Recently, Korean families looking at homes in Colorado Springs have been saying the same thing: when a property they like comes on the market, it doesn't last a few days before a contract is signed. In fact, this area has been experiencing a shortage of available homes for several years, largely due to the lock-in effect, where existing homeowners who secured low-interest loans during the 2020-2021 period are reluctant to sell now that interest rates are high. This trend is seen nationwide, but in Colorado Springs, the unique demand factors related to defense and the aerospace industry make the shortage feel even more pronounced.

According to Zillow's Home Value Index (ZHVI), the average home value in Colorado Springs is $450,850, which has decreased by 2.0% over the past year as of 2026. In simpler terms, this means that the prices that surged after the pandemic are now experiencing a gradual correction. However, the decline varies by neighborhood; for instance, the Northwest area saw only a 0.6% drop, while the 80903 area experienced a decrease of nearly 3.1%. Source: Zillow Home Values, as of 2026.

So, is Colorado Springs currently a buyer's market or a seller's market? According to Redfin data, the average time to close a sale is around 55 days, and properties are selling for about 98.82% of the asking price, indicating that it is not entirely tilted toward buyers yet. There are differing opinions on inventory levels; one analysis suggests a tight supply of 1.34 months, while another indicates an increase to 3.8 months. Considering that a balanced market is typically defined by a 6-month supply, it appears that there is still a slight advantage for sellers. Source: Redfin Colorado Springs Housing Market.

Despite price adjustments, the demand in this area remains strong due to the local economic structure. The defense, aerospace, and aviation industries account for over 40% of Colorado Springs' economy, and recent developments, including a $250 million space operations facility and the relocation of related agencies, are expected to create over 5,700 jobs in the region. Source: Colorado Springs Chamber and EDC, SoCo Digest.

For families looking for preferred school districts, it's worth noting that areas with ongoing job growth tend to support demand for school districts as well. However, school district ratings can change frequently, even when referencing metrics from GreatSchools or Niche, so if you have a property in mind, be sure to verify the assigned school for that address before signing a contract.

Families considering a move to Colorado from other states should also take into account that property tax and homeowners insurance systems differ from places like California or Texas. While Colorado's property tax rate is generally lower than the national average, the assessment methods and rates can vary by county, making simple comparisons based on previous residences potentially misleading.

If you're approaching this as an investment, it's common to use the cap rate, which is calculated by dividing net operating income by the purchase price. Typically, this ranges from 4% to 10%, and the 1% rule, which suggests that if monthly rent is more than 1% of the purchase price, cash flow is likely to be positive, is a widely used screening tool. However, rather than relying solely on these two metrics, it seems more realistic to also consider the cash-on-cash return, which reflects annual cash flow relative to the actual investment. Source: BiggerPockets Investment Metrics Guide.

As of July 2026, the average interest rate for a 30-year fixed mortgage is around 6.6%. Source: Freddie Mac PMMS. As long as rates remain at this level, existing low-rate borrowers will have little incentive to sell, suggesting that the shortage of available homes may continue for the foreseeable future. If you're considering investing, it's important to assess risks such as excessive leverage, interest rate fluctuations, property tax reassessments, vacancies, and underestimating maintenance costs.

Ultimately, while Colorado Springs is experiencing a gradual price correction, the combination of low inventory and a strong employment base suggests that whether you're a resident or an investor, it may be safer to approach the market by considering school districts and local industry trends rather than rushing in. This article is not investment or legal advice, and it is recommended to consult with real estate and tax professionals before proceeding with any contracts.