January Economic Update: Key Trends in the Pikes Peak Housing Market from UCCS's Economic Director Dr. Bill Craighead

As we move further into 2025, the Pikes Peak housing market continues to evolve, reflecting trends in sales, listings, affordability, and economic factors such as remote work and household formation. Understanding these shifts can help buyers, sellers, and investors make informed decisions. Let's dive into the latest data.

Sales and Listings: A Shifting Market

Home sales in the Pikes Peak region have followed an interesting trajectory. Sales in the final months of 2024 outpaced those from the previous year, indicating renewed buyer activity. However, active listings remain elevated compared to prior years, which suggests that inventory is more robust than in previous low-supply conditions. This could lead to increased competition among sellers and potentially more negotiation opportunities for buyers.

Remote Work & Household Formation: Impact on Housing Demand

The accelerated rise of remote work has had a lasting effect on housing trends. While work-from-home rates surged in 2021, they have slightly tapered but remain significantly above pre-pandemic levels. In 2023, 16.7% of Pikes Peak residents worked remotely, higher than the national average of 13.8%. This trend continues to influence buyer preferences, with demand for home office space remaining strong.

Additionally, household formation has grown steadily, particularly between 2020 and 2022, contributing to long-term housing demand. As more people form independent households, the need for housing in Colorado Springs and the surrounding areas remains strong.

Colorado Springs & Remote Work: National Rankings

Colorado Springs ranked 42nd nationally among metro areas for remote work, with 16.7% of its workforce operating from home. Comparatively, Boulder, Denver, and Fort Collins rank significantly higher, indicating a strong work-from-home culture along Colorado’s Front Range. This could suggest increased regional market integration, where housing and labor markets intertwine across city lines.

House Prices: A Stabilization Period

From June 2022 to June 2024, home prices in the Pikes Peak region remained relatively stable, with only a 0.1% increase. This contrasts with the national housing market, which saw a 5.5% increase in the same period. The stabilization suggests that while housing demand remains steady, increased inventory and economic conditions have tempered price growth.

Building Permits: A Tale of Two Markets

Building permits tell a complex story. While single-family permits have seen a slight rebound (+6.7%), multi-family construction has dropped significantly (-60.9%). This dramatic decrease in multi-family development has led to an overall reduction of 23.5% in total permitted units. This could signal fewer new rental housing options coming to market, potentially tightening the rental market.

Affordability: A Challenge for Many Buyers

Affordability remains a concern, with buyers in the Pikes Peak region needing approximately 42.9% of their median income to afford a home at the median price. While this percentage is slightly lower than national figures, affordability is still a significant challenge, particularly when considering mortgage rates, property taxes, and insurance costs.

However, one positive indicator is the price-to-income ratio. While still elevated, incomes have been rising at a steady 4% per year, meaning that stagnant or slowly rising home prices could gradually improve affordability over time.

Key Takeaways for Buyers & Sellers

• For Buyers: Elevated inventory provides more choices, and price stability offers an opportunity to purchase without the extreme bidding wars of prior years. However, affordability remains a key consideration, making it crucial to explore financing options.

• For Sellers: With more competition in the market, strategic pricing and home presentation are more critical than ever. Marketing strategies should highlight unique property features that align with current buyer preferences, such as home office spaces.

• For Investors: The decline in multi-family permits could create upward pressure on rental prices, making single-family rental investments attractive in the coming years.

The Pikes Peak housing market continues to adapt to economic shifts, and staying informed is key. Whether you're considering buying, selling, or investing, understanding these trends will help you make the most of the current market conditions.

This report is based on insights from the UCCS Economic Forum Dashboard Report presented by Dr. Bill Craighead to real estate professionals in Colorado Springs, CO.

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