Millennials Lead the Housing Pilgrimage to Colorado Springs
While some housing markets in the United States struggle with affordability or even availability, others are flourishing and should continue to do so through at least 2024, if not longer.
Take the Colorado Springs market for example. No longer just the home of the U.S. Olympic Committee, the Air Force Academy and USA Hockey. Instead, the burgeoning western market is growing rapidly and with a lot of younger folks moving to the area, it could well be a trendy location to become home for many residents in the years to come.
It, along with several other markets that are doing well, should all outperform initial projections for that market over the next three to five years, according to a study released in December by the National Association of REALTORS® (NAR).
“Some markets are clearly positioned for exceptional longer-term performance due to their relative housing affordability combined with solid local economic expansion,” said NAR’s Chief Economist Lawrence Yun. “Drawing new residents from other states will also further stimulate housing demand in these markets, but this will create upward price pressures as well, especially if demand is not met by increasing supply.”
The 10 most notable markets expected to outperform projections also included Charleston, S.C., Charlotte, Columbus, Ohio, Dallas-Fort Worth in Texas, Fort Collins, Colo., Las Vegas. Ogden, Utah, Raleigh-Durham-Chapel Hill in North Carolina and Tampa-St. Petersburg in Florida.
There were a number of factors that made these markets project to be the hottest as far as real estate over the next half-decade, including job growth compared to the national average, housing affordability, the structure of the age population, their attractiveness to retirees, how likely they are to attract new residents from out of the area and also the appreciation of home prices over time.
“Potential buyers in these markets will find conditions especially favorable to purchase a home going into the next decade,” said NAR President Vince Malta, a broker at Malta & Co., Inc., in San Francisco. “The dream of owning a home appears even more attainable for those who move to or are currently living in these markets.”
A whopping 21 percent of the total population in the Colorado Springs market (approximately 155,700 people) moved into the area recently, and 68 percent of those are renters.
That rent number shouldn’t surprise since the median age of all recent movers to the area is 27 years old.
Still, despite the youthful nature of this population boom, 35 percent of those recently moved renters can afford to buy a home at the median price of $286,100 assuming a 20 percent down payment.
Despite the young age, 56 percent of these recent movers are either married couples or families, meaning they are looking for a place to set down roots for their families while finding a place that is affordable to live and work. The remaining 44 percent are single individuals, and considering the median age, they are likely looking to begin their careers in a place they can afford to live. The average length of time for people to own a home in Colorado Springs is only eight years, but with the influx of new residents being more than one-fifth of the population, that number should rise in the coming years.
While a large number of recent movers have come from other parts of Colorado, specifically Denver, which is struggling with housing affordability and availability, about 50 percent of people are moving to Colorado Springs from out of state – and not just the biggest cities.
Seattle and Washington D.C. top the list, but Colorado Springs is getting an influx of new residents from Killeen/Temple, Texas, Fayetteville, N.C. and Honolulu.
It’s also seeing migration on a smaller but still noteworthy scale from other large cities like Los Angeles, Dallas and New York.
It doesn’t come as a surprise that NAR sees it as a market that will exceed expectations. In 2018, Colorado Springs received several accolades: U.S. News and World Report named it the number one most desirable place to live in the United States. The Metropolitan Policy Program at Brookings Institute found it to be the fastest-growing city for Millennials and Thumbtack’s annual Small Business Friendliness Survey found Colorado Springs to be the number four most business-friendly city in the country.