denver housing market: prices, trends, forecast 2025
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By Marco Santarelli | Published on December 24, 2024
So, you're curious about the current Denver housing market trends, right? Well, here's the deal: Nicknamed the “Mile High City” for its elevation, Denver's housing market has reached new heights as well. Once known for affordability, Denver now boasts a competitive market with rising prices. This surge is fueled by a booming job market and a limited housing inventory.
As of December, the Denver housing market is showing a mix of resilience and seasonal shifts. While prices have seen a slight dip recently, there's still a lot of activity, particularly in certain price ranges. The market isn't exactly on fire, but it's certainly not frozen either. Let's dig into the details and I’ll share my thoughts and experiences to give you a clear picture.
Current Denver Housing Market Trends: What You Need to Know
Home Sales
One thing I always keep an eye on is the pace of home sales, because this really reflects how active the market is. In November 2024, we saw some interesting movement in home sales. The number of homes that actually closed in Denver was 10% higher than the same time last year, which is a pretty solid jump (RE Colorado).
I’ve personally witnessed this activity firsthand, and many potential buyers have been actively engaging in the market. However, sales did decrease by about 13% from the previous month (October 2024). This dip from October is not surprising; it's a typical trend we see as the year winds down and the holiday season kicks in.
Even though this drop from October to November may seem like a slump, the 10% year-over-year increase tells me that people are still buying homes. It’s a testament to the underlying demand in Denver. The market remains fairly healthy, despite seasonal cooling trends.
Home Prices
Now, let's talk about the numbers that really grab everyone's attention – home prices. The median closed price for homes in the Denver metro area reached $580,000 in November 2024. This is a 3% increase compared to November 2023. So, the long-term trend is still upward, but the market dynamics are shifting.
However, we also saw a slight decrease in home closing prices of 3% from October to November. What's going on here? Well, it seems sellers are adjusting their asking prices a bit to attract buyers. This adjustment is a key part of understanding the current market; it's a sign that sellers are being realistic about the current demand and inventory levels. In my experience, these minor fluctuations are common, especially during seasonal changes.
Here is a summary of what is happening with prices in the market:
Median Closed Price: $580,000
Year-over-year Increase: 3% increase from Nov 2023
Month-over-month Decrease: 3% decrease from Oct 2024
Housing Supply
The next thing I always look at is housing supply. It is an essential indicator, because the supply dictates a lot about the market. I've watched this closely over the past few months, and November 2024 provided some important data.
Sellers added 2,719 new listings to the market in November. That’s a 1% increase from November 2023. This might not seem like much, but every little bit helps provide more options for buyers, which is always positive for the market in general. However, the number of new listings did take a 41% plunge from October. This really shows the typical seasonal cool-off we see as the end of the year approaches. It’s pretty common to see a slowdown in new listings when the holidays are here.
What does this mean? The market is seeing a decrease in the number of new homes coming on the market, and that could eventually help bring back some stability in home prices after these seasonal fluctuations ease. We also have to factor in standing inventory which leads us to the next important point.
The standing inventory, meaning the number of homes actively available for sale, reached 8,972 in November, which is a massive 40% increase from last year. But here’s another wrinkle: that number is actually down 17% from October. So, while the overall number of homes for sale is still higher than last year, we’re seeing a noticeable decline from the previous month. This indicates that while there's more choice than last year, buyers are still acting on listings and the market has less inventory now compared to the previous month.
Market Trends
So, what do all these numbers add up to? Well, the current Denver housing market trends show a mix of influences. We have increased year-over-year sales, moderate price increases, and more inventory, all with some seasonal fluctuations.
One trend that stands out is that the market for homes priced between $1 and $2 million is particularly strong. The closings in this price range saw a 30% increase in November, and there was a 5% year-over-year increase in new listings in this range. I have noticed that higher-end listings are moving relatively quickly, with those homes being on the market for a median of 40 days before a contract was executed. So, the luxury home market still has some momentum and is showing more resilience than other segments of the market.
Here's a look at some key market trends at a glance:
Increased sales year-over-year, even as they decreased month-over-month
Median price increases, but with some recent price adjustments.
More inventory compared to last year, but less month-over-month
High-end market (homes between $1 and $2 million) is doing particularly well.
Is It a Buyer's or Seller's Housing Market?
This is the question everyone wants to know: is it a buyer’s or seller’s market right now in Denver? Well, the answer isn't so cut-and-dried. It’s a little bit of both.
We're seeing increased inventory, which is a good sign for buyers, as they are having more options to choose from. However, home prices remain relatively high, and if a great home comes on the market, it doesn’t stay for too long. Homes are spending an average of 29 days in the MLS before a contract is executed, which is longer than last year, but it's also a sign that the market is not cooling rapidly. In my opinion, it is still more of a seller's market, but the power dynamics are starting to shift and are more balanced now than they were a year ago. It’s also important to realize that this balance shifts a little bit depending on the price range of the homes.
Are Home Prices Dropping?
Now, let's tackle the question on everyone's mind: are home prices dropping? The answer is a bit nuanced. Yes, we saw a 3% decrease in closing prices from October to November. But before we jump to conclusions, keep in mind that this drop is also happening in the context of a long-term increase of 3% year-over-year.
Sellers are also adjusting their asking prices, which indicates that they are aware of the market dynamics and they are doing what they can to close deals. I believe that these adjustments are not necessarily a sign of a dramatic price collapse but rather a natural response to market conditions and seasonality. I always tell people to not try to time the market as it's futile. Home prices will fluctuate but are not going to see a dramatic drop unless there is a major economic upheaval.
Rental Market Trends
It's also worth taking a peek at what’s happening in the rental market in Denver. The number of properties that were leased through REcolorado's MLS in November was 233, a significant 18% decrease compared to November 2023. There was also a 28% drop from the previous month, which shows that there's a bit of a downturn in rental activity happening.
The median leased price also saw a 5% drop compared to last year, so renters are getting a little bit of a break here. However, like the for-sale market, the number of new rental listings added to the market was down 18% year-over-year. There were 706 active rental properties available in November, 8% fewer than last month. So, the rental market is following similar trends of decreased activity, but some price adjustments are making it less expensive to rent.
Summary of Rental Market Trends:
Number of leased properties decreased year-over-year and month-over-month.
Median leased price decreased year-over-year.
Number of new rental listings decreased year-over-year and month-over-month.
Final Thoughts
Overall, the current Denver housing market is dynamic. It's not a blazing hot market like we’ve seen in the past, but it is also not a frozen one either. There are some price adjustments happening, but they are not as dramatic as some news outlets might portray them. The market is showing an interesting mix of seasonal fluctuations, shifts in supply and demand, and continued activity in the higher-end home segments. As someone who has been paying close attention to the market, I believe it is in a period of adjustment. My best advice is always to do your research, be patient, and work with a trusted professional who understands the local market.
Denver Housing Market Forecast 2025: What's Coming Next?
Are you curious about what's next for the Denver-Aurora-Lakewood metropolitan area housing market? Well, here's the quick scoop: current forecasts suggest a slight dip in home values over the next few months, followed by a very modest increase. I've been keeping a close eye on the real estate scene, and let me tell you, it's a mixed bag right now. Let's unpack what the experts at Zillow are predicting and what it might mean for you.
Denver Home Price Predictions
According to Zillow's latest data, the Denver metro area is expected to see some minor fluctuations. Here's a breakdown of their projections:
Essentially, this data shows a tiny dip in home values expected between now and early next year. However, by late 2025, prices are predicted to creep back up, though only slightly. It's not a major drop or a crash, just a small market correction that might present a good opportunity for some buyers. This kind of small fluctuation is pretty common and, in my experience, a sign of a market finding its balance.
How Denver Compares to Other Colorado Cities
Looking beyond Denver, how does the rest of Colorado stack up? Here's a comparison of other major metro areas in the state, using the same Zillow data:
As you can see, Denver is pretty much in the middle of the pack. Glenwood Springs and Grand Junction are expected to see much more significant gains, while Boulder seems to be experiencing similar market trends to Denver. I think this variation shows that local economies and market dynamics play a huge role in these housing predictions.
Will Denver Home Prices Crash? What About 2026?
Okay, let's address the big question: Is a housing crash coming to Denver? Based on this information, and my experience following these kinds of market trends, I don't see anything pointing to a crash. The numbers are too small and a market correction is very different from a crash. Remember, these are predictions, not guarantees. The market can be affected by many factors.
As for 2026, that's a bit further out, and it’s harder to predict accurately. However, if the trends continue, I'd expect to see modest increases in home values. I think we’ll likely see continued moderate appreciation, barring any major economic shifts.
What Does This Mean For You?
If you’re a buyer, this slight dip might mean you have a bit more leverage in the coming months. If you're a seller, don't panic! It just means it is more important than ever to price your home competitively and be realistic about the market. It’s always a good idea to consult a local real estate professional, they often have the most up-to-date information and insights.
The Denver housing market is dynamic and while these numbers provide a glimpse, there are always unexpected factors that can influence real estate. Stay informed and make decisions that are right for you.
How is the Denver Area Currently for Real Estate Investors?
The Denver Metro Area has been a hotbed for real estate investment, and for good reason. Denver's real estate market offers a compelling combination of economic strength, limited land, and a growing population – factors likely to persist for years to come. This can be particularly enticing for long-term investors seeking stable rental income and the potential for capital appreciation.
Here's a breakdown of the market from an investor's perspective:
Pros for Investors:
Thriving Economy: Denver boasts a strong job market, particularly in tech and aerospace, attracting a wave of young professionals who fuel rental demand. According to MMG Real Estate Advisors, Denver's economic outlook for 2024 is tempered growth with a 0.4% job growth rate. The Colorado General Assembly also predicts that 2024 will have an annual growth of 2.4%. This translates to a consistent stream of tenants, crucial for generating positive cash flow and ensuring property occupancy.
Highly Desirable Quality of Life: Beyond economics, Denver offers a highly desirable lifestyle. With 300 days of sunshine, a thriving cultural scene, craft breweries, and stunning natural beauty with the Rocky Mountains at its doorstep, Denver attracts residents from all walks of life. This creates a diverse tenant pool and a vibrant city, further fueling demand for housing.
Diverse Tenant Pool: Beyond young professionals, Denver's cultural scene, craft breweries, and stunning natural beauty attract a wide range of residents, from artists and retirees to students and entrepreneurs. This diversification mitigates risk for investors compared to a market overly reliant on a single industry. If a particular industry faces a downturn, it's less likely to cause a ripple effect throughout the entire rental market.
Limited Land Availability: Nestled by the majestic Rocky Mountains, Denver has limited space for sprawl. This scarcity of developable land keeps housing inventory tight, pushing rents and property values upwards. This dynamic benefits investors seeking properties with the potential for steady rental income appreciation and long-term capital gains.
Population Growth: Denver's population has been on a steady upward climb for years, fueled by its economic opportunities and attractive lifestyle. It has experienced population growth, with the Denver-Aurora-Centennial metro area growing 1.2% between July 2020 and July 2023, adding more than 35,000 people to the region. This is compared to a 1% population increase nationwide. In 2024, the metro area's population is 2,963,000, which is a 1.09% increase from 2023. This consistent population growth translates to a sustained demand for housing, which can benefit real estate investors in a few ways. First, it helps ensure a steady pool of renters. Second, it contributes to an overall rise in property values, allowing investors to potentially build wealth through appreciation over time.
Cons for Investors:
Competitive Market: Denver's allure isn't a secret, leading to fierce competition among investors. Be prepared to move fast and potentially offer above asking price to secure a deal. The competition can be particularly intense for single-family homes and desirable neighborhoods, so investors need to have their financing pre-approved and be ready to act decisively.
High Entry Point: Denver's median home price sits above the national average. The median listing home price in Denver, CO was $614.9K in April 2024 while the price per square foot was $399. You'll need a solid financial foundation to enter this market. A larger down payment will not only strengthen your offer but also reduce your monthly mortgage payment, allowing for better cash flow management.
The Verdict: Denver's real estate market presents a promising landscape for investment, but it's not a walk in the park. Before diving in, delve into market research. Identify your investment goals, whether it's building long-term wealth through appreciation or generating steady rental income. Connect with a local real estate agent who can give you a current pulse of the market and navigate you towards the right property based on your criteria.