Friday Update April 2, 2021

302 single family homes on the market today.  Similar numbers to last week and we're definitely not seeing that nice ramp up of inventory that I'd like to see this time of year.  More listings are hitting the market, they're just going under contract within days/hours.

1275 total patio homes and single family homes sold in March for a median price of $410,000.  That's a fresh record folks.  That also means we have 1 week of inventory on the market.  Balanced would be like 6 months.  All that stuff I've been saying about multiple offers, appraisal gaps, people super duper struggling to find houses remains true with no end in sight.

Interest rates steady off the record lows, high 2s low 3s.

I'm gonna try to keep this one short because I worked on an excavator all day to facilitate a real estate transaction on which I will literally not make any money.  Am I stupid?  Maybe.  Does everything have to be about making a quick buck?  No it doesn't, at least it doesn't have to be.

Do you know what's easy?  Bitching about a lack of affordable housing.  You know what's difficult?  Building affordable housing.  That's why I was on a excavator all day today, to try and figure out a way to build some affordable homes.

You see when you go to any local builder here today they will tell you what you can have, if anything, when you can have it, and if you're lucky they'll tell you that you can have it without having to compete for it.  Yea true story builders are moving towards the highest and best model of pricing just like resales are.  Unfair?  $7 for a 2x4 is unfair too.  $50 for a 4x8 sheet of siding is unfair.  Not being taller, not being a baller, all unfair.  So you can go to a local builder right now and drop at minimum $400,000 for a roughly 1800 square foot new build.  If you want something with like 5 bedrooms probably bring a half million and don't be picky :)  Am I an asshole?  Or just honest?   Both.

Now how about affordable housing?  There's land everywhere right?  Why don't people just build on it.  Land costs money.  An average lot in an average development right now is fetching around 100k.  That's a start.  Then of course the city wants a piece.  Maybe you go somewhere out the way like Cripple Creek or P West where tap fees for utilities run $6,000 and $9,000 respectively.  But then maybe you're in Colorado Springs and east of the Springs where tap fees will be $17,000 to $30,000.  This is just for permission to tap into the central utility infrastructure.  Not the actual work and materials to do so. Then you're going to drop like $7,000-$10,000 on plans and permits before ever digging a hole. 

Next up of course you need to put together a team of contractors who actually show up, do quality work, and don't charge you lawyer money for plumbing or carpentry.   Then of course you have to buy the materials which don't seem to have a top to how much they cost, stuff goes up in price weekly.  

Fast forward like 12 to 24 months depending on where you started and if everything goes right you have built a house that costs quite a bit of money!  So as a builder who just put a year or two of their life into that house do you think they're doing it to sell it at a loss?  Or to break even?  Of course not.  So you mark that bitch up like 10-25% not including the cost of selling and put some food on your own table.

Back to the excavator.  In order to provide affordable housing we need the following:

1.  Zoning changes that permit for more homes to be built on smaller lots.

2.  A reduction in tap fees to specifically build affordable housing.

3.  Relaxation of rules regarding accessory dwelling units aka new mother in law cottages.

4.  A committee or branch of regional building that is devoted to helping smaller builders navigate their processes.

5.   Serious, sizable tax incentives for building affordable homes (the definition of which needs to be established based on regional median incomes)

6.  A discussion needs to be had about land that is held by municipalities and how that can be developed through municipal/private partnerships.

7.  And I'm just going to really jump out on a limb here and say this no matter how many of you hate me for it.  Churches holding acres of land in city limits need to pay the same vacant land tax everyone else does.  That's 29% a year here.  It makes no sense that you have these tax shelters that allow churches to literally sit on multiple acres of land all around the city, not pay any taxes and then dump that land for a huge profit whenever the congregation relocates.  Good example is Chapel Hills or whatever the new development is where Challenger is building off Fountain.  Over 20 acres of land sold to be developed into several hundred homes, I can't seem to find the details of the transaction anywhere but I'm sure it was well into the millions.  I honestly don't care about what your religious beliefs are, I respect people equally, and that's why I think we should all be treated equally when it comes to taxation.  This is not a local thing and neither is the lack of affordable housing.  Putting hundreds of acres into rotation locally, and hundreds of thousands of acres nationally, would make a huge impact on the possibility of building affordable homes within established neighborhoods.  And I'm sure I'll get flack for this, and if hurts your feelings a lot call another agent.  It's ok :)

So yea, no easy answers.  We just keep plugging away doing what we can do.  If you have some suggestions on other things that can help this affordability crisis I am all ears and happy to hear it.  Please and thank you and have a great weekend.

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