My friend Bob (last name omitted to protect the guilty) sold his sprawling house in southwestern Colorado Springs some time ago, and he has been looking for a smaller place since. When he sold, we were beginning to emerge from a long, dismal buyers market.
Now we're in the kind of sellers market that we haven't seen for decades.
Bob has seen the market run away from him, as modest fixer-uppers in marginal neighborhoods suddenly morph into desirable residences. He's been on the short end of bidding wars, as multiple buyers pursue houses that once would have languished unsold. He'll find a place eventually, but he'll likely end up paying much more and getting much less than he might have two or three years ago.
"The market is really, really strong," said my former Colorado Springs Business Journal colleague Amanda Miller Luciano, who abandoned journalism a few years ago for a career in real estate.
"I've never seen it like this," said veteran Manitou Springs real estate broker Mike Casey.
In 1941, my parents bought a mildly dilapidated, three-story Victorian on North Tejon Street for $2,100. The Cripple Creek gold rush had ended decades before, and Colorado Springs was a pleasant, poky, tourist-dependent little town. Built in 1899, the Tejon Street house had likely declined in value since. Real estate in 1941 wasn't seen as a particularly good investment, but one you made for a stable and secure living environment.
Then came World War II, the postwar boom and an era of sustained growth. After my father died in 1957, my mother sold the house and downsized. The sale price: $17,500 — an increase of nearly 800 percent.
In 1995 it sold for $265,000, a 1,500 percent gain in 38 years, almost precisely matching the 1941-1957 rate. In October 2014, the house again changed hands, this time for $730,000.
That's a decent enough rate of appreciation, but it pales next to the 1941-1995 rate. North Tejon is now considered one of the more desirable streets in the Old North End, a status that it didn't have a half-century ago.
"Nevada and Cascade have a lot of traffic," one North End resident told me, "and the noise from I-25 and the railroad is pretty severe on Wood and the streets west of Wood, so Tejon is the sweet spot."
Still, $730,000 seems like a lot — and it was in fact the highest sale price ever recorded for North Tejon. For those who paid attention, it might have signaled the end of residential real estate illiquidity.
When my then-spouse and I bought a three-story Victorian on West Bijou Street in 2000, we paid $276,000. It seemed like a reasonable deal at the time, but it wasn't. Property values stagnated on the west side, and then came the recession. When I asked what the place might bring, brokers said I'd be lucky to break even.
"The location isn't that great, the house needs work, and there aren't any buyers," one notably honest agent told me. "It's a beautiful place, so just hang on to it. Sooner or later, the market will turn."
That was three years ago. As he predicted, the market has turned — and may be on the verge of exploding.
One lovingly renovated, 1,000-square-foot cottage on a 3,500-square-foot lot less than a half-block from our house sold for $187,500 in June, a substantial jump from $105,000 in 2007. Throughout the west side, sales are strong and homeowners are fixing up and renovating.
"Millennials are an enormous demographic bulge," said Luciano, "bigger than the Baby Boomers. They're entering the years of family formation. They like urban environments and close-in, walkable neighborhoods. Not like the Boomers, who sprawled out to Kansas. There are a limited number of those neighborhoods, and that's where they'll go."
Luciano walks her talk — she and husband Joe will move next month into a 1960s rancher in Pleasant Valley.
And what about my aging wreck of a house?
"You would be amazed at how much you might get," she said, "but you'd better hang on to it. You'll never find anything as nice — and no matter how long you wait, you'll never be able to afford Tejon Street."