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Active listings reached 3,918 homes in October 2025, the highest level in over a decade (Great Colorado Homes, 2025). The median home price held at $473,500, flat year-over-year, while days on market jumped 20% to 54 days. For buyers who've waited through years of bidding wars, leverage has finally shifted.
The Numbers
Median sale price: $473,500 (flat YoY)
Average sale price: $543,590 (down 2.5% YoY)
Active inventory: 3,918 homes (highest in decade)
Days on market: 54 days (up 20% from last year)
Month's supply: 4.5 months (approaching balanced at 6 months)
Price reductions: 41% of active listings (vs. 33% in normal market)
Sources: Great Colorado Homes (2025), Colorado Springs Gazette (2025), Redfin (2025)
What Changed
Inventory surged. Colorado Springs added over 1,500 homes to the market in the past year, a 34% increase (Orchard, 2025).
The lock-in effect is breaking. Homeowners with 3% to 4% mortgages are selling despite facing rates in the mid-6% range. Financial pressures and multi-year wait times for rate declines are pushing inventory to market.
Price reductions are common. 41% of active listings have dropped price, well above the 33% typical in balanced markets (Wish Property Group, 2025).
Premium properties struggle. Homes above $500,000 average significantly longer market times than properties under $400,000.
What It Means
For buyers: Negotiating power is real. Well-priced homes still sell quickly (under 30 days), but overpriced listings sit. Buyers can negotiate 2% to 5% off list price on properly presented properties (Wish Property Group, 2025).
For sellers: Sharp pricing matters. The "test the market high" strategy leads to extended time and price cuts that signal desperation. Homes generating strong initial interest sell faster and for better prices.
For investors: Cash flow works now. A $450,000 property renting for $2,200/month generates positive cash flow at current rates. When that property cost $485,000, the math didn't work. Price-to-rent ratios have improved.
Neighborhoods to Watch
Different areas show varying dynamics:
East side (Powers Corridor): Best value at $380,000-420,000 median, strong rental demand from military families
North (Briargate/Flying Horse): Premium pricing holding better, longer market times but less price cutting
Downtown/Old Colorado City: Urban lifestyle appeal, condos showing weakness, single-family holding
South (Fountain/Security-Widefield): Most affordable, highest inventory growth, buyer leverage strongest
The Military Factor
Fort Carson, Peterson Space Force Base, and the Air Force Academy create constant demand. During the 2008 recession, when national prices plummeted 20%, Colorado Springs only saw a 12% decline (Johnson Team, 2025).
Mortgage Rate Impact
Current rates between 6.5% and 7% have changed affordability. Monthly payments for a $473,500 home with 20% down now reach approximately $2,850, compared to $1,900 at 3% rates in 2021.
If rates decline to 6.1% by late 2026 as some predict (Norada Real Estate, 2025), affordability improves without requiring price declines.
Forward Outlook
Inventory will likely grow through spring 2025. Colorado Springs inventory typically peaks between early October and mid-November, but this year's pattern suggests the peak may extend into early 2026 (Colorado Home Realty, 2025).
Prices will likely stay flat to down 2-4% over the next 12 months. Strong fundamentals including population growth (69% increase from 1992-2022), diverse employment, and 4.5-month supply (below the 6-month balanced threshold) provide support (Norada Real Estate, 2025).
Quality homes priced correctly still generate multiple offers and sell quickly.
Tax Considerations for Buyers
El Paso County property taxes average 0.42% of assessed value, well below the national average of 0.90% (SmartAsset, 2025). The county reassesses properties every two years in odd-numbered years, with the next reassessment in 2027.
For investors, cost segregation can generate $15,000-20,000 in first-year depreciation deductions on a $450,000 rental property, creating immediate tax benefits that improve cash-on-cash returns.
The Bottom Line
Colorado Springs shifted from seller advantage to buyer advantage. Buyers who've waited have leverage. Sellers who price realistically still succeed.
Military presence, population growth, and quality of life ensure long-term demand. Short-term inventory increases create opportunity without destroying value.
Fall and winter 2025 offer the best conditions in five years.
References
Colorado Home Realty. (2025, June 3). Colorado Springs real estate rebalances: Inventory climbs, prices hold steady, while leverage shifts to buyers. https://coloradohomerealty.com/knowledge/colorado-springs-real-estate-rebalances-inventory-climbs-prices-hold-steady-while-leverage-shifts-to-buyers/
Colorado Springs Gazette. (2025, November 15). As market cools, Colorado home prices finally level out. https://gazette.com/2025/11/15/as-market-cools-colorado-home-prices-finally-level-out/
Great Colorado Homes. (2025). Colorado Springs housing market in 2025 | Local real estate statistics. https://greatcoloradohomes.com/colorado-springs-real-estate-market-statistics.php
Johnson Team. (2025). Why Colorado Springs real estate remains a smart investment in 2025. https://johnsonteamworks.com/blog/why-colorado-springs-real-estate-remains-a-smart-investment-in-2025
Norada Real Estate. (2025, November). Colorado Springs housing market: Trends and forecast 2025-2026. https://www.noradarealestate.com/blog/colorado-springs-real-estate-market/
Orchard. (2025). Colorado Springs housing market: Stats & trends. https://orchard.com/homes/real-estate-market-report/city/co/colorado-springs
Redfin. (2025). Colorado Springs housing market: House prices & trends. https://www.redfin.com/city/4147/CO/Colorado-Springs/housing-market
SmartAsset. (2025). Colorado property tax calculator. https://smartasset.com/taxes/colorado-property-tax-calculator
Wish Property Group. (2025, May 8). Colorado Springs housing market. https://wishpropertygroup.com/colorado-springs-housing-market/
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