All Forum Posts by: Robin Searle

@Mark Gutierrez I think you are being wise. When you can get a new build for the same price as a 1980 home is being bid up to, it just makes sense. Oakwood is a solid builder with a good local reputation. I wrote an offer on a home listed at $350,000 yesterday and we were one of 10 offers!

@James Carlson I have a first time buyer at that $250000 max  price point and let me tell you the pickings are slim to nonexistent. Anything decent will easily be bid above appraisal so buyers need cash to bring to the table. Very tough for lower price point buyers! Kind of missing the 2010 market when I started in real estate!

@Kacee Bui not sure why your CS search didn’t bring results on here. A lot of us post about the Springs pretty consistently. That price point is very very tough! I’d be happy to give you more info if you want to message me.

@Mark Gutierrez It's very difficult for first time buyer's. I have two right now with one only being able to go FHA and it's frustrating all around. I did want to mention Oakwood Homes is finally addressing the first time homebuyer market with semi-detached homes in Banning Lewis that start at $252,000. That's the lowest price I've seen for a new build in a long, long time. I just got my son under contract on one after looking at a lot of resales in extremely bad condition.

Our market is trending hotter but we have fewer than 600 resale properties on the market right now!  A recent flip received 25 offers.  Here's a clip from the article in the Gazette:  

Colorado Springs continues to be one of the country’s hottest housing markets, a federal report released this week shows.

Local home prices spiked 11% in the fourth quarter of 2019 when compared with the same period a year earlier, an increase that ranked No. 2 among the nation’s 100 largest metro areas, according to the Federal Housing Finance Agency.

Only Boise City, Idaho, with a 12.7% gain in home prices, had a larger increase on a year-over-year basis, the agency’s report showed. Colorado Springs’ strong local economy and population growth, combined with low mortgage rates, have fueled the demand for housing and driven up prices, local real estate agents have said.

Of other Colorado metro areas in the report, Denver-Aurora-Lakewood saw a fourth-quarter increase of 5.7% compared with the same quarter in 2018. Across Colorado, prices were up 6.4%, which ranked 11th in the U.S.; nationwide, prices rose 5.1%.


In December, a National Association of Realtors study listed the Springs as one of the 10 housing markets that will outperform the rest of the nation over the next three to five years.


Also that month, a forecast by Realtor.com, the California-based online real estate service, ranked the city as No. 7 among the nation’s Top 10 housing markets for 2020.

That shortage of homes for sale — an issue many cities face — has combined with the furious demand to help propel housing costs. The Pikes Peak Association of Realtors said the median price of Springs-area homes sold last month hit a record high of $336,795.

@Jennifer Pauyo I’ve got ten years as an agent in Colorado Springs and started investing five years ago!

@Brandon Bonfiglio - I do STR in the Springs. It's been a bit of a roller coaster with our city council. Right after we purchased our triplex, they passed the first round of regulation requiring permits and a set of rules to follow (January 2019). We formed the Colorado Springs Short Term Rental alliance in 2018 in order to advocate for "reasonable" regulation. No one had an issue with regulation - we just asked to be involved and allow the data to provide the city information over the following year. One year later, with zero permits revoked for breaking rules and very, very few complaints to the city about STR's, the council decided at random to completely change the rules. No explanation. They stopped allowing any future STR's in R1 zones unless it is your primary residence at least 50% of the year AND there is not another STR within 500 feet of the one you want to start. All existing owners were grandfathered in.

My property is zoned R4 but can only fit three units due to set back and lot coverage rules, but we are allowed to do up to 4 STR's in a multi-family zone. If you have an 8-plex, you would be able to do 4 of them as short term for example. Again, as a new owner, you'd have to check that there aren't any other's within 500 feet, even if you purchased multi-family. Also, if I sell my property, the permits don't go with the property.

So it's difficult to get into now and I would say that as always, it's extremely important to have a back up plan in case the city decides at random again to just shut the whole thing down. They don't have any explanation for why they keep moving the bar so I don't have any expectation that they won't continue to do so. There is a link on the Colorado springs.gov page where you can put in an address you are considering to see if there are any other STR's too close by, but again, if it's a single family it has to be your primary. One other caveat, I don't know a single HOA in the city that allows STR's so you can't even think about doing them in a townhome or condo complex.

This isn't unusual at all in Colorado Springs for a multi-family with tenants in place. The poor tenants would have no life with all of the investors lined up outside the door in this very hot market if the agent and seller didn't do it this way.  If one unit is vacant, they will typically allow showings on that one and encourage you to write your offer the same way - subject to inspection on the other unit(s). It does make it difficult when formulating your offer but a good buyer's agent can help guide you through things like looking at permits to see how old things like the roof, water heater, furnace, etc are.  The agent can also request to see the sellers property disclosure prior to writing an offer.  In Colorado the earnest money is always refundable (if the agent writes the contract correctly) up until the final deadline in the contract which is typically loan objection.  The contract states if in the buyer's subjective opinion they aren't happy with the terms of their loan they can cancel prior to that deadline.  I tell sellers to never count on seeing earnest money as it's more a statement of good faith than something they'll get to keep. In a competitive bidding situation you can make your earnest money "hard" or non-refundable early on (say after inspection) if you want to make your offer more attractive to the seller.

@Bo A Vanecko I totally agree with you. My long term rentals are just as much of a business. The state is simply looking for a way to boost their income by zeroing in on STR's. That being said, Colorado has an extremely low property tax rate on residential compared to other states. Whether they move to tax STR's as commercial or not, I still think they will be profitable, especially if you pass the tax on to the guests via an increase in nightly rates.

I think decimating Colorado home prices is a bit extreme - specifically I don't believe this would happen in Colorado Springs. I have a triplex which currently has 1 STR and 1 LTR with a studio under construction. I've got permits pulled and am going to convert both the studio and LTR to short term (my long term tenant is moving into another one of my rentals). If this bill were to pass (and yes Bob Gardner (R) has put it forth at the state level), it would raise my property taxes approximately $5,000 per year. With the current vacancy I'm running on the one STR on this property, I could raise my rental rates less than $20 on just that one unit and easily cover this additional tax.

It could certainly hurt owners with highly leveraged properties if they for some reason have a high vacancy rate (I don't) but again, the amount of rental increase it takes to offset the tax is minimal if you are staying booked.  In the Springs, particularly, we have at last count 2,052 short term rentals who are in compliance with the city permitting. If all of those suddenly were to hit the market, it would not decimate our resale prices - it might stop them from rising quite so fast but I think that would be a good thing.  As of today we have a TOTAL of 698 resale properties (single family, townhomes, condos) on the market in ALL of Colorado Springs (city). That is the craziest, lowest inventory we've had in seven years.  We are absolutely desperate for resale. 

You always have to have a back up plan no matter your strategy and mine has always been to convert to medium term (travelling nurses) or long term if the whole STR model was outright banned here. I knew going in that was a possibility, but the increase in property tax would in no way make me change to either of those options right now.

I can't speak to other areas of Colorado on how this would affect home sale prices, but again, the rent amount it takes to cover the additional tax just isn't enough to put most people out of business in my opinion.