Pikes Peak Region • An Interactive Essay

Can This Market Be Fixed?

Everyone has a fix. Cut interest rates. Let prices crash and reset. Stop printing money. Wait it out. I hear a version of one of these in most serious conversations about housing, and each one contains real logic. Each one also contains a trap, and the traps are not opinions. They are arithmetic.

My view, stated plainly: this is a knot, not a dial. Every lever someone proposes to pull is connected to the thing they are trying to protect. This page walks through the three most popular fixes, then hands you the levers. The simulator below runs on real numbers: roughly 180,000 closed sales in the Pikes Peak region since 2015, the actual median price paid and prevailing mortgage rate for every purchase year, current median income, and today's market. Pull the levers yourself. See if you can untie it.

Fix one: cut rates

The most popular fix, and the most self-defeating. Housing is a payment-clearing market: buyers shop a monthly number, not a price. Drop the rate from today's 6.44% to 4.5% and the same monthly payment services about 24% more loan. Give every buyer in the region 24% more purchasing power at the same time and they do not pocket the savings. They bid it into prices, against each other, at the open house. We ran this experiment in 2020 and 2021. The payment stayed roughly constant. The price did not.

Rate cuts do accomplish one thing the simulator will show you: they unlock sellers. Most of the region's 103,000 locked-in owners bought at rates between 3% and 4.6%, and a move toward 4.5% frees nearly all of them. More inventory is genuinely good. But the buyers those cuts create arrive faster than the sellers they free.

Fix two: let it crash

The thought is a 2012 do-over: prices drop 20%, disciplined savers buy the dip, balance restored. The record says otherwise. Credit is procyclical: banks tighten lending standards during price declines, precisely when the buying opportunity appears. In the last crash, first-time buyer share fell while all-cash and investor share rose. The people who bought the 2012 bottom were, overwhelmingly, the people who did not need a bank.

And there is a newer problem. A 20% decline today submerges the median buyer from every purchase year since 2022: roughly 56,000 households in this region alone who would owe more than their home is worth. Buyers from 2021 and earlier survive on equity cushions. The crash this thought requires lands almost entirely on the newest, youngest, most leveraged owners: the exact people it claims to help.

Fix three: freeze the money

Stop expanding M2 and let the system find honest prices. Here is the inconvenient part: we ran this experiment too. The money supply contracted in 2022 and 2023, the first sustained contraction since the 1930s. Housing did not crash. It froze. Volume fell by a third, prices went flat, and the adjustment rerouted into channels nobody watches: inflation quietly took 11% off real values while sellers handed back $25.7M a quarter in concessions. A crash needs forced sellers. An equity-rich, locked-in market produces none. You cannot liquidate a market that refuses to transact.

Now you try

The simulator holds the real cohorts: what the median buyer paid each year since 2015, at what rate, and how many closings there were. The toggle matters most. With it off, prices hold still while you move rates, which is how most people accidentally imagine the market works. With it on, prices respond to purchasing power the way this market actually behaved in 2020, 2021, and 2022.

Assumptions, in the open: 30-year fixed, 10% down, property tax at 0.52% of value, $3,000/yr insurance. Vintage cohorts use each year's median close price and median prevailing rate from roughly 180,000 Pikes Peak MLS closings, 2015 to mid 2026, scaled to current ownership (84% hold rate for 2015-2021 vintages, matching assessor parcel counts; 95% for newer). "Underwater" evaluates the median buyer of each year: loan balance amortized to today against the home's simulated value. "Rate-locked" means today's rate exceeds the owner's rate by more than 1.5 points, the threshold where refinancing or moving historically pencils. "Market responds" applies 60% pass-through of payment-parity price capitalization; the true figure is debated, and you are welcome to consider it conservative. Income: El Paso County median household, ACS via FRED. This is a model for reasoning, not a forecast.

What the simulator will not tell you

Play with it long enough and a pattern emerges. Every fast lever breaks something it claims to protect. Cut rates and affordability barely moves while prices jump. Crash prices and you strand tens of thousands of recent buyers to benefit whoever holds cash. Freeze the money and the market simply stops trading, which is where we have effectively been since 2022.

Then try "do nothing" and watch the years-to-workable number. Flat prices and ordinary income growth untie the knot in roughly five years: no crash, no bailout, nobody underwater. Stretch income growth to 4% and it happens faster. That is not a policy anyone campaigns on, because its slogan is "hold still and let wages compound," and its results arrive one quiet quarter at a time. The market is already running this play: real prices down 11% since 2022 while nominal prices stood still.

Where I land, and you are free to land elsewhere: the knot is real, and the sword is fake. Anyone selling a fast fix is selling the part of the arithmetic they like. The honest answer is that the only lever that works without a boomerang is the one nobody controls from a podium: time, wages, and enough new construction to keep the pressure moving in the right direction. Builders paying $17,500 average concessions to move new homes is that lever, working.

What should you actually do with this? If you are waiting for the fix before you act, the simulator's answer is that no cavalry is coming: not rates, not a crash, not monetary reckoning. The market you see is the market. Whether it works for your budget, your timeline, and your five-year plan is a specific question with a specific answer. Run your numbers, not the market's.

Data: Pikes Peak MLS closed transactions 2015 to 2026 (ELEVATE MLS), monthly market metrics, El Paso County median household income (ACS via FRED), 30-year rates (Freddie Mac PMMS). Cohort ownership scaled to El Paso County Assessor parcel analysis. Related: The Rate Lock-In Effect, The Correction You Couldn't See, Q2 2026 Seller Concessions Report.