Study warns that short-term rentals are pricing out local residents

By Robert Tann | The Aspen Times

Home prices in Colorado’s mountain resort communities have skyrocketed over the past 13 years, with a new report further detailing the erosion of affordability for working residents. 

A study released on Wednesday by the Colorado-based think tank Common Sense Institute shows home prices in seven Western Slope counties — Eagle, Garfield, Grand, Pitkin, Routt, San Miguel and Summit — have more than doubled or, in some cases, tripled since 2012. 

The Common Sense Institute researches and promotes free-enterprise economic policy and bills itself as “nonpartisan.” Several of its board members, however, have ties to the Republican Party, and the organization has accepted funds from the conservative advocacy group Advance Colorado.

The study bases much of its analysis on data from Zillow, which shows that average prices in those counties as of this May range from just under $700,000 in Garfield to $2.5 million in Routt. 

The study doesn’t break those prices down by single-family and multifamily homes. Other data sets have shown that prices in many of those areas are even higher.

Data from the Colorado Association of Realtors, which releases a report each month on the state’s real estate market, shows that Pitkin County, home to Aspen, commands the highest price points. 

According to a May report, the average price for a single-family home was $12.9 million, while the price of a multifamily home, meaning a townhome or condominium, was $2.9 million. The Common Sense Institute, by comparison, shows the average home price in May in Pitkin County was $1.1 million. 

Realtors have stressed that month-to-month averages can swing dramatically because of the limited number of sales and high price points, meaning even one high-end sale can skew the data. The Common Sense Institute’s report is more in line with Realtor data for other communities. 

The think tank’s chief economist, Steven L. Byers, who authored the report, said the Zillow data excludes outliers that may skew the numbers, with home prices falling between the 35th and 65th percentile. 

Local officials and housing experts have also commissioned studies in their communities, often referred to as housing needs assessments. While the various data sets may differ in their exact numbers, all show a general decline in affordability for ski towns. 

“Over the past decade, surging home prices, strong demand for second homes, and limited new housing supply have created a severe affordability crisis in Colorado’s mountain resort communities,” Byers said in a statement. 

The report found that the overall average price increase across the seven analyzed counties was nearly 189% higher than the statewide average increase. 

It also found that most of those counties have a housing shortage based on data from the U.S. Census Bureau’s American Community Survey and the National Association of Home Builders. Just two counties, Routt and Grand, have a slight surplus of housing, according to the report. 

Other communities had housing shortages ranging from 480 in San Miguel to 1,975 in Garfield. 

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