denver's housing market hit by 'unprecedented' spike in homes for sale
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By Guilia Carbonaro | Published on May 13, 2025
Denver's housing market is undergoing a rapid and dramatic shift as inventory levels have surged to almost double the long-term average for April, marking what an analyst calls an "unprecedented" correction in one of the nation's most expensive noncoastal metro areas.
"What's going on in Denver's housing market right now is unprecedented," Nick Gerli, CEO of Reventure App, wrote on X, formerly Twitter, on May 7. "Inventory just shot up to 99.6 percent above the long-term average for April."
Why It Matters
The current downturn contrasts sharply with the boom that Denver experienced during the pandemic. During that time, housing demand surged as remote work and low mortgage rates drove many to purchase homes across the country, including in Denver. However, as mortgage rates surged as a result of the Federal Reserve's aggressive rate-hiking campaign of 2022 and affordability plummeted, the market began to cool.
Now, Denver's market correction is unfolding as a surplus of homes continues to outstrip buyer demand. Sellers are increasingly forced to lower asking prices to attract buyers, resulting in price cuts across the metro area. Analysts say that if inventory levels remain high, price declines could accelerate.
What To Know
At the end of March, about 10,000 houses and attached residences were listed for sale across the 11-county metro area, according to a report from the Denver Metro Association of Realtors (DMAR). The figure represents a significant increase from the previous April, when fewer than 6,000 homes were available.
"Still-high housing costs in Denver have sidelined many would-be buyers, which has allowed inventory to build up in the metro," Hannah Jones, senior economist research analyst at Realtor.com, told Newsweek.
"Denver's housing inventory has skyrocketed by 64.9 percent over the last year, and is now sitting at its highest level going back to at least 2017," Gerli told Newsweek. "This spike is unprecedented because no other large metro area in America has experienced such a massive spike in inventory compared to long-run norms," he added.
According to the real estate analyst, Denver had a total inventory of 10,345 homes for sale in April, 99.6 percent higher than the long-run average for April of 5,181 listings. "For comparison—the second closest large market (min 1-million population) in terms of excess inventory is Austin at 73.9 percent," Gerli said.
This boom in inventory can be traced back to two factors: reduced demand and an increase in seller listings.
"Seasonally, inventory always rises in the spring through September," Susan Thayer, market trends committee member for DMAR and founder of The Thayer Group, told Newsweek. "In 2025, we saw inventory start to rise on the earlier side of the spring season, hitting higher levels in April," she added.
"Traditionally, the spring also sees an increase in purchases, so much of that increase in inventory is also met with a slight increase in sales. This year, because of elevated mortgage rates, economic uncertainty, rises in homeowner's insurance premiums and rising home values, we are not seeing buyers enter the market as quickly as sellers did," Thayer explained.
"Inventory is elevating, while sales are staying at pre-spring season levels resulting in more inventory of active listings compared to the previous five to seven years."
According to Gerli, "demand has been down in Denver now for the last two years due to high prices and rates, with sales volume about 15 percent below the seasonal norms."
At the same time, the analyst said, "sellers are now listings houses at the highest rate in almost 10 years. The reason sellers are listing could be due an increase in outbound migration and slowing economic growth, as well as the mortgage lock-in effect easing."
Home values in the city are already showing signs of decline, dropping by 0.1 percent over the past year, with March seeing a 0.58 percent decrease. The value drops were most pronounced in Denver County, Arapahoe County and Jefferson County, where prices fell between 0.59 percent and 0.67 percent, according to Gerli.
Despite recent drops, the typical home price in Denver stands at $593,000, a figure that may place immense financial strain on local buyers. With a median monthly mortgage, tax and insurance payment of $3,700—accounting for 42 percent of the median income, well above the long-term average of 29 percent—the affordability gap has become a major barrier to homeownership, Gerli said.
The city has become so expensive in part because of wealthy Californians moving to Colorado, the analyst explained. "Denver received a lot of California transplant buyers over the last 10+ years, with many of these buyers selling their houses in California and buying houses in Denver, driving up prices," he said.
"Moreover, Denver's economy was one of the best performing in the U.S. in the run-up to the pandemic, with a vibrant tech scene and significant job growth, which laid a solid foundation price appreciation."
Prices Falling, but Not Fast Enough
Many locals have been priced out of the Denver housing market in recent years. According to Reventure data, sales activity is now 15 percent below the long-term average and down 30 percent from the peak of the pandemic. That is why inventory levels are rising so sharply.
"The fact that inventory is just stagnating without buyers eating it up, while new listings continue to come to market, is also leading to an increase in total homes on the market at the same time right now," Brandi Wolff, a realtor with Guide Real Estate, told Newsweek.
Reventure's Home Price Forecast Score for Denver now stands at 26 out of 100, the lowest among major U.S. metros, Gerli said, suggesting the city is vulnerable to further price corrections. The ranking reflects not only the excess inventory but also the limited buying power of residents amid ongoing affordability challenges.
In April, home prices were down 4.1 percent year-over-year, the 15th month of annual decline, according to Realtor.com data. "Climbing inventory has taken pressure off of home prices, and the median listing price in April was nearly $100,000 below the market's peak price from May 2022 when inventory levels were roughly a third of today's level," Jones said.
"However, much of this price softening is due to a shift in the type of homes for sale. More small homes for sale means that though the median listing price in Denver is up 14.5 percent compared to pre-pandemic, the median listing price per-square foot is up 44.3 percent compared to pre-pandemic," she explained.
"Underlying home values have not softened substantially which means buyers are getting much less for their money than they did pre-pandemic."
People in Denver, however, are still buying properties, despite the ongoing affordability issues. Even in the face of the recent uptick in for-sale inventory, homes are still selling relatively quickly, Jones said. "The typical home for sale in Denver spent 36 days on the market in April, well below the national median of 50 days," she explained.
"This spring, we are still seeing a bump in the number of pending and closed listings, just like we do every spring—just not enough to keep the rising inventory levels down," Thayer said. "Supply is increasing, while demand is staying the same."
Thayer said that the Denver housing market seems to be "returning to a pace that we saw about 10 years ago, and again in 2019." She thinks that the city will see inventory levels rise through September, as the seasonality of the market continues.
"Yet, unless the chaos of the current economy takes a turn to foster a sense of security and optimism for the consumer, renting will become even more affordable and home prices will need to adjust to meet the consumers' economic needs," she said.
"Since prices have appreciated in the area faster and greater than many other cities in the U.S. over the past several years, many sellers will be able to adjust their home sales price, offer incentives, and negotiate with buyers enough to find success in the market for both themselves and their buyers."
Keri Duffy, market trends committee member for DMAR and a broker at Kentwood Real Estate, told Newsweek that she expects the city's housing market to continue normalizing in the coming months.
"Home prices won't diminish in a way to make them more attainable, only rates have the power to do that," she said. "Both sellers and buyers will have to enter the market with patience and reasonable expectations."
What People Are Saying
Nick Gerli wrote on X in April: "I think a couple of things are going on in Denver. One is that the market's job growth and migration have really slowed. So there is structurally less homebuyer demand. As well as less renter demand. Secondly, the mortgage lock-in effect is now beginning to ease, which is propelling a massive backlog of new listings to the market."
Hannah Jones, senior economic research analyst at Realtor.com, told Newsweek last month: "The steady decline in home prices and climb in inventory suggests that Denver's market is returning to balance. There were 8,500 on the market in March, the highest March level in the data's history (back to mid-2016).
"Though inventory has built up, prices are still elevated, especially on a price-per-square-foot basis, suggesting that buyers are waiting to see prices fall further before getting into the market."
Jones told Newsweek on Tuesday: "Climbing inventory and falling prices suggests that the Denver housing market is searching for some balance. The median listing price per square foot is still much higher than pre-pandemic, meaning the market could soften further before activity picks up again."
What Happens Next
If the current inventory surge continues, Denver homeowners could face further declines in property values throughout 2025. Gerli's Reventure forecasts a 9.1 percent drop in home values over the next 12 months if the ongoing trends continue.
This might be bad news for homeowners, but great news for aspiring homebuyers who have been priced out of the market in recent years.
"If homebuyers were to come back into the market and sales were to increase, that could stem the tide of inventory and stabilize prices. However, I don't anticipate this to happen with Denver's housing market being so expensive," Gerli told Newsweek.
"The typical mortgage payment for new buyers across the metro is nearly $3,693/month, which is 41.5 percent of the area's median monthly income. Many buyers simply cannot qualify for mortgages in Denver's market at today's prices and rates."