September Metro Denver Market Review

September brought some interesting changes to the Denver Metro real estate market. After years of a strong sellers’ market, things are starting to balance out – at least a little. Buyers are gaining some leverage with increased inventory and higher average days on the market, while sellers are still seeing strong offers, especially if their home is priced right and in good condition.

Increased Inventory 

The big story this month is inventory. Active listings are at their highest level since 2011, and the median days on the market rose to 25 days – up 19% from August and a significant 79% from last year. Homes are sitting longer, which means buyers have more options and don’t feel the same pressure to rush into a deal. Months of inventory increased to 3.6 months, the first time in years that this statistic has been over three months. While this isn’t quite a balanced market (typically defined as 4-6 months of inventory), it’s a shift from the pandemic-fueled market where months of inventory were less than one. This adjustment gives buyers some breathing room to negotiate and hone in on their must-haves.

Interest Rates and Buyer Demand

Buyer activity has remained relatively stable despite the Federal Reserve’s recent 0.50% rate cut. The key reason is that mortgage rates are more closely tied to the 10-year Treasury yield, which actually increased by 0.15% at the end of this month, causing mortgage rates to tick up slightly. Economists explain that many had already anticipated this rate cut, so it was largely “baked into” mortgage rates ahead of time. As a result, we haven’t seen a major rush of buyers jumping back into the market. Instead, many are waiting patiently for the right opportunity and being more strategic with their offers. However, demand hasn’t vanished—pending sales in September rose by 3.64% compared to August and this is 6 straight weeks of increased mortgage applications, showing that buyers are still out there, just moving at a more measured pace. Although the median close price dipped 2.34% from August, it’s still up 1.94% year over year, demonstrating that while the market is cooling, Denver home values remain stable.

Shifting Seller Strategy

For sellers, these marker conditions may mean it will take longer to sell your home, but don’t be discouraged. The close-to-list price ratio remains strong at 99%, meaning well-priced homes still attract near-asking offers. Denver’s housing equity is at an all-time high, with the average homeowner sitting on around $315,000 in equity, up $129,000 from 2019. This cushion means sellers are in a strong position even if prices dip slightly. However, if you’re considering listing your home in the future, now is the time to make any necessary upgrades. With more homes sitting on the market, buyers are becoming pickier, and making your home stand out could be the difference between a quick sale and a drawn-out process.

Opportunities for Buyers

For buyers, the current market presents a unique opportunity. With rising inventory and homes spending more time on the market, buyers now have more negotiating power than they’ve had in recent years. Those who act now will likely have more flexibility with financing terms and are in a stronger position to request seller concessions. While some buyers are waiting for interest rates to drop further, that’s far from guaranteed and not the only factor to consider. Both 2023 and 2024 saw a surge in market activity in the spring, with buyers facing more competition and having to make more aggressive offers. We expect this pattern to repeat in 2025, so now may be the right time to buy before that heightened competition kicks in. While the market isn’t yet balanced, it’s far more buyer-friendly compared to the frenzy of 2020 and 2021, giving buyers a better chance to secure a deal that works for them.

Conclusion

The Denver real estate market continues to shift, and it’s still a competitive landscape. The trends and stats we refer to in this blog include the six counties that make up the Denver Metro area, so for advice on your specific neighborhood, the Generator advisors are ready to help. Whether buying or selling, staying informed and prepared is the best strategy. Buyers should focus on finding their ideal home and negotiating smartly, while sellers should aim to present their homes in the best light at a strategic price to capture strong offers. Both sides have opportunities in this evolving market; timing is everything.