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DURANGO — Think it's bad in Utah and Idaho, two western states that saw the highest price increases for homes in the nation this year?
Colorado is also facing its share of housing woes, especially in its southwest region, with a housing shortage that has reached crisis point, The Colorado Sun reported in an in-depth piece published Monday.
"Lack of housing has reached a crisis point in parts of southwest Colorado, where a shortage of places to buy or rent affordably is keeping critical businesses and organizations from hiring and retaining workers," The Colorado Sun reported. "Some residents have resorted to living in cars or on campgrounds, and local officials fear middle-income earners will be priced out of the housing market."
What's happening in southwest Colorado?
In La Plata County, home of Durango, the number of homes sold for $750,000 or more increased a stunning 169% between 2018 and 2021, while those homes priced at less than $250,000 dropped by 37%, according to The Colorado Sun, which cited a recent housing assessment commissioned by the Southwest Colorado Council of Governments and nonprofit Housing Solutions for the Southwest.
Businesses have struggled to hire during the pandemic, and Durango city officials say housing has become an obstacle to attracting low- and mid-wage workers.
In Durango, city properties have been getting overrun with weeds due to a shortage of employees in the local parks department, prompting administrative employees to clean up the landscaping themselves at City Hall over the summer, Durango Mayor Kim Baxter told the Sun.
"There are people I've talked with — their rent has gone from $1,100 a month to $2,100 a month overnight," the mayor told the publication. "It's scary."
Southwest Colorado's housing shortages come after years of housing price increases in the largely rural area, "where new housing has historically catered to part-time homeowners and wealthy vacationers," the Sun reported.
"The crunch is similar to that gripping other Western Slope communities that have begun to crack down on short-term rentals amid soaring home prices and a painful labor shortage," the newspaper reported.
Why is the West's housing market exploding?
Like it did in other western states like Utah and Idaho, the COVID-19 pandemic spurred many to rethink living in big, dense expensive cities and lured them to areas like rural corners of Colorado. That, combined with the lucrative short-term rental market and a growing number of retirees, has compounded Colorado's housing pressures.
The state of the market is stunning county assessors in Colorado.
"It's getting pretty intense just because there's not so much supply anymore and there's a lot of demand," Archuleta County assessor Johanna Tully-Elliott told The Colorado Sun. "I've not ever seen anything like this, no, and I've been here for 20 years."
Some more eye-opening figures included in The Colorado Sun's report:
- Across Archuleta, Dolores, La Plata, Montezuma and San Juan counties, median rent increased 31% between 2010 and 2019 while renters' median income went up just 19%.
- In those counties, more than 11,000 residents were spending more than 30% of their income on housing in 2019 — 4,689 paying more than 50%.
- In La Plata County, residential property values have gone up about 30% since the end of June 2020. Homes that used to sell for $450,000 are now going for $600,000 or more.
- In nearby Archuleta County, where Pagosa Springs is the largest town, the average active sale price is now over $1 million and the median is $750,000, compared with around $350,000 last year.
News of Colorado's crisis comes as housing experts in Utah have raised red flags about the Beehive State's housing market. Earlier this month, a new report from the University of Utah's Kem C. Gardner Policy Institute warned Utah is now facing a "severe imbalance" in its housing market, facing an only escalating affordability crisis with now more than half of Utah's households are unable to afford the state's median-priced home.