The Real Reason Homes Feel So Expensive (And It’s Probably Not What You Think)

If you’ve spent any time scrolling through social media lately, you’ve probably seen people blaming big investors for driving up home prices. It’s an easy theory to believe — after all, it feels like they’re buying up everything.

But here’s the truth: the numbers just don’t back that up.

Are Investors Really the Problem?

Yes, investors are part of the housing picture. They always have been. But they’re not buying homes at the scale social media makes it seem.

According to Realtor.com, only 2.8% of all home purchases last year were made by large investors — meaning companies or individuals who own more than 50 properties. That means about 97% of homes were bought by regular people like you and me.

Danielle Hale, Chief Economist for Realtor.com, summed it up perfectly:

“Investors do own significant shares of the housing stock in some neighborhoods, but nationwide, the share of investor-owned housing is not a major concern.”

Watch our video about this very topic! https://www.youtube.com/watch?v=sqRAVU9PMF4&t=101s 

So if investors aren’t the main culprit, what’s really going on?

The Real Reason Home Prices Feel So High

It’s not about who’s buying. It’s about how many homes there are to buy.

For years, we’ve had a shortage of housing — not just in Colorado, but across the country. There simply haven’t been enough homes built or listed to keep up with the number of people who want to buy.

Robert Dietz, Chief Economist at the National Association of Home Builders, explains it clearly:

“The fundamental driver of housing costs is the shortage itself — it’s driven by the fact that there’s a mismatch between the number of households and the actual size of the housing stock.”

That’s the real issue. Demand has outpaced supply for years, and that imbalance is what’s been pushing prices higher — not investors scooping up all the listings.

What’s Changing Now

The good news? We’re finally starting to see more homes come on the market again. Builders are adding new inventory, and some sellers who were on the sidelines are deciding it’s time to make a move.

As more options become available, buyers may start to feel a little relief — and sellers will need to think strategically to make their listings stand out.

Bottom Line

It’s easy to believe the headlines or what you see online, but housing prices are mostly a supply-and-demand story. The market doesn’t need fewer buyers — it needs more homes.

If you’re thinking about buying or selling, let’s connect. We’ll walk you through what’s really happening in the Colorado Springs market and how to make the numbers work for you.