On or around August 1, 2024, a hailstorm hit Soaring Eagles Townhomes, a community just northeast of Milton E. Proby Parkway and Hancock Expressway. The repair estimate came to $3.6 million. The association's deductible was 10% of insured value, and the board split the assessment across 150 homes. Each owner's share came to $20,752.12.
Many of those owners thought they were protected. According to their attorney, the community's governing documents limited the association's deductible to the lesser of 1% of insured value or $10,000. The HOA argued that Colorado carriers had moved to percentage-based wind and hail deductibles and that a fixed deductible matching the declaration could no longer be bought. As of KOAA's July 2026 follow-up, the lawsuit was still pending and more than 50 mechanic's-lien notices had been filed against properties in the community. None of the claims on either side has been decided in court.
Most buyers will never live through a case like this. Still, it shows what has changed in the Colorado Springs attached-home market. A buyer of a townhome or condo also takes on a share of the association's insurance policy, reserve fund and loan eligibility. In 2026, all three are costing more, and sale prices are starting to reflect that.
Two Segments, Two Different Septembers
The Pikes Peak Association of REALTORS September 2026 report shows how far apart the two segments have moved.
| September 2026 vs. September 2025 | Single-family/patio | Condo/townhome |
|---|---|---|
| Median sale price | $479,000, down 0.1% | $297,000, down 8.9% |
| Active listings | 4,253, up 6.1% | 716, up 10.5% |
| Sales | 926, down 9.7% | 119, down 16.8% |
| Months of supply | 4.6, from 3.9 | 6.0, from 4.5 |
Single-family prices are holding about even with a year ago. Attached homes have more listings, fewer sales and a median nearly 9% lower. The resale-only numbers are steeper still. The existing condo/townhome median fell 10.1% to $281,950, while the existing single-family median sat exactly where it was in September 2025, at $475,000.
Higher mortgage rates affect every buyer the same way. Freddie Mac's average 30-year fixed rate was 7.03% as of September 24, up from 6.30% a year earlier. Rates alone can't explain why one segment held and the other slipped. Three costs that apply mostly to attached homes do a better job.
The Deductible Moves Into the Price
In August 2026, Andrea Warner, chair of the Pikes Peak Association of REALTORS, told KOAA that condo and townhome buyers were facing higher HOA fees, higher insurance costs and financing hurdles. Gazette columnist Tatiana Bailey wrote in early 2025 that Colorado homeowners' insurance costs had risen more than 50% since 2019 and that HOA fee increases were often blamed on insurance.
A percentage deductible works differently from the fixed deductibles many governing documents were written around. A 10% deductible on a community insured for tens of millions of dollars is a seven-figure number. After a large claim, the association collects it from owners. A buyer comparing two townhomes at the same list price may actually be comparing two very different amounts of exposure, and that exposure appears only in the master policy, not in the listing.
When buyers can't price that risk with confidence, the seller usually absorbs it. A larger discount, a longer time on market or a concession at the negotiating table are all ways that unknown cost gets paid.
The Loan Itself Got Slower
The second cost arrives when the loan is underwritten. Freddie Mac Bulletin 2026-C retired the Streamlined Review option for condo projects on mortgages with applications received on or after August 3, 2026. Established projects now go through a full Established Condominium Project review, a Reciprocal Review or, if they qualify, Exempt From Review. The same bulletin requires the project budget to include the highest recommended reserve allocation from its reserve study. For applications on or after January 4, 2027, the minimum replacement-reserve allocation rises from 10% to 15% of annual budgeted assessment income.
KOAA reported that lenders expected the review changes to add seven to 14 days to many condo closings. For military households on a PCS timeline, two extra weeks can decide whether a closing date works. FHA and VA buyers face their own project checks. FHA lends in approved projects, and in some unapproved projects through Single-Unit Approval. Its review looks at insurance, project finances, pending legal actions and physical condition. The VA keeps a public search of approved condominium projects. The two topics are connected. Pending litigation and thin reserves are exactly what these reviews flag, so a community dealing with a large hail claim can become harder to finance as a result.
None of the reporting so far names a Colorado Springs project that has lost eligibility. The pressure shows up as added time and added paperwork, and both reduce the number of buyers who can make an offer. If you're using VA financing, our guides to using a VA loan in Colorado Springs and VA appraisals explain the parts of the process that apply to every property type.
New Homes Now Compete in the Same Price Range
The third cost is competition. Townhomes used to be the entry point for buyers who couldn't stretch to a single-family price. In 2026, builders are offering small new homes in that same price range.
Oakwood Homes' undated Arrival Collection page for Banning Lewis Ranch lists available homes from $256,375 for 704 square feet up to $339,999 for a 1,562-square-foot, four-bedroom plan. In May, The Gazette reported that Classic Homes was marketing cottages of 500 to 800 square feet at $300,000 to $400,000. Builder prices change often, so confirm current pricing with the builder and treat both figures as snapshots.
Eddie Hurt of ERA Shields Real Estate told The Gazette on October 4 that most showings across the region are for listings priced between $300,000 and $400,000. He added that builders on the east side and toward Fountain are offering closing-cost credits and lower in-house interest rates, which makes it harder to sell older existing homes. That price band is where resale townhomes sit, and new construction with builder incentives is competing for the same buyers.
Builders are moving away from townhomes too. The Gazette reported 161 townhomes permitted in the region from January through August 2026, down 32% from a year earlier, while duplex permits rose 142% to 121. Hurt said duplexes may pencil out better because they use less land and share building components. For a broader comparison, see new construction versus established neighborhoods in Colorado Springs.
What "Best Value Sells First" Means for a Townhome
Hurt summed up how this market sorts listings: "Real estate is not first in, first out. In real estate, people cut in line. If something is perceived as a better value, then best value sells first."
With attached homes, a lot of that value depends on the association. Two townhomes with the same layout and finishes can differ on the things that now affect price: the master-policy deductible, the size of the reserve fund, any pending legal action and whether the project clears lender review. The community with clean documents is the one buyers move to the front of the line. A low median can hide very different properties, and the gap between them comes down to paperwork.
That's also where a buyer gets leverage. At 6.0 months of supply in September 2026, sellers of attached homes are competing for fewer buyers. If you do the document review early, you can price your offer around what you find instead of finding it after you're under contract.
Documents to request before you write an offer
- The HOA master insurance policy. Look for the wind and hail deductible, whether it's a fixed dollar amount or a percentage, and how it compares to what the declaration says.
- The most recent reserve study and budget. Compare the reserve allocation with the study's recommendation, since lenders are now checking this more closely.
- Disclosure of pending litigation. Lawsuits involving the association come up in FHA project reviews and in conventional reviews.
- Special assessment history and board minutes. Look for recent large claims, roof replacements or votes on assessments.
- Project eligibility for your loan type. Ask your lender early whether the project works for VA, FHA or conventional financing, and add the extra review time to your contract dates.
Quick Answers
Does a falling condo median mean every townhome is a bargain? No. The September 2026 decline covers the whole segment. Price individual communities on their insurance, reserves and financing status, not on the median.
Do the Freddie Mac changes apply if I'm using a VA loan? Bulletin 2026-C covers loans sold to Freddie Mac. VA buyers work from the VA's own approved-condo list, so check the project there and confirm eligibility with your lender.
Are single-family homes immune to these costs? Single-family owners deal with insurance increases too. They don't share a master policy or an association deductible, and that shared exposure is what separates the two segments in 2026.
When does the reserve change take effect? The 15% minimum replacement reserve applies to applications received on or after January 4, 2027, about three months from now.
If you're comparing a townhome to a small new build, or trying to make sense of an HOA's insurance policy and reserve study before you make an offer, I'm glad to go through the documents with you, step by step and on your timeline. Selling an attached home this fall? A home valuation that accounts for your association's paperwork is a good place to start. Let's Connect with Leslie Neumann.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
