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olorado Springs' real estate landscape is poised to remain relatively stagnant in 2025, as economic uncertainty and fluctuating interest rates continue to impact the market. Industry experts gathered at the Great Wolf Lodge for the Southern Colorado chapter of the Institute of Real Estate Management's annual forecast breakfast, where they shared insights on the state of national, state, and local real estate.

    A perfect storm of inflationary pressures, rising construction costs, and limited land availability has contributed to a housing shortage in El Paso County. This scarcity has driven up prices, making it increasingly difficult for homebuyers to enter the market. According to Tiffany Lachnidt, a longtime Keller Williams Premier agent, "The lack of affordability has gone from being tight to completely unaffordable." Townhomes and condominiums have become particularly unattainable due to skyrocketing HOA dues and interest rates.

    Despite these challenges, consumers remain optimistic, and home sales continue to occur. Lachnidt notes that "Homes are still selling... We've seen a lot of consumer positivity and a little bit of correction on pricing." However, the market's stability relies heavily on controlling interest rates and finding ways to build equity for buyers.

    In contrast, the commercial real estate market is showing signs of resilience. Jim DiBiase, a veteran broker with Olive Real Estate Group, points out that construction costs are stabilizing, interest rates have decreased, and consumer spending remains steady. The office market is strong, driven by employers rolling back remote work arrangements, but faces challenges from a lack of new inventory.

    The industrial market is the most robust in Colorado Springs, with a 3.8% vacancy rate. However, smaller businesses struggle to find affordable spaces due to high interest rates and increasing construction costs. The retail market remains healthy, despite limited new construction.

    Meanwhile, the apartment market has seen an influx of available units, leading to a spike in vacancies and a drop in average rents. Despite this, demand for apartments remains high, with about 3,700 units already filled. As Kevin McKenna from CBRE notes, "The bubble of supply is behind us... If this absorption keeps up, we'll be back to normal here starting probably early next year."