Five key highlights from this report:
- A new report ranked Colorado Springs as the hottest housing market in America.
- Home-buyer demand remains strong in Colorado Springs, despite COVID-19.
- Housing supply, meanwhile, remains tight across this metro area.
- Home prices in this market might actually hold up, through 2020.
- One forecast for Colorado Springs predicted prices would flatten but not decline.
Is Colorado Springs truly the hottest housing market in America, among major metro areas? That depends on what you mean by “hot,” and which metrics you use to measure it. We’re not talking about an exact science here.
But that didn’t stop the folks at Realtor.com from naming Colorado Springs the hottest housing market in America, for the month of April 2020.
Colorado Springs Named Hottest Housing Market: April 2020
Last week, the real estate research team at Realtor.com updated its list of the hottest markets in the U.S. To determine these rankings, researchers looked at a variety of factors relating to housing supply and demand. They then ranked the nation’s major metros based on the “hotness” of their housing markets.
(Again, not an exact science. But let’s play along.)
In a May 14 report, Realtor.com’s research team wrote the following:
“In April, Colorado Springs, CO retained the title of hottest housing market in the country for the third consecutive month. Originally garnering attention as a spillover market from Denver, this metro has frequently appeared on our list of hottest housing markets, and this represents the fourth time on record that it has reached number one.”
One factor they considered when ranking these metros is the speed with which homes are selling (measured by median number of days on market). They also took into account the number of property views each metro gets, through the Realtor.com website. The Colorado Springs real estate market performed well in both areas.
In April 2020, homes listed for sale in Colorado Springs sold in less than 32 days, on average. That was 31 days faster than the national average for the same time period. So we’re talking about a real estate market with strong demand from buyers, where properties tend to sell quickly.
It’s worth noting that the coronavirus (COVID-19) outbreak was well established in the U.S. during the month of April. So this latest report gives us some insight into how the Colorado Springs real estate market is performing during the COVID pandemic. And it’s doing fairly well, compared to some other parts of the country.
One Forecast Suggests Home Prices Will ‘Flatline’ Later this Year
Like most cities across the country, Colorado Springs has experienced a decline in home sales over the past few weeks. That stems from the public-health crisis and resulting stay-at-home orders, which have caused some buyers and sellers to shy away from the market.
As a result, home prices in this housing market will likely cool off over the coming months. The same could be said for most U.S. cities, as of May 2020.
But one recent forecast for the Colorado Springs real estate market predicted that home prices will only level off over the next year — as opposed to dropping. That prediction came from the economists and analysts at Zillow.
In mid-May, the research team at Zillow wrote:
“Colorado Springs home values have gone up 7.6% over the past year and Zillow predicts they will fall -0.0% within the next year.”
This particular forecast stretches into May of 2021. As of May 2020, the median home value in this market was around $325,000.
Zillow’s analysts also labeled the Colorado Springs housing market as being “very hot” in early May 2020, which means the current supply-and-demand situation tends to favor sellers over buyers. Of course, that could change as the COVID-19 situation drags on.
Key Factors: Growing Population and Limited Inventory
There are two main reason why the Colorado Springs housing market has outperformed most U.S. cities over the past year. Supply and demand.
Population growth and limited housing stock have put upward pressure on home prices. Those trends could help sustain house values through the current economic downturn of 2020.
On the supply side, the Colorado Springs housing market is experiencing a serious inventory shortage. According to the Pikes Peak Association of REALTORS, the local area had only a 1.3-month supply of homes for sale in April 2020. That’s well below what is considered to be balanced.
On the demand side, the Colorado Springs real estate market is getting a boost from steady population growth. According to the U.S. Census Bureau, the city’s population grew by 13.2% from 2010 to 2018. The population of El Paso County grew by 14.7% during that same eight-year period. By comparison, the nation as a whole grew by 6% from 2010 to 2018.
Disclaimer: This article contains real estate forecasts for Colorado Springs through 2020 and into 2021. Those predictions were issued by third parties not associated with the publisher. Housing forecasts are the equivalent of an educated guess and should be treated as such.