Since 2019, rising home prices in Colorado Springs have priced out many buyers, sending unsold properties into the rental market and fueling an oversupply that’s weakening demand for both rentals and homes for sale.
The number of active listings of homes for sale jumped about 275% from 1,305 in October 2019 to 4,897 last month.
“It's a hard market, and everybody feels it,” Colorado Springs real estate agent Patrick Muldoon told Homes.com.
“I think part of it is that the buyer pool seems to have dropped considerably” since the COVID-19 pandemic, Muldoon said. That's both individual and corporate buyers.
Affordability is playing a role.
Homes.com data shows that in October 2019, the median sales price for all housing in Colorado Springs was $345,000. Last month, it was $450,000, a 30% increase.
“I think a lot of sellers now are beginning to understand that the market is not shifting in their favor,” Muldoon said.
Feeding a saturated rental market
Many homeowners who intended to sell are unable to do so, particularly those who purchased in 2022 and now find themselves capped by current prices, Muldoon said. These sellers often cannot lower their asking price without incurring a financial loss.
Muldoon said the for-sale inventory increase in recent years could also have something to do with homeowners finally listing their homes after waiting for the market to shift.
Homeowners of properties that are sitting longer on the market are now resorting to renting them out, Muldoon said.
This "is just adding inventory in the rental market at a time that we have plenty of inventory in the rental market,” he said.
In the fourth quarter of 2019, there were 43,158 apartment units in the city, and in the third quarter of 2025, there were 57,900 — an increase of 34%, according to CoStar data (CoStar is the parent company of Homes.com). Some 2,400 apartments have been added to the market in the past year.
“New supply has outpaced demand in nine of the past 12 quarters,” said Jeannie Tobin, Denver-based director of market analytics for Homes.com. And since the start of 2022, the rental vacancy rate has more than doubled to 13.4%, which is a record high for the city's apartment market.
“Rentals are brutal,” Muldoon said. The influx of for-rent properties is softening demand, creating a cycle in which consumers are torn between renting and buying, further complicating the market dynamics. Now, purchasing a home could cost around $3,500 per month, while renting one in the same neighborhood might only be $2,500, he said.
In his 30-year career, Muldoon hasn’t seen this level of disparity between buying and renting in Colorado Springs.
“Where the rental market has really shifted now is we're starting to see incentives in the rental market that we've not seen in 10 or 15 years," he said. “The apartment world is now offering three months' free rent, $200 security deposits … all of that.
To compete with apartments, the single-family rental market is offering those incentives as well, Muldoon said. “We're starting to just drop the rents $100 to $200 a month to get people into it. There's just not a lot of people looking at rentals right now."
Buyers have the upper hand
Colorado Springs remains a buyer's market, according to Denver real estate agent Jay Gupta of Equity Colorado Real Estate.
“With ample inventory and softening prices, motivated sellers are increasingly open to negotiation," Gupta said in a statement. "Combined with easing interest rates, conditions are favorable for buyers seeking opportunities before winter.”
Muldoon said homes need to be priced aggressively and presented as the best option in terms of condition and value.
People aren’t confident in the market at the moment, he said.
“Fannie Mae announced a recent poll suggesting 70% of consumers feel it’s a terrible time to buy. That is an issue for housing. As the economy continues to struggle, housing is also feeling that pain. Hopefully, we get some relief soon."