Hello and greetings from Colorado Springs! My name is Lance Kohler, and I’m the managing broker for the Cornerstone Real Estate Team. Today, I’m providing a market update for October 2024—something I’ve been intending to do for the past six months, and here it is!
First, I want to reflect on where we’ve been over the past couple of years before diving into the current market trends and what they mean for property owners and tenants alike.
The Market in 2021-2023: A Frenzied Period
In 2021 and 2022, we experienced what I can only describe as a crazy market. Demand for rental properties was exceptionally high, while inventory was extremely low. Properties were leasing in just 3 to 5 days, and in some cases, we received applications before tenants even toured the property.
During this time, rental prices skyrocketed:
Market comparables couldn’t keep pace with real-time rental demand.
If comparable rental rates suggested $1,500/month, we could list at $1,700 or $1,800 and still receive multiple applications.
Renewing tenants often faced rent increases, sometimes $100-$300 per month, as the market dictated.
This trend continued into early 2023, marking nearly a decade of consistent rent increases.
The Market in 2024: A Shift to a Tenant’s Market
Fast forward to today—the market has shifted significantly. Rental inventory is up, demand is down, and rent growth has slowed or even reversed in some cases.
Key Market Indicators
Inventory Surge
Year-over-year, there are 3,300 more available rentals in Colorado Springs.
300+ single-family homes are currently on the market.
Days on Market (DOM) Has Increased
In 2021, properties leased in 3 to 5 days.
Now, 30 to 60+ days on the market is common.
High-priced or specialized properties take even longer.
Fewer Applications & More Cautious Tenants
Application numbers have dropped.
Showings per property have decreased.
Tenants now compare multiple properties before deciding, something that was rare during the frenzy of 2021-2022.
Why Has the Market Cooled?
Mortgage Rates & Homeowner Behavior
Many homeowners locked in ultra-low mortgage rates (2-3%) and are reluctant to sell or move.
This has added more single-family rental homes to the market, increasing inventory.
Inflation & Economic Uncertainty
Rising costs of living mean tenants are more cautious about committing to higher rents
Lower-priced apartments are sitting vacant longer, forcing landlords to reduce rents to attract tenants.
A Surge in New Development
Massive apartment development has increased competition.
In April 2024 alone, 3,000 new rental units hit the market.
Another 5,000 units are expected to be added by year’s end.
Many of these new apartments offer modern amenities, attracting renters who might have previously considered single-family homes.
What This Means for Property Owners
With high inventory and increased competition, rents are stabilizing or declining. Here’s what owners should consider:
1. Be Competitive on Rent
In some cases, lowering your rent is the only way to attract tenants.
Example: One-bedroom apartments that leased for $850+ are now at $725-$750.
2. Consider Incentives
Many properties now offer move-in specials, such as:
Waived application & admin fees
One to two months’ free rent
A quick Google search of rental incentives in Colorado Springs will show how widespread these offers are.
3. Your Property Must Show Well
With increased competition, tenants have choices.
Ensure your rental is clean, fresh, and well-maintained—deferred maintenance can cost you longer vacancies.
4. Be Flexible with Lease Terms
Avoid unnecessary rent increases for renewing tenants—they know they can find cheaper options nearby.
Being pet-friendly can help—80% of renters in Colorado Springs have pets.
5. Take Your Property Manager’s Advice
The right pricing & marketing strategy is crucial.
If your property sits too long, consider an aggressive rent adjustment.
Final Thoughts
We are now firmly in a tenant’s market. As inventory rises and demand slows, owners must adapt to remain competitive.
For a real-time view of rental availability, I encourage you to check Zillow or explore other property management updates, like those from Dorman Property Management (Colorado Springs) or Grace Property Management (Denver)—they’re seeing similar trends.
I hope this information helps you navigate the shifting market. Thanks for your time!