February 2025 Denver Metro Market Review

February brought renewed energy to the Denver Metro real estate market, with both buyers and sellers picking up momentum as the spring season approached. Warmer weather and a slight dip in mortgage rates encouraged activity, leading to more new listings and a faster pace of sales. While affordability remains challenging, buyer demand picked up, and some homes even saw multiple offers. With inventory growing and market conditions shifting, strategic pricing and timing are still the name of the game for buyers and sellers.

Inventory Rises as Sellers Re-Enter the Market

Seller activity increased notably in February, with new listings rising 11.17% month-over-month and 13.81% year-over-year. This seasonal uptick is typical, as many homeowners who held off during the winter months enter the market in early spring. However, homeowners with locked in low mortgage rates are still hesitant to sell unless life circumstances necessitate a move.

Despite the boost in listings, inventory growth outpaced buyer demand in February. 4,828 new listings entered the market, while 3,516 homes went under contract. The detached market saw pending sales increase 23.27% from January, while the attached market saw a 19.92% increase. Encouragingly, attached home sales showed signs of recovery after struggling in 2024, partly due to affordability concerns created by rising HOA fees and insurance costs.

Sales Activity and Pricing Trends

Even with this increase in activity, the spring season is getting a slower start this year. Total home sales declined 17.29% year-over-year, and total sales volume was down 11.18%. Year-to-date, the number of homes sold dipped 7.05%, while total sales volume is down 3.27%. Many buyers are still waiting for interest rates to move before they do. However, home values remain stable. The median sale price for detached homes increased 2.63% year-over-year, while attached homes saw a 2.54% increase. This price resilience and a slight dip in mortgage rates kept many buyers engaged despite affordability concerns.

Homes Selling Faster as Buyer Activity Increases

One of the critical ways we measure the pace of the market is by using days on the market or DOM. One of the most notable shifts in February was the DOM, for detached homes, which fell 37.21% month-over-month to 27 days. This is only slightly higher than February 2024, when the median DOM was 24 days. For attached homes, the also saw a decline in DOM compared to January, although at 42 median days, they are still sitting longer than last year’s 21-day median. This shift suggests buyers are becoming more active and decisive, particularly in well-priced homes. While some properties are still lingering – especially those priced too high or needing updates – homes that are market-ready and competitively priced are moving faster and even seeing multiple offers.

Mortgage Rates and Affordability Considerations

Mortgage rates continue to fluctuate in 2025, but maintain an overall downward trend. However, with rates still above 6.8%, affordability remains a key factor for buyers. While for some, the sticker shock of higher mortgage rates is in the rearview mirror; others are waiting for a more significant rate drop that may not come anytime soon. Buyers who act now may benefit from greater negotiating power, especially as inventory rises. Many sellers are offering concessions or price adjustments to attract buyers, but warmer spring temperatures bring more buyers to the market, and time will tell if inventory will keep up. At the end of February, the market for detached homes was still a seller’s market with 2.86 months of inventory, but for attached homes, it was closer to a balanced market with 4.76 months of inventory.

Looking Ahead: Market Poised for Spring Surge

With inventory climbing and mortgage rates holding steady, buyers have more choices than in previous years, but well-priced, move-in-ready homes are still moving fast. Sellers who list competitively and present their homes well can still attract strong offers, particularly as demand picks up heading into the warmer months.

While dramatic headlines may predict a market downturn, the Denver data tells a different story. Denver’s limited housing supply and steady demand continue to provide market stability. Whether buying or selling, making informed decisions based on local trends is the key to success in this shifting landscape.