Luczak Group - The Blog

Information for happenings in the Real Estate Market in the Pikes Peak Region... and some things we just find interesting!

Good times roll for commercial and residential real estate in Colorado Springs

It's good times for residential and commercial real estate in Colorado Springs; a healthy economy and an influx of people moving to the Pikes Peak region has created a demand for homes, apartments, stores, restaurants and the like.


Expect more of the same in 2018, as newcomers, employers and businesses are attracted by the area's quality of life, job growth and lower cost of living - at least, when compared with Denver.


That was the consensus of several speakers Thursday at the 27th annual real estate and economic forecast breakfast sponsored by the Southern Colorado chapter of the Institute of Real Estate Management. About 200 people attended the event at The Antlers hotel in downtown Colorado Springs.


But good times for the residential and commercial markets don't mean there aren't problems.

Even as homes sell at a blistering pace, the supply is so tight that some buyers can't find what they want. The commercial market finally is enjoying a recovery from the Great Recession, but the city needs more office, industrial and retail space to meet the demands of users.

Here's a look at what some of the speakers had to say about the year ahead in real estate and the overall Colorado Springs community:


- Single-family housing. Sales set another record in 2017 - up 7.2 percent over the previous year, a figure that included townhomes, condos and single-family homes, said Bruce Betts, broker/owner of Re/Max Advantage in Colorado Springs. But new listings rose only 3 percent, meaning supply can't keep pace with demand, he said., the online real estate service, has predicted a 3.1 percent increase in home sales in 2018, which would be even higher if there were more listings, he said.


A hot market is good for sellers but can be heartbreaking for buyers. Betts said a home he marketed on the city's northeast side had 23 offers - leaving 22 unhappy people.


That multiple-offer scenario plays out regularly across the area, Betts said. Based on the pace of sales in late 2017, there was only a 15-day supply of homes priced at $300,000 and under during the last month of the year. In El Paso County late last year, there was a one-month supply of all home types, he said; typically, the supply is five to six months.


"We really do have an inventory crisis here," Betts said.


Low inventory will continue to hold back sales in 2018, while owners of lower-priced homes can continue to expect multiple offers, he said. While the high-end market has improved, it will remain weakest above $1.2 million.


- Commercial real estate. Colorado Springs is increasingly attractive to businesses and employers because of its more affordable housing and utility costs, job and wage growth that's outpacing the national average and a desirable quality of life, said Brad Bird and Steve Kohls, vice presidents with the local office of CBRE, a national commercial real estate firm.


As a result, and driven by the demand for quality office, retail and industrial space, vacancy rates are heading down, while lease rates are rising, they said.


Still, Bird said, the Springs needs more commercial space to meet the increasing demand.


"We don't have the supply of that product, actively on the shelves in this market," Bird said.


The solution? An influx of deep-pocketed, experienced real estate developers from outside the Springs - who won't have preconceived notions about the local market - that are willing to take a risk and launch construction of commercial buildings, Bird said.


Apartments. The supply of Springs-area apartments and construction is keeping pace with demand - unlike the Denver area, where overbuilding is a problem, said Cary Bruteig of Apartment Appraisers & Consultants Inc. The local vacancy rate dropped to around 5 percent in late 2017, while average rents have soared to about $1,000 a month. In 2006, landlords were giving financial incentives of about $65 a month to lure renters; today, it's less than $20.


- Colorado Springs. Mayor John Suthers painted an optimistic picture of the community. Among the positives: improved roads being funded by a voter approved sales tax hike in 2015; more money for stormwater needs, thanks to a fee OK'd by voters in November; record passenger travel at the Colorado Springs Airport; ramped up hotel and hospital construction; the planned addition of an In-N-Out Burger distribution center on the city's north side to be accompanied by the chain's first restaurant in Colorado; and more emphasis by state transportation officials on widening Interstate 25 north of town.


Contact Rich Laden: 636-0228

Twitter: @richladen

Facebook: Rich Laden












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