Continuing a cooling-off period that began in 2023, it will be “more of the same” for Colorado Springs’ residential and commercial markets this year, a trend shaped by economic uncertainty, relatively high interest rates and construction costs, skyrocketing insurance rates and overall cautious consumer sentiment.

But while things may have slowed in recent years, the economic landscape in Colorado Springs and El Paso County is still healthy — though more expensive than it was five to 10 years ago.

Industry experts on Wednesday presented the state of the national, state and local real estate market at the 36^th annual real estate economic forecast breakfast. More than 65 industry members attended the event hosted by the Southern Colorado chapter of the Institute of Real Estate Management at the Great Wolf Lodge in northern Colorado Springs.

“We’re really doing just fine,” said Michael Suggs, managing broker and principal at NAI Highland, a Springs-based commercial real estate agency. “Things are slower than they were, say, three, four, five years ago. But (area real estate agencies) … we are doing transactions. There is demand. Companies want to be in Colorado Springs. The things that are causing us to slow down, it’s things that are out of our control: construction costs, high interest rates, things like that.”

Here are other highlights from this year’s event:

Single-family housing

As the median price of a single-family home remains above $450,000 in the Colorado Springs area, industry experts are “kind of expecting” the residential housing market to take a downward turn this year, said Tiffany Lachnidt, a longtime real estate agent with Keller Williams Premier.

The local median home price hit a record high of $500,000 in June, according to historical data maintained by The Gazette, based on monthly figures from the Pikes Peak Association of Realtors. An association report released this month shows the median sale price of single-family and patio homes in the Colorado Springs area in January was just shy of $470,000.

While Colorado’s and Colorado Springs’ housing markets are evolving, median home prices aren’t coming down significantly, so it’s causing sluggishness, Lachnidt said.

“The problem is, when you jump interest rates 2.5% to 3% and home prices don’t come down, it just becomes stagnant and affordability just kind of gets destroyed, especially for younger buyers who haven’t been in the market yet,” she said.

Inventory is becoming more seasonal again, tapering off in the fall and picking back up in the spring, which some could interpret as a major market correction.

But median home prices remain steady while more inventory comes online and stays on the market for longer, pointing to a “stalemate” between sellers and buyers, Lachnidt said.

“Sellers are saying, if I can’t get my number, I’m just not moving,” she said.

The national average 30-year fixed mortgage rate has come down from its 10-year peak of about 7.8% in mid-October 2023, according to data from mortgage buyer Freddie Mac. Rates are still relatively high, though, Lachnidt said.

The average 30-year fixed mortgage rate is 6.1% as of Jan. 29, the most recent figures show. President Donald Trump said on social media in January he is directing the federal government to purchase $200 billion in mortgage bonds to help reduce rates.

Lachnidt predicted home prices and sales activity won’t hugely improve until mortgage rates are back in the 5% range.

Multifamily housing

Thousands of new multifamily units have come online in recent years after a surge of new residents relocated to El Paso County during the COVID-19 pandemic.

But rent growth, or the percentage increase in rents, is down about 7% from last year and down 14% from when rents peaked in the third quarter of 2022, said Willy Holliday, an associate with Colorado commercial real estate services firm CBRE in Denver.

Additionally, rents are down 7.6%; the vacancy rate is 7%; and concessions are up 107.5% from last year as apartment complexes aim to attract new renters and keep their current renters.

At a high in 2022, more than 8,000 multifamily units were under construction. On an annual basis, more than 6,000 multiunits — or 10% of the current inventory — came online in 2024.

In 2025, 2,438 units came online.

“That’s a significant decline … but, for historical context, 2,500 units is still a lot for this market, he said.

Absorption, or the rate of multifamily units leased, was down last year; 3,245 units were occupied at the end of 2025, down from a peak of about 4,000 units at the beginning of the year, an all-time high.

“Even though it’s come down a little bit … it’s still pretty positive, it’s very solid demand,” Holliday said.

The construction pipeline of new multifamily units is “winding down,” with only about 2,800 units under construction currently. Only a handful of multi-family projects are expected to break ground this year, all located in suburban areas.

In 2026, only about 1,350 units are expected to come online and another 1,700 in 2027.

“We really see our delivery expectations tapered off (in) 2028 and rent growths start to return,” he said.

In the future?

“There’s no dramatic jumps. There’s no 5% rent growth jump, no huge dip in vacancy rates. The story moving forward is relatively straightforward: it’s a decrease in the number of deliveries, and that will lead to a slow and steady recovery in fundamentals for vacancy and rent growth in the Springs,” Holliday said.

Commercial real estate

The retail market in Colorado Springs remains quite strong, with low vacancy rates and tight availability.

“There is still a lot of demand for retail space. … We do have new construction, but we’re not overbuilding,” Suggs with NAI Highland said.

In the last year about 228,000 square feet of retail space became available locally. About 115,000 square feet were absorbed in that period and the vacancy rate is 4.9%, he said.

More office space was vacated in the area over the last 12 months than was occupied, with a vacancy rate of 11.6% and only 57,800 square feet of office space delivered in the last year.

This “negative absorption” increased vacancy, but the lack of new construction is helping stabilize the market, Suggs said.

The city has not built new office space to market at a significant rate in the last 20 years, he added. But because Colorado Springs is home to so many federal contractors who did not leave their offices during the pandemic, it helped insulate the local office market from a steep decline as many employees began working remotely.

Overall, Colorado’s commercial market remains desirable.

“Companies want to be here, people want to live here, so there is going to be demand for us to build new things,” he said.

Colorado Springs, El Paso County economy

The real estate surge Colorado saw in the years leading up to and during the pandemic is over, said DJ Summers, the director of communications and research operations for the nonprofit research organization Common Sense Institute.

More people are now moving out of Colorado than are moving in, and in-migration levels remain at or slightly below average.

“It is no longer a foregone conclusion that our economy is going to overheat just because people want to move here,” he said.

The cost of living throughout the state is becoming increasingly more expensive as housing costs, tax obligations and general inflation rise.

“The expense of Colorado is starting to eke into household budgets. This is no longer something (residents) can absorb. It’s real spending power they’re losing. It will probably be reflected in the housing market, even though the housing market in Colorado is already much more heated than it was 10, 15 years ago,” Summers said.