January 2025 Denver Metro Market Review

The Denver Metro real estate market kicked off 2025 with a surge of inventory, giving buyers more options and setting the stage for spring. While mortgage rates continued to hover around 7%, home prices remained resilient, and demand increased. Active listings rose 57.83% from January 2024, sales volume increased 7.43% year-over-year, and the close-to-list price ratio edged up to 98.5%, showing that well-priced homes are still commanding strong offers. While affordability challenges persist, steady mortgage rates and increased supply create opportunities for both buyers and sellers heading into the spring market.

Inventory Surge

January saw active inventory jump 57.83% higher than January 2024. This was primarily due to 4,339 new listings, many of which were expired December listings returning to the market. This influx represents a 31.92% increase year over year and a 135.43% jump from December, an unusual departure from the typical 3.85% seasonal decline in active listings between December and January.

Not all segments are experiencing the same momentum. The sales volume of attached homes, like condos and townhomes, declined 11.45% year-over-year and 27.83% from December. This could be credited to an average increase in HOA fees of 37% since 2020. Conversely, detached homes are seeing more activity, particularly in the $500,000–$700,000 price range, which has experienced strong appreciation. Not all detached homes are selling quickly. Homes priced over $2 million, which traditionally do spend more days on the market, are taking a median of 7 months to sell. These differences highlight the importance of strategic pricing and market awareness.

Home Prices Show Modest Growth

Despite shifting market conditions, homes in Denver continued to appreciate, starting at 1.77% higher than in January 2024. Over the long term, experts expect Denver’s strong demand, constrained housing supply, and steady population growth to support a modest 0–3% price appreciation in 2025. The close-to-list price ratio reached 98.5%, up slightly from 98.46% last year, showing that while buyers have room to negotiate, well-priced homes still sell near the asking price—and even attract multiple offers in some cases.

Opportunities for Both Buyers and Sellers

With inventory up 57.83% and median days on the market rising 28.57% year-over-year, buyers now have more options and time to negotiate. However, strategic pricing remains critical for sellers. Overpriced homes are sitting longer, with the median days in MLS for active listings reaching 78, up 12.50% from December and 28.57% from last January. Compare this to the homes that sold in January, which spent a median of 45 days on the market. Pricing a home appropriately remains the best strategy to selling it quickly and for the best price. 

Mortgage Rates and Affordability

Mortgage rates are holding steady at around 7%, limiting buyer affordability. Even after the Federal Reserve lowered the federal funds rate in late 2024, mortgage rates saw only temporary dips. A slightly lower-than-expected jobs report in January also failed to bring rates down, as lower unemployment kept pressure on borrowing costs. Elevated rates, combined with rising home prices, higher insurance costs, and increased HOA fees, continue to challenge homebuyers. However, buyers who act now may find more negotiating power before the spring market heats up. With inventory on the rise and competition still moderate, buyers who find the right home may have more room for price adjustments and seller concessions than in past years.

Looking Ahead

The Denver Metro real estate market is entering 2025 with a mix of opportunities and challenges. Buyers have more choices and negotiating power, while sellers who price their homes strategically can still achieve great results. Uncertainty is always guaranteed in some amounts in real estate, but with increased inventory and steady mortgage rates, there may now be a window of opportunity in the market.

Whether you’re buying or selling, a knowledgeable broker can help you understand local trends and pricing strategies, making all the difference in achieving your goals in this dynamic market.