If you’re about to dip your toe into the housing market for the first time, you’ve come to the right place.
Colorado Springs ranks 15th among 300 cities nationwide as an attractive place for first-time buyers to purchase a home, according to a survey released Monday by WalletHub, a personal finance website. And of 62 cities in the survey with a population of at least 300,000, Colorado Springs ranked No. 1.
WalletHub looked at 18 factors that help drive a market’s appeal for first-time buyers, such as housing costs, median household incomes and property taxes. The survey also examined quality-of-life factors, including crime rates, weather, recreational opportunities and the availability of jobs.
The Springs’ affordability, especially when compared with Denver and other cities, is a key ingredient that makes it attractive to first-timers, said Joe Clement, broker-owner of Re/Max Properties.
Over many years, home values in the Springs have appreciated at a slow and steady rate of roughly 6 percent to 7 percent a year, Clement said. Prices have risen but haven’t spiked dramatically and therefore haven’t been subject to sizable declines when the economy nosedives, he said.
But Denver and other markets have soared at double-digit increases and have further to fall when the economy tanks, he said.
At the same time, Denver’s median home sales price in June was $112,000 higher than that of Colorado Springs, according to monthly housing reports in both cities. As a result, Denver buyers likely are paying several hundred dollars more each month on mortgage payments, Clement said.
“First-time buyers really have an opportunity here in Colorado Springs to get a nice home for an affordable price because where we’ve been over the years, we just haven’t had those 20-30 percent appreciations like Denver is seeing and what lots of California cities have seen,” he said.
Bill Hurt, owner and president of ERA Shields Real Estate in Colorado Springs, said the area’s economic improvements – including growth at local hospitals and the University of Colorado at Colorado Springs – will benefit first-time and other homebuyers.
Springs elected officials are also emphasizing road and infrastructure upgrades, which will help improve the area’s quality of life for the benefit of homebuyers, Hurt said.
But does Colorado Springs’ appeal to first-time buyers benefit the rest of the market?
Yes, because purchases by first-time buyers allow existing homeowners with equity in their properties to buy more expensive homes, Clement and Hurt agreed. That domino effect eventually could lead to increased purchases of higher-end homes – a soft spot in the market for several years, they said.
“This is where it starts, with the first-time buyers,” Clement said.