Home prices reach record high but wages fall behind

Home prices in Colorado Springs have reached a record high for the third month in a row while the demand for housing continues to rise.

“I would say this is definitely still a seller’s market,” said Mike MacGuire, the co-owner of The Platinum Group, Realtors. “It’s very strong and we still see nice appreciation but definitely at certain price points over others.”

According to the June report from the Pikes Peak Association of Realtors, half of the single-family houses in the area were sold above the median price of $331,000; the other half was sold under that price.

The latest report comes as the U.S. economy enters its longest period without a recession since the Great Depression of 1929.

However, local experts say they’re not worried about another recession affecting home ownership

“Yes, prices are increasing but they’re not increasing at the same rate that they were before so that is good news,” said Tatiana Bailey, the director of economics forum at University of Colorado Colorado Springs.

But Bailey said her main concern is the low wages of Colorado Springs.

“The downside is that we’re still below the average wage for the United States and also as compared to Colorado,” Bailey said.

MacGuire said the low wages keeps people from affording their first house, especially college students who graduate with debt and are entering the job market.

“They’re locked out of the buying market then they have to rent,” he said. “I feel pretty bad for a lot of young people that are trying to rent houses, rent townhomes”

Macguire said the lack of people buying their first home keeps other homeowners from selling and moving into another house.

“So that stair system is stifled,” he said.

Affordable housing is an issue the city of Colorado Springs is looking at tackling. The city asked for public input on housing costs back in June in response to rising rent and housing costs.

Bailey said the market could go down if wages don’t catch up fast enough.

“If we’re going to continue to see these housing costs increase – even if it is just 5 or 10 percent – wages need to be keeping up,” Bailey said.