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This Year's Homefront Forecast: January 2025 Denver Real Estate Market Trends

It’s the beginning of 2025, and the Denver real estate market is giving us its usual blend of surprises and predictability. Inventory remains elusive, interest rates loom large, and the post-holiday chill has set in. But don’t mistake the quiet for a lack of movement. Beneath the surface, subtle shifts are laying the groundwork for what’s to come in 2025. Here’s how December shaped up according to the DMAR’s (Denver Metro Association of Realtors) January 2025 Denver real estate trends.

Since a month earlier, inventory dipped (-26.02%  month-over-month), pending sales softened (-15.5% month-over-month), and days on market stretched out (+42.86% median month-over-month). Yet, despite the seasonal slowdown, the market showed resilience, with median home prices holding steady and closed prices up 4.8% year-over-year. Sellers are still hesitant, buyers are still cautious, and everyone is still side-eyeing interest rates that refuse to come down.

The close-price-to-list-price ratio was down a mere 0.04% month-over-month… less of a bargaining chip and more of a gentle nudge for buyers. Sales volume also eased slightly (-1.09% month-over-month), mirroring the expected seasonal quiet (increasing 18.75% year-over-year). These numbers hint at a market recalibrating rather than sprinting toward dramatic changes.

As 2024 fades into memory, it’s clear we’re still in a holding pattern, waiting for a definitive shift.

January 2025 Denver Real Estate Trends

  • Active Listings: Down 26.02% month-over-month, up 38.56% year-over-year
  • New Listings: Down 32.97% month-over-month, up 6.42% year-over-year
  • Pending Sales: Down 15.50% month-over-month, up 8.42% year-over-year
  • Closed Sales: Nearly flat  (-0.89%), up 13.15% year-over-year
  • Average Closed Price: Essentially unchanged (-0.19% month-over-month), up 4.8% year-over-year
  • Median Closed Price: Flat month-over-month, up 5.45% year-over-year
  • Sales Volume: Down 1.09% month-over-month, up 18.57% year-over-year
  • Days on Market (Median): Up 42.86% month-over-month, 37.93% year-over-year
  • Close-Price-to-List-Price Ratio: Marginal dip (-0.04% month-over-month, -0.74% year-over-year)

Revisiting the 2024 Market Reports: The Year of Waiting (and Waiting)

Will our Denver real estate predictions from last year shrivel up like a petrified raisin or age like that fancy wine you’ve been saving for a special occasion? Let’s take a look at each of our market report headlines from 2024. (Is this a good idea? Not sure. But it’s definitely interesting!)

January: A Steady Year’s End Sets the Stage for Some Big Change

Excerpt:

"2023 went out the same way it came in with home prices stabilizing and listings spending more days on the market. These trends point to more future balance in the buyer and seller power dynamic…"

Analysis: January’s report accurately noted the potential for more equilibrium between buyers and sellers, though the “big change” it hinted at remained elusive as interest rates stayed stubbornly high. Inventory, while slowly climbing, didn’t drastically shift the balance.

February: Sellers Making Their Moves

Excerpt:

"Experts largely predicted that early 2024 would bring a drop in mortgage loan interest rates…"

Analysis: Optimism about rate drops fizzled out quickly as February came and went without any meaningful reduction in rates. While some sellers did start testing the waters, the expected surge in activity fell short of predictions, highlighting the enduring hesitation across the market.

March: A New Kind of Spring Market

Excerpt:

"Barely even a quarter of a percent down in interest rates… It’s becoming clear that rates might largely stay put at least for a while."

Analysis: March’s report hit the nail on the head: the spring market brought no relief from high rates. The anticipated revival of buyer enthusiasm was dampened by affordability challenges, which continued to weigh on the market throughout the year.

April: Rate Handcuffs and an Inventory Paradox

Excerpt:

"April reveals the lingering effects of Covid-era mortgage loan interest rates and an expected seasonal upswing…"

Analysis: The so-called “rate handcuffs” - owners hesitant to sell due to low-rate mortgages - remained a significant drag on inventory. While April saw a seasonal bump, it was muted, reflecting the broader inventory challenges that persisted throughout 2024.

May: The Hottest Housing Market… and Getting Hotter

Excerpt:

"Spring is really starting to pop… hopeful homeowners are sick of the waiting game."

Analysis: While activity picked up slightly in May, the “hottest” claim didn’t reflect reality. The market remained constrained by affordability concerns and persistent interest rate stagnation, though buyer demand continued simmering beneath the surface.

June: Record-Breaking Listings Increase Brings Purchase Options

Excerpt:

"This spring’s market has seen a buyer shortage become the new listing shortage…"

Analysis: June’s surge in listings was notable but not enough to offset affordability pressures. Buyers still faced steep challenges, and the predicted resolution to the "inventory paradox" didn’t materialize.

July: Lingering Listings, the Election Effect, and Rate Reductions

Excerpt:

"The Denver real estate market cooled down a bit in June…"

Analysis: As the summer progressed, high rates continued sidelining buyers, and the “election effect” on consumer confidence likely dampened activity. July’s slowdown marked the start of a quieter-than-expected midyear market.

August: Will the Housing Holding Pattern Break?

Excerpt:

"The Denver real estate market is stuck in its own form of the inversion effect…"

Analysis: August perfectly captured the market’s ongoing stagnation. Sellers clung to low-rate mortgages, and buyers grappled with affordability. The “holding pattern” persisted, with only incremental changes to inventory and rates.

September: Fed Forecasts and Real Estate Realities

Excerpt:

"Will they reduce the federal funds rate? If so, will the change affect home loan interest rates too?"

Analysis: September’s anticipation of rate changes highlighted the market’s dependence on monetary policy. Despite widespread speculation, interest rates remained largely unaltered, reinforcing the year-long trend of cautious, constrained activity.

October: Market Movement or Wishful Waiting?

Excerpt:

"Mortgage rates, inventory shortages, and affordability issues have been the talk of the town…"

Analysis: October’s report captured the mood of cautious optimism, though movement remained limited. Buyers and sellers continued their “wishful waiting,” with the market showing only marginal shifts.

November: Pending Sales and Days on Market Climb

Excerpt:

"Gone are Denver’s dizzying days of extreme seller dominance…"

Analysis: November brought signs of balance, but the climb in pending sales and days on market reflected ongoing affordability concerns. The shift was subtle, not a dramatic transformation.

December: Deals, Dips, and Dynamic Shifts

Excerpt:

"Motivated sellers, concessions on the rise, and inventory playing catch-up…"

Analysis: December’s report highlighted small yet meaningful changes in the market, with sellers becoming more flexible and buyers cautiously re-engaging. These shifts set the stage for a potentially more dynamic 2025.

Corcoran Perry & Co. Featured listing: 2236 Jasmine Street, Park Hill

Denver Real Estate Market Predictions for 2025

Steady Growth

Denver’s home prices are expected to rise by 3-4% in 2025, keeping pace with inflation and demand. "2025 could be the year we see buyers and sellers finally come to terms with the new normal," predicts Ryan Belinak, Chief Managing Broker.

Interest Rates Stabilizing

The 30-year fixed mortgage rate is forecasted to hover between 5.5% and 6%. While not exactly a steal, it’s a marked improvement over recent highs. "If rates stay stable, expect a much-needed rebound in home sales," says Jon Larrance, Broker Owner.

Rental Market Robustness

With rents averaging $2,150 per month and vacancy rates at just 4%, Denver remains a landlord's dream. But for tenants, affordability will be a growing challenge.

Population Growth & Economic Resilience

Denver’s steady population growth and thriving economy make it a magnet for both investors and relocators. “The Mile High City is more than a pretty skyline,” says Larrance. “It’s a strategic bet for long-term investment.”

Affordable Housing Shortage

The elephant in the room remains affordability. As housing demand outpaces supply, the lack of affordable options will continue to pressure the market. “Many of my clients have struggled with affordability and I don’t want to gloss over that. Homes are expensive and it’s difficult for a lot of people to qualify for a mortgage, save for a down payment, or afford the monthly homeownership cost,” explained Belinak. “I don’t think that hurdle will go away in 2025 but we’ve been creative in helping Denverites reach their homeownership goals throughout 2024 and that’s not going to stop either.” 

The Denver Housing Market to Come

If 2024 were a movie, it’d be all set up, no climax. Buyers and sellers stuck to their corners, inventory crept along, and rates said, “Not today.” But if we squint hard enough, 2025 might have a plot twist in store… and we will let you know when it does.

Ready to make the most of what 2025 might bring?  It’s important to work closely with a professional you can trust. Connect with one of our Denver real estate agents for personalized guidance and the latest real estate data.

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