What a Recession Means for Colorado Springs Real Estate

Here’s What a Recession Could Mean for the Housing Market

Recession talk is all over the news, and the odds of a recession are rising this year. And that leaves people wondering what would happen to the housing market if we do go into a recession.

Let’s take a look at some historical data to show what’s happened in housing for each recession going all the way back to the 1980s.

A Recession Doesn’t Mean Home Prices Will Fall

Many people think that if a recession hits, home prices will fall like they did in 2008. But that was an exception, not the rule. It was the only time we saw such a steep drop in prices. And it hasn’t happened since.

In fact, according to data from CoreLogic, in four of the last six recessions, home prices actually went up (see graph below):

So, if you’re thinking about buying or selling a home, don’t assume a recession will lead to a crash in home prices. The data simply doesn’t support that idea. Instead, home prices usually follow whatever trajectory they’re already on. And right now, nationally, home prices are still rising at a more normal pace.

Mortgage Rates Typically Decline During Recessions

While home prices tend to stay on their current path, mortgage rates usually drop during economic slowdowns. Again, looking at data from the last six recessions, mortgage rates fell each time (see graph below):

So, a recession means mortgage rates could decline based on the data. While that would help with affordability, don’t expect the return of a 3% rate.

The answer to the recession question is still unknown, but the odds have gone up. But that doesn’t mean you have to wonder about the impact on the housing market – historical data tells us what usually happens.

🏞️ What a Recession Really Means for Northern Colorado Springs

If you're a homeowner or prospective buyer in 80921, 80908, or 80132, you’ve likely seen the headlines about a possible recession and wondered what it could mean for our real estate market. Let’s unpack how our local market typically performs during times of economic uncertainty—and what you should keep in mind as national news continues to dominate the conversation.

📈 Local Housing Has Proven Resilient—Again and Again

While most public data only tracks back about 10 years, here’s what we know: the Northern Colorado Springs housing market has consistently exited economic downturns stronger than before. During the 2020 COVID-era recession, for example, the median sales price in our area jumped from $530K in April 2020 to $754K by April 2024—a nearly 35% increase.

That resilience is no accident. Our region offers a desirable mix of lifestyle, stability, and opportunity:

A strong military and defense presence

Proximity to outdoor recreation and natural beauty

A high quality of life in a globally recognized city

Tight-knit, sought-after neighborhoods with limited turnover

This foundation makes our market more insulated from national economic swings than many others.

🤔 What Local Buyers and Sellers Are Saying Right Now

Yes, there’s concern—but not panic. Both buyers and sellers in our market are aware of the headlines and adjusting expectations accordingly:

🛑 Buyers are cautious due to high prices, higher mortgage rates, and inflation impacting affordability. However, many still want to get into the market before prices rise further.

✅ Sellers are considering listing now to lock in their equity gains—just in case broader economic trends create headwinds in the next 6–18 months.

🏡 What You Shouldn’t Expect

Even if we enter a recession this year, a housing crash is highly unlikely in our market. Prices here are driven more by local demand, limited inventory, and long-term desirability than short-term economic cycles.

What may happen is this:

Mortgage rates could drop modestly, as they have during most past recessions.

Higher-end homes may soften slightly due to smaller buyer pools.

Price appreciation may slow, but home values are still expected to rise modestly in 2025 (estimated 1–3%).

💬 Local Expert Advice: Timing the Market is a Myth

Too often, buyers wait for a lower rate only to find that home prices have risen—or that the perfect home is gone. Similarly, sellers hoping to “hit the peak” may hold out too long and lose momentum.

Here’s my advice:

Buy when your monthly payment fits your lifestyle and your needs.

Sell when your financial situation or life circumstances call for a move.

Partner with a trusted local expert who can help you focus on what matters here—not just what’s making headlines nationally.

If your real estate advisor isn’t tailoring their guidance to your unique situation, it’s time to find someone who will.

📩 Ready to talk through your plans with a local expert who puts your goals first?

Let’s connect and discuss how today’s market impacts your next move—not just in theory, but right here in Northern Colorado Springs.