Colorado Springs is a Colorado city located in El Paso County- one of the major real estate markets in the state and home to more than 700,000 people. As the county's second-largest city, the temperature of the market here drives the statistics for the area overall.
Especially popular for single-family homes- with new homes being built in many parts of the city- Colorado Springs, CO, has experienced significant shifts this year- with trends moving more towards a buyer's market than a seller-driven market.
Below, you can find everything you need to know about the real estate market in Colorado Springs- including current trends, year-over-year comparisons, expert predictions, and the answers to some frequently asked questions regarding the city.
The Colorado Springs Housing Market In a Nutshell
El Paso County remains one of the hottest markets for real estate in Colorado, and as one of the major cities, Colorado Springs drives the trends. It remains a fairly competitive market- with supply and demand on a more even tilt than much of the rest of the country.
Overall, the market has seen some significant changes year-over-year, as rising mortgage rates and lingering effects of the pandemic continue to play roles and impact affordability. Sellers are facing longer market stays, more competition, and pressure to reduce listing prices to secure a sale.
Wolf Ranch (one of Colorado Springs' best neighborhoods) has some of the highest home values- but has also experienced a slight decrease in median sales prices compared to last year. It remains a competitive market for those with a higher budget.
There have been improvements overall for the seller's market recently- with year-over-year deficits decreasing. That said, the buyers still have significantly more power than they used to- bringing far more neutrality to the balance.
As far as property investment goes, Colorado Springs offers plenty of opportunities- and many experts say now is a good time to buy in the area while prices remain lower.
Some Figures and Statistics to Consider
- The number of homes Sold with price drops has been higher every month of 2023 when compared year over year by between roughly 26% and 3%. It has gradually recovered from the dip with each month- with most recent figures showing a 3.2% YOY increase to 20.6% of all homes.
- Far fewer homes sold above market value in 2023 so far- with figures recording year-over-year drops of between 40% and 47%. Only 36.6% of homes in the most recently reported month sold for more than their list price.
- Colorado Springs homes sold for 98.7% of their list price on average this year- below the national average, and 4.1% less than the previous year.
- There were 25.1% fewer sold listings so far this year than last year.
- Median and average home prices have been increasing steadily for a few years before COVID-19- by as much as 10-15% annually. They are now decreasing by between 4-5%, but it could change once again.
- The overall inventory of available homes for sale increased by more than 90% this year. Although the monthly supply is still way below what is considered optimal, it has created a wave in power for buyers VS sellers over the last few months.
Current Colorado Springs Housing Market Trends
The Colorado Springs real estate market has seen similar trends to most of the country- meaning slower sales, lower prices, and fewer homes sold overall. However, supply and demand in Colorado Springs is against the status quo- with huge increases in the inventory and a shift towards a more favorable buyer's market.
Here are more details on the key housing and real estate trends for Colorado Springs recently.
Median Sales Price
Home prices have dropped slightly- but not as much as in other major cities. The average price was $440,000 on the most recent reports- a decrease of 6.4%.
Looking at the trends over the year as a whole, the median sale price was $447,000 (a 4.9% drop), and the average sale price was just under $504,000 (a 4.2% drop).
Average Time Spent on the Market
It is taking much longer for homes to sell in Colorado Springs when compared with the same period from the previous year. At some points during the year, the increase was over 300% in El Paso County overall- but it has come down slightly overall for all counties combined.
In the most recent reports, the average number of days taken to sell a Colorado Springs home was 32 days.
Number of Homes Sold
Home sales have decreased in most parts of Colorado Springs by around 20-25%. This is partly due to the higher mortgage rates, and since the median home price in the city is 8% higher than the national average, affordability has had an impact.
What Are the Key Influencers in the Market?
Here are some of the things currently having an impact on Colorado Springs real estate.
Increased home construction has led to an influx of new listings in Colorado Springs- boosting the supply by an astonishing amount. It has already given back a lot of power to buyers- and is expected to continue doing so for the rest of the year.
One of the potential issues influencing the housing market in Colorado Springs is the high risk of drought. It is higher than the national average- due to the area's water stress level- and is predicted to increase further over the next couple of decades.
Like most of the US- and indeed, the world- higher mortgage rates have impacted Colorado Springs housing over the last few years. As interest rates increase, buyers may struggle to afford property- and sellers must react if they want to avoid getting stuck on the market.
The result? Lower sales prices and more homes selling for less than their market value. Buyers who can afford a larger down payment are likely to get far better deals if they search for property in Colorado Springs.
Predictions for the Colorado Springs Real Estate Market
Here are the standout predictions for how the Colorado Springs real estate market is expected to perform for the rest of the year.
Minor Shifts in Average Sales Prices
The average sales price of homes in Colorado Springs is expected to change slightly- with a small decrease predicted by most experts. That said, many believe prices will climb back somewhat toward the end of the year, and the inventory supply slows.
Already, the decrease is not as significant as in many other areas- with the market managing to maintain its generally high list and sale prices. Experts are interested to see how mortgage rates will come into play as things continue to change across the country.
Continued Move Towards a Buyer-Driven Market
In most of the US today, the seller's market prevails- but Colorado Springs tells a different story. Buyers have gained far more control in recent times thanks to the substantial increase in supply through new home construction and listings- with sellers having to accept slightly lower offers to close the deal.
Experts expect changes to slow down toward the end of the year, and recovery can already be seen in the year-over-year comparisons. This means things are not likely to swing completely in favor of the buyer- keeping things neutral and balanced.
Overall, the Colorado Springs housing market looks strong and healthy moving forward, and predictions expect things to remain stable for the foreseeable future. Although the city has experienced similar trends regarding reduced home sales and average prices, the shift has been comparatively minor and has not put too much pressure on the local real estate market.
Buyers are gaining more power with increasing inventory and slowing sales- but the sellers are still in a solid position as far as pricing goes.
The recent changes over the last year echo the climate in most of the country, but things seem to have calmed down and are on course for a reliable market temperature for the rest of 2023.
Frequently Asked Questions
Is the Colorado Springs real estate market a buyer's market or seller's market?
Right now, the Colorado Springs real estate market is considered neutral- meaning it is a reasonably balanced market. Recent changes- particularly in the housing supply- have increased buyers' power and created a more even market than many cities in the US right now.
Historically, the seller has held the power in this city- with high sales values and many homes selling for more than their list price. Things have changed since the pandemic, and house owners looking to sell quickly have had to reduce their asking prices to keep up with the pressure of high mortgage interest rates. Now, buyers have far more power than before- and more options!
How likely is it that the Colorado Springs Housing Market will crash soon?
It is very unlikely that the Colorado Springs housing market will crash. There is a good balance of power between buyers and sellers, the housing prices have not shown any major shifts, and there is a reasonably healthy inventory of available properties.
Despite some concerns regarding high drought risks, it remains a fairly appealing location- with several popular neighborhoods attracting a good flow of interested buyers. Because of this, experts do not predict a housing market crash in the near future.
Are there any major differences between West and East Colorado Springs in the housing market?
The local economy in Colorado Springs' major counties is fairly consistent from east to west- with the west coming out a little on top in terms of year-over-year comparisons. Average sale prices in the east have dropped around 8%, whereas the west has remained much the same.
Houses also take a little longer to sell (on average) in East Colorado Springs- at 35 days compared to just 18.