Concentration of real estate agents in Colorado Springs is 3 times higher than the national rate (2024)

Last year’s Halloween party hosted by the Pikes Peak Association of Realtors seemed a little spookier than usual.

Many attendees who had enjoyed the festivities the year before were missing, noticed Patrick Muldoon, president of real estate firm Muldoon Associates, with offices in Colorado Springs and Pueblo. It’d been a rough year, of course, for the industry nationwide. High interest rates had kept potential buyers and home sellers on the sidelines.

But Colorado Springs has felt the pain more than most — or at least by those hired to help buy or sell a house. The concentration of real estate agents in and around the city is three-times higher than the U.S., according to federal labor data. That means there’s more competition to represent owners or buyers for the slim number of houses on the market. Some agents probably couldn’t justify the event’s $66 ticket price, especially in a year when the number of houses sold dropped 25%.

“Realtors were feeling the pressure and were being much more careful with their spending is how I would put that,” said Muldoon, whose firm has sponsored the party for the past two years.

The ebbs and flows of active real estate professionals often mirror how the residential real estate market is doing. And the local market continued to feel strained in April, posting a new April low of just 860 homes sold. That’s about one-third fewer than five years ago.

The impact on Pikes Peak Association of Realtors membership, which is down 4.2% from a year ago, is noticeable but at 4,247 members today, that’s within the normal range, said Gordon Dean, PPAR’s board chairman.

“That number of 4,200 to 4,400 has been pretty consistent for almost the entire time I’ve been in real estate, for 20 years,” Dean said. “There are times we’ve had 6,000 and times we’ve had 4,000. But if you average it out, it’s going to be around 4,500 the whole time. I just think that’s the number that supports the amount of business.”

PPAR did not have data from past years available. Its “About Us” page mentions it has “4,700+ members,” which is a 9.6% decline from when the page was updated in mid-2022, according to the Internet Archive.

Nationwide, the number of Realtors, so named for their membership with National Association of Realtors, has also dropped from 2022 when the pandemic fueled home sales. NAR was down to 1,509,195 members as of April 30, a 2% drop from a year ago, the organization said. According to a report in Real Estate News, eight states including Colorado had year-over-year membership declines exceeding 5%.

Why Colorado Springs?

Colorado Springs still has an outsize share of real estate agents. The Bureau of Labor Statistics tracks what it calls location quotients, or the concentration of different occupations within a region compared to the U.S. in its Occupational Employment and Wage Statistics.

The city’s location quotient for real estate agents was 3.05 compared to one agent in the U.S., according to the most recent report using May 2023 data. That ranks the city at 11th nationwide for highest concentrations of real estate agents. Florida metro areas took the top spots.

Bill Craighead, an economist and executive director at the UCCS Economic Forum, noticed the region’s high concentration of agents while trying to figure out why recent job growth numbers for the area seemed weak in the first quarter of this year.

“I think it’s reasonable that we are finally seeing some of the effects of higher interest rates in hitting the labor market,” Craighead said. “In Colorado Springs, our local economy is going to be more sensitive to interest rates than a lot of other places because we have so much real estate activity. It’s not just growth, but we have really high population turnover. If you look at the share of real estate agents in our local labor force, it’s three times the national rate.”

The region, home to several military installations, has 5.9% of its population in the armed forces. That’s led to stats that show Colorado Springs has nearly twice the rate of newcomers moving from other states compared with Denver. According to the U.S. Census, 6.6% of the metro Colorado Springs population lived in another state a year ago, compared with 3.5% in metro Denver.

Dean, who estimated that 20% to 30% of real estate sales each year is military related, pointed to something he calls PCS season, short for permanent change of station, when members in the military get orders to move.

“It usually hits in June but we’re seeing that more activity is starting in April,” he said. “That always helps our market.”

Additionally, during the housing frenzy in the pandemic, a lot of newcomers moved to town from Denver or other parts of the state.

“At that time, our median sales price was $300,000 and their (Denver’s) median sales price was around $600,000. So a pandemic hits and everybody wants to move and no one has to live in Denver anymore. It’s too expensive,” Dean said. “They sell their house in Denver, which sold in about a second with no inspection and no appraisal, and they bring all that equity down to Colorado Springs, where they were paying 20, 30, 40 and 50k above the list price.”

According to the state Division of Real Estate, which regulates licensed real estate professionals, the number of active agents in Colorado peaked at 44,710 licensed professionals in July 2022. That number has since dropped by about 2,000 active licenses, according to a search of the division’s license database.

The Denver area dominates in terms of volume, with 11,000 agents. Greenwood Village ranked second with 4,440, and Colorado Springs had the third largest number of licensed agents, at 3,127, according to data from the state regulatory agency. Agents, of course, aren’t limited to working within their city limits. And not all are Realtors. Local Realtor associations only represent dues-paying members and the Pikes Peak association includes Realtors in El Paso and Teller counties.

The division also added a new feature in its database to search who is licensed to sell real estate in Colorado. You can search for licenses that have expired, which listed 9,756 records Wednesday. That option came from a request from a local Realtors’ association seeking to compare their membership to the expired list, a division spokesman said.

Too many agents or just enough?

But beyond the high concentration of agents in Colorado Springs, it’s really about the job in general. According to the national association, the typical Realtor works part-time with just a couple transactions per year. Many have a second job or a second source of income. The longer one remains dedicated to the business, the more money they’ll make, statistically. NAR’s survey found that Realtors with less than two years of experience earned a median gross income of $9,600, while those with 16 or more years made $80,700.

“We have an overabundance of agents available (but) well over 50% of agents do zero or one transaction a year,” said Scott O’Connor, who owns Re/Max Advantage in Colorado Springs with wife and broker Traci.

Many feel the tough housing market has more to do with higher interest rates than the number of agents in town. There has been a lack of new listings, though April did have more houses put on the market compared to a year ago, as noted in the chart below.

As mentioned, April was one of the lowest sales months in years, for an April. With just 860 houses sold in El Paso County, that’s down from the pre-pandemic period when April regularly had 1,100 to 1,200 houses sold in the county.

Houses are still selling, Muldoon said, but mostly to buyers looking for nicer, more expensive homes, which is why the median price went up. The entry-level houses are overpriced. Muldoon said he listed a house for $850,000 and got multiple offers. One he listed at $770,000 was under contract in seven days. But a nice little house listed for $430,000 has been on the market for six weeks. And there still aren’t enough houses on the market available for sale.

“I think the elephant in the room with the numbers isn’t that we’re at an average (number of Realtors). It’s that we’re selling so few units that it’s hard to justify being at this average when your unit count just keeps contracting every month,” Muldoon said. “We’re sitting at levels of sales that we haven’t seen since 2012, 2013. And if you went back to that time period, I would guess we were around 3,000 agents. But I don’t know that for sure.”

PPAR had 2,654 members in 2013, the Colorado Springs Business Journal reported.

Muldoon’s sense is that Realtors decided to stick it out because the Federal Reserve had hinted that they would lower interest rates in 2024, leaving many feeling housing would boom once again.

“I think a lot of people renewed on that hope,” Muldoon said, but added, “I don’t have any proof of that. I talk to a lot of Realtors and they are absolutely suffering. They are not selling. They do have part-time jobs. … And I think a Realtor who already paid their dues … you’re committed for the year and you’re going to hang in there.”

Back to the basics

O’Connor doesn’t sell anymore but manages his company, which has about 80 agents in the Colorado Springs area. He has a franchise with Re/Max, which was named franchise of the year and that’s helped him attract top agents, he said. There’s a similar work ethic and philosophy. Agents share questions on an internal Facebook page to help each other find resources for their clients.

“In many cases your first transaction with a client is the start of a long-term relationship,” O’Connor said. “The number of options that any client has are just far above and beyond what they were 10 years ago so staying in front of mind with your clients and being available to offer them a resource, whether it’s finding somebody to help them blow out their sprinklers or have their house painted is a key way of just building your value and maintaining a presence with with your client.”

One of his agents is Michelle Gutschick, who became a Realtor just before the pandemic hit so she doesn’t know what it used to be like. But 2021 — what a year, she said.

“It was a little exciting and overwhelming and I wondered, ‘Is this normal?’ A lot of agents entered the market in 2021 because it was an easy avenue to step into with business almost falling into your lap,” said the self-described “well-trained introvert” who works in Colorado Springs.

Admired by colleagues for leveraging social media to grow her business, Gutschick says business hasn’t grown at the same rate as 2022, but it’s still growing as she continues to cultivate existing relationships. She’s a former junior high school music teacher so she understands what it takes to teach, coach and engage and stay organized. She uses social media to congratulate past and future clients on big days and when she spots things like their kids got accepted to college.

She’s had client events like music bingo with families and a painting party. She’s thinking of a silent disco event.

“I think there’s plenty of business for anybody who wants to do business. If you look at the numbers and get into the weeds a little bit, you’ll find that a quarter of them don’t do any (sales) and then another quarter maybe do one or two transactions a year,” she said. “It’s like the old 80/20 rule where 20% do 80% of the work. I don’t really worry about it. I figure if I put my nose to the grindstone and work and meet people and be part of the community, honestly, there really is enough work.”