The Springs housing market carries over into the new year.

Last year’s second-half slowdown in Colorado Springs’ housing market continued as the calendar flipped to 2023: Sales tumbled last month, prices were stagnant, and the pace of construction plummeted, according to a pair of new reports.

A Pikes Peak Association of Realtors market trends report for January showed single-family home sales totaled 739 last month, down 30.2% from January 2022 and the eighth straight month sales have fallen on a year-overyear basis. Most of those sales, whose transactions were handled by association members, took place in El Paso County.

Sellers also are finding it’s taking much longer to find buyers, the Realtors Association report showed. In January, homes spent an average of 50 days on the market before selling, more than three times longer than the 15 days in January 2022.

At the same time, the median price of single-family homes that were sold in January was unchanged from a year earlier at $445,000. That’s a turnaround from the past few years, when double-digit percentage gains in home prices were the norm.

Buyers also have more choices. The supply of homes for sale nearly tripled to 1,639 in January from the 551 homes listed in the same month last year, according

to the Realtors Association report. Though inventory jumped, it remained historically low; before the Great Recession, January listings regularly topped 3,000.

On the new home side of the market, builders pulled 117 permits in January to construct single-family, detached homes in El Paso County, a Pikes Peak Regional Building Department report showed. January’s total fell by more than two-thirds from the 370 permits issued in the same month last year.

The housing market cooldown is a radical departure from the past several years, when mortgage rates had fallen to 3% and below for 30-year, fixed-rate mortgages and fueled a furious demand for housing in Colorado Springs and nationwide.

That demand, along with a housing shortage, created a booming seller’s market; homeowners routinely received multiple offers at thousands of dollars over their asking price, and homes often sold within days — if not hours — after they hit the market.

But after the Federal Reserve raised interest rates last year in an effort to cool inflation, mortgage rates followed. By the end of 2022, 30-year, fixed-rate mortgages averaged 6.42% after starting the year at 3.22%. On Thursday of this week, long-term rates stood at 6.09%.

The increase in rates last year priced many would-be homeowners out of the market, which triggered declines in buying, selling and building.

Though the housing slowdown continued in January, some real estate industry members aren’t panicking and say the market hasn’t careened off a cliff.

Buyers still are getting used to mortgage rates in the neighborhood of 6%, which remain relatively affordable when compared with double-digit rates in the 1980s, said Randy Case, a longtime Colorado Springs real estate developer and this year’s Pikes Peak Association of Realtors board chairman.

“Anytime we go through these cycles, we’re going to have ups and downs, in both availability of housing and availability of financing,” Case said.

“People are still getting accustomed to a significantly different interest rate market than we have seen in the last few years.”

Even with the increase in mortgage rates, however, the interest in housing hasn’t gone away, he said.

Colorado Springs remains a desirable place to live, and its population continues to grow, Case said.

The nation’s Olympic and Paralympic movements and the Department of Defense will continue to have a significant presence in the Springs, while the economy is growing, such as December’s announcement of at least 600 new jobs by a Massachusetts company that supports the semiconductor and other high-tech industries, he said.

“There’s significant demand, people still need housing and people still need to sell housing,” Case said. “There’s going to be transitions and moves, for people to move around. It’s just going to happen.”

And because of that demand, don’t expect a sharp reduction in home prices, Case said.

“People who are really ready to make a change will still need to make a change,” he said. “And I don’t think they’re going to dramatically see price deflation. I just don’t see that happening. Historically, it hasn’t happened.”