The Charleston SC real estate market contains multiple, sizable renting populations aside from a growing workforce that cannot afford to buy local single family homes.
The strong job market and relatively limited space is driving up rents and home values. According to report published on Charlestonrealestate.com, the feeling is that the Charleston real estate market will have an adequate demand for housing in 2020. However, increased inventory and lower buying power will result in lower sale prices and signify a buyer’s market. A buyer’s market indicates that buyers have greater control over the price point.
Another market that we suggest is the housing market in Raleigh, NC. The Raleigh housing market is landlord friendly, contains several large populations of renters, and an economic future that ensures long-term growth in housing demand and rents. Owning a piece of Raleigh real estate is a great achievement for many people. Homeowners in Raleigh continue to see their homes appreciate in value because they are in such high demand.
From Millennials moving to the area to retirees living here, Raleigh continues to be a great place for people from from all walks of life. Whether you are a Baby Boomer or a Millennial, you will find living in Raleigh is a unique experience. From being a leader in the job market to being a hub for entertainment, it’s pretty clear why many people love to call Raleigh home.
Let Us Help You In Buying Your First Investment Property In U.S. Growth Markets
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability. Consult with one of investment counselors who can help build you a custom portfolio of turnkey cash flow rental properties in the various growth markets across the United States.
All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching top real estate growth markets and structuring complete turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
*Remember, caveat emptor still applies when buying a property anywhere. The aim of this article was to educate investors who are keen to invest in Colorado Springs real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References:
- Job Market
https://realestate.usnews.com/places/colorado/colorado-springs
https://gazette.com/business/colorado-springs-unemployment-rate-jumps-to-percent/article_2fd1be86-abc9-11e8-8f93-5727ea92f84c.html - Affordable real estate
https://realestate.usnews.com/places/colorado/colorado-springs
https://www.denverpost.com/2018/03/05/metro-denver-average-home-price/ - Student Market
https://en.wikipedia.org/wiki/Colorado_Springs,_Colorado
https://www.uccs.edu - Airbnb
https://www.zeonamcintyre.com/blog/2018/1/26/airbnb-investing-trip-colorado-springs-edition
https://www.krdo.com/news/top-stories/airbnb-ordinance-passes-2nd-vote-by-colorado-springs-city-council/862178044 - Tourism Market
https://www.avalara.com/mylodgetax/en/blog/2018/10/colorado-springs-passes-new-airbnb-rules.html - Military market
https://www.military.com/base-guide/colorado-springs-military-bases - Landlord friendly
https://www.rentcafe.com/blog/renting/states-best-worst-laws-renters
https://morrisinvest.com/blog/2016/12/21/5-most-landlord-friendly-states
http://www.landlordstation.com/blog/top-landlord-friendly-states - Technology and affordability intersection
http://www.cpr.org/news/story/move-over-denver-colorado-springs-might-have-the-hottest-housing-market
https://www.daveramsey.com/blog/real-estate-trends - Low property taxes
https://denver.cbslocal.com/2018/02/27/colorado-low-property-taxes
https://www.investopedia.com/walkthrough/guide-buying-house-us/property-tax-assessment-state/western-region-property-taxes/colorado-property-tax-guide - Foreclosures
https://www.realtytrac.com/statsandtrends/foreclosuretrends/co/el-paso-county/colorado-springs/ - Housing Market Data, Trends & Statistics
https://www.zillow.com/ColoradoSprings-co/home-values
https://www.realtor.com/local/Colorado-Springs_CO
https://www.realtor.com/realestateandhomes-search/Colorado-Springs_CO/overview
https://www.redfin.com/city/4147/CO/Colorado-Springs/housing-market
https://gazette.com/business/more-homes-for-sale-as-colorado-springs-housing-market-changes/article_3dc93e30-c670-11e8-96a1-631c9bcd525a.html
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