Colorado Springs Real Estate: 2025 Recap 2026 Outlook

Colorado Springs used to be known as a kind of strange town on the footsteps of the Rockies with a thriving presence of Christian Fundamentalism. Nowadays, although still reliably conservative, the demographics and economic makeup of “the Springs” have completely shifted. With Denver becoming one of the most expensive cities in the nation, people are now looking towards Colorado Springs real estate as a comparatively affordable location, while still offering that Colorado vibe. So what’s been happening and what do the cards hold for 2026? Let’s break it down below.

Looking to get involved in the STR market in Colorado Springs?

Why Colorado Springs is unique

Colorado Springs’s appeal can be found in several different drivers, all semi-interlocking. The city is a government and military contractor hotspot, and hosts the United States Air Force Academy as well as Ft Carson. As the US military budget has continued to balloon, Colorado Springs has benefited immensely. The city is also gorgeous and is based in Colorado, and guess what? Colorado is awesome. It’s lower cost than Denver but still has a semi-urban feel, offering things to do and nightlife that are particularly attractive for remote workers. From an investment standpoint, Colorado Springs is still much more affordable than Colorado’s higher-tier markets, like Denver, Boulder, Golden, etc.

To put things into context, consider this comparison among Colorado’s notable cities:

This chart explains, and quite elegantly, I might add, that Colorado Springs is an absolute steal when you compare it to Denver or Boulder. This difference in price gives you a good shot at great yields, or at least a more comfortable margin when it comes to cash flow.

Market snapshot – 2025

The Colorado Springs housing market has shifted from its pandemic-era sprint to a steadier, more balanced rhythm. The runaway bidding wars of 2021–2022 have cooled, but the underlying fundamentals, job stability, military presence, and migration from Denver keep the city’s housing engine running at a sustainable pace.

According to recent reports, the median home value sits around $446,875, reflecting a ~2.5% decline year-over-year. This figure suggests a mild correction rather than a downturn, a normalization following years of double-digit appreciation.

The median listing price per square foot hovers near $226 as of October 2025, according to the Federal Reserve Economic Data (FRED), signaling moderate price pressure but stable buyer interest. Meanwhile, local brokerage data from Great Colorado Homes shows active inventory at roughly 3,918 homes, up ~15% from last year, and the average time on market has stretched to about 54 days. In simpler terms, homes are selling, but not instantly. Sellers must now price realistically, while buyers have space to negotiate and secure inspection contingencies, a scenario that investors love.

The following dataset summarizes the trend:

What the data means

From a macro perspective, Colorado is going through a classic mid-cycle cooling, not a crash. Although median prices are down, rental demand is as high as ever. This is a key difference. The slight dip in prices is a recalibration following two years of outsized growth that outpaced wage gains and local affordability.

What this means for investors

For investors, the narrative has shifted from “buy fast before it gets pricier” to “buy smart while it’s steady.” The Colorado Springs market offers an attractive balance of affordability and predictability while offering that nice future upside that every real estate investor loves.

Let’s break it down with an example:

Metric	Value
Purchase price	$475,000
Monthly rent	$2,000
Annual gross rent	$24,000
Gross yield	5.0%
Property taxes	0.41% (~$1,948)
Maintenance (annual estimate)	$2,000
Property management (10%)	$2,400
Estimated net yield	3.3–3.6%

Now let’s layer in moderate appreciation, say 2% per year, and you’re looking at roughly $49,000 in equity growth over five years, not including principal pay-down. And unlike Boulder or Denver, where entry prices push yields under 3%, Colorado Springs lets you capture both cash flow and long-term appreciation potential.

A tale of two Springs: 2021 vs 2025

To appreciate the shift, compare today’s conditions to 2021’s frenzy:

So with this transition, we can see more of a shift and maturing into equilibrium. Demand is still exceeding supply, and the rate of absorption is moderate, not like it was before. For landlords and those in the short-term rental game, that’s actually good news. Housing remains tight enough to keep rent growth stable, but loose enough that there are still deals to be had.

Looking ahead to 2026

Assuming mortgage rates stabilize near 6.5% and the Denver migration pipeline remains active, analysts expect Colorado Springs home values to rise ~1–3% through 2026. That’s modest growth, but in today’s higher-rate environment, steady is the new strong. Investors prioritizing cash-flow resilience over speculative appreciation will find this pace sustainable and less volatile than larger metros.

What’s Shaping the Market in 2026

Several factors are simultaneously influencing the Colorado Springs real estate environment:

Interest-rate pressure & affordability

With mortgage rates remaining high (around 6–7% for many buyers), many homebuyers are sidelined. This tends to soften price growth and push inventory up, which increases opportunities for investors who can act with clarity and capital.

Steady rental base

The region’s rental market continues to hold up. Colorado Springs’ median rent is roughly $1,825, with year-over-year growth hovering around 1–2 percent, per Zillow and Apartment List. Vacancy rates have remained tight, around 5.6 percent, according to the Colorado Division of Housing. Military presence plays a huge role. With the Air Force Academy, Fort Carson, Peterson Space Force Base, and Schriever, the Springs sees tens of thousands of active-duty personnel, civilian contractors, and incoming families each year.

Supply pipeline and zoning

New construction has increased, but at a measured pace. Colorado Springs issued about 3,200 new housing permits in the past 12 months, down slightly from the prior year, per the U.S. Census Building Permits Survey. Builders remain cautious due to higher financing and material costs. While new construction is rising, the listing price per square foot suggests there’s still affordability relative to other Colorado markets. Developers are responding, but the pace is moderate, which helps preserve long-term supply constraints.

Cost pressures

Even with modest home-price growth, investors must be aware of rising insurance costs (hail damage, wildfire risk), maintenance expenses, and labor cost inflation for property upkeep. These cost pressures can erode margin if not factored in.

Property taxes & cost of ownership

One of the most investor-friendly features in Colorado Springs is the comparatively low effective property tax rate.

Here’s how ownership cost breaks down for a hypothetical $500,000 property:

Step	Formula	Description
Assessed value	$500,000 × 7.15% = $35,750	The assessment ratio used for residential in Colorado
The assessment ratio used for residential properties in Colorado	$500,000 × 0.0041 = $2,050	Annual property tax (approx.)
Other annual ownership costs	Insurance $1,200 + Maintenance/Reserves $2,000	Typical investor budget

Even though home values are climbing, the lower tax burden compared with some high-tax states provides margin for investors. That said, keep in mind insurance costs can skew higher because Colorado Springs has weather-related risk (hail, wind, wildfire near the foothills).

Short-term rentals & tourism market

From an investment and short-term rental perspective, Colorado Springs is a lot more welcoming than its more liberal municipal counterparts, but there are still some rules and quirks to be aware of.

Regulatory environment

The city of Colorado Springs requires an STR permit for each rental unit. Non–owner-occupied short-term rentals are allowed only in certain zoning districts, so doing due diligence on zoning rules and permit availability is essential before purchasing or converting a property.

Tax burden for STRs

Hosts must collect and remit the combined sales and use tax of roughly 8.20%, with the city portion representing approximately 3.07%. These taxes apply to nightly rates and applicable fees, which means the effective net yield must factor in this added burden.

Tourism demand & occupancy

Colorado Springs’ draw includes Garden of the Gods, Pikes Peak, and easy access to the Rocky Mountains. This results in stronger occupancy during summer months and solid shoulder-season demand. Typical 2–3-bedroom vacation homes commonly achieve an estimated 70–80% occupancy in peak months with ADRs ranging from approximately $180 to $220.

Here’s a sample STR performance:

Investment Case Study: Long-Term Rental Math

Consider a 3-bedroom single-family home in a solid Springs sub-market, purchased for $480,000 and rented for $2,000/month.
Assumptions:

• Purchase: $480,000
• Annual Gross Rent: $2,000 × 12 = $24,000
• Property Tax: ~$2,100 (given ~0.44% effective rate)
• Insurance/Maintenance: ~$1,800
• Property Management: ~$2,400 (10%)
• Vacancy & Reserves: ~$1,200

Metric	Value
Purchase Price	$480,000
Annual Gross Rent	$24,000
Property Tax	$2,100
Maintenance / Insurance	$1,800
Property Management	$2,400
Vacancy / Reserves	$1,200
Net Operating Income (NOI)	~$16,500
Gross Yield	5.0%
Net Yield	~3.4%
Estimated Annual Appreciation (2%)	~$9,600

Neighborhoods to Watch

To refine your investment strategy, here are a few sub-markets in Colorado Springs worth highlighting:

Neighborhood	Typical Entry Price (3-bed home)	Rent Type	Invest in design, market for short stays, factor in cleaning cost
Old North End	$550k+	Mid-term 1-6 mo	Focus on concierge services, furnished units
Briargate	$450k–$500k	Long-term 12 mo+	Family-oriented amenities, stable leases
Downtown / Tejon	$500k–$600k	STR or hybrid	Invest in design, market for short stays, factor cleaning cost
Manitou Springs	$420k–$460k	STR	Maximise off-season events, optimize listing across platforms

Is Colorado Springs the right move for investors?

One thing remains clear: Colorado is awesome. Everyone wants to visit here, which is why Airbnb and STR are so successful, and if you visit enough, you end up living here. Because of this demand, property prices in Denver can seem out of bounds for many first-time homebuyers, migrants to the state, and investors looking for yield. Colorado Springs offers a ripe alternative, and nowadays, it’s not nearly as associated with Focus on the Family.

If you are an investor and you want to get into Colorado, but aren’t sure how, it’s best to have a free consultation.

FAQ

What’s the average property tax rate in Colorado Springs?

The median effective property tax rate in Colorado Springs is approximately 0.41% of market value — significantly lower than many U.S. areas. This offers a favorable ownership cost structure for investors in the region.

How does Colorado Springs compare to Denver for investors?

Colorado Springs has lower median home prices and somewhat lower cost of ownership than Denver, which provides better entry yield potential. However, Denver still offers higher absolute rents, a more appreciable “ceiling”, and stronger global visibility. For investors who prioritize yield and affordability over ultra-rapid appreciation or luxury play, Colorado Springs may be a better value-oriented market.