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Colorado Springs Housing Market: Cautiously Optimistic

  //house-home.news-articles.net/content/2026/02/1 .. prings-housing-market-cautiously-optimistic.html
  Published in House and Home on Friday, February 13th 2026 at 23:36 GMT by KXRM Colorado Springs
      Locale: Colorado, UNITED STATES

Colorado Springs, CO - February 14th, 2026 - A comprehensive housing assessment released today reveals a cautiously optimistic outlook for the Colorado Springs real estate market. After a period of explosive growth fueled by in-migration and historically low interest rates, the market is exhibiting early signs of stabilization. However, the report emphasizes that while the pace of price escalation is slowing, the fundamental issue of housing affordability continues to plague the region.

The assessment, compiled by the Pikes Peak Association of Realtors (PPAR) and the City of Colorado Springs' Planning and Community Development department, details a notable deceleration in both home sales volume and price appreciation. While data indicates a slight year-over-year decline in the number of homes sold - approximately 6% compared to the peak of 2024 - the average home price, while still elevated, is experiencing a flattening trend. In January 2026, the median home price in Colorado Springs was $585,000, a 3.2% increase from January 2025, a stark contrast to the double-digit increases witnessed in 2021-2023.

"The market is recalibrating," explains Dr. Emily Carter, Chief Housing Analyst at PPAR. "The rapid, unsustainable growth we saw during the pandemic simply couldn't continue. Rising mortgage rates, coupled with a broader economic slowdown, have naturally cooled demand. We're seeing fewer bidding wars and more properties lingering on the market, giving buyers slightly more breathing room."

However, Dr. Carter cautions against interpreting stabilization as a solution to the affordability crisis. "The problem isn't that prices are falling, it's that they remain dramatically out of reach for a significant portion of the population. The increase in prices over the past five years has far outpaced wage growth, leaving many residents, particularly first-time homebuyers and those with moderate incomes, effectively priced out of the market."

The report highlights a critical imbalance between housing supply and demand. Colorado Springs has consistently experienced strong population growth, driven by its quality of life, outdoor recreational opportunities, and relatively strong job market. However, the construction of new housing units has failed to keep pace. Zoning regulations, lengthy permitting processes, and a persistent shortage of skilled labor in the construction industry have all contributed to the supply bottleneck.

"We're facing a multi-faceted challenge," states Councilman Richard Ramirez, Chair of the City's Housing and Community Development Committee. "It's not just about building more units; it's about building the right types of units. We need a diverse housing stock that includes a significant proportion of affordable and workforce housing options."

The assessment proposes a series of recommendations to address the housing shortage and enhance affordability. These include:

• Incentivizing Affordable Housing Development: Offering tax breaks, density bonuses, and streamlined permitting for developers who incorporate affordable units into their projects.
• Reforming Zoning Regulations: Allowing for increased density in appropriate areas and reducing restrictions on accessory dwelling units (ADUs).
• Investing in Workforce Development: Expanding training programs to address the skilled labor shortage in the construction industry.
• Exploring Innovative Housing Solutions: Investigating alternative housing models such as co-living spaces, tiny home communities, and modular construction.
• Public-Private Partnerships: Encouraging collaboration between the city, developers, and non-profit organizations to increase the supply of affordable housing.

The full assessment is available on the City of Colorado Springs website: [ https://www.coloradosprings.gov/housing-assessment-2026 ]. It also includes detailed data on housing inventory, sales prices, rental rates, and demographic trends.

The coming months will be crucial in determining whether the stabilization trend continues and whether meaningful progress can be made in addressing the affordability crisis. While the market is showing signs of cooling, sustained effort and innovative solutions are needed to ensure that Colorado Springs remains a welcoming and accessible community for all residents.