The residential real estate market in the Denver–Lakewood–Aurora area is showing signs of transition. Inventory is rising, price growth is slowing, and the advantage is starting to shift toward buyers. Here's a closer look at what's happening and what it means for homeowners and prospective buyers.
According to the Federal Housing Finance Agency (FHFA), Colorado home prices rose about 1.93% year-over-year as of Q1 2025. That’s below the national increase of 4.0%. While prices remain high, the rapid appreciation of the past few years has tapered off.
The chart above compares Colorado’s price index to the national average over the past five quarters. As shown, Colorado’s market is stabilizing after several years of aggressive growth.
Active listings in the Denver metro area are up approximately 42% from this time last year. That’s a significant shift, and it’s giving buyers more options and more negotiating power. Nearly 38% of listings in June 2025 had price reductions.
This inventory increase is a key sign that the market is rebalancing. Sellers are adjusting their expectations, and homes are spending more time on the market.
With mortgage rates still hovering around 6.75%, many homeowners are reluctant to sell — especially if they’re holding loans at 3% or below. This is known as the lock-in effect. It’s slowing down new listings even as buyer demand cools.
For new buyers, higher rates reduce affordability, which puts additional pressure on pricing and demand.
Median home prices in metro Denver are still around $585,000. While prices remain strong, buyers now have more room to negotiate, and bidding wars are less common than they were in 2021–2022. Condo prices in the city are softening more than single-family homes in the suburbs.
Fannie Mae and other national forecasters expect home prices to rise between 2–3% through the end of 2025. Denver is likely to track slightly below that range due to high inventory and affordability concerns.
This does not point to a market crash. Rather, it reflects a more balanced environment where pricing is driven by realistic buyer demand and careful seller positioning.
Keep in mind that this is a broad market overview. Different neighborhoods, property types, and price ranges can perform very differently. If you’re planning to buy or sell, it’s important to base decisions on local, property-specific data.
As always, Alpha Appraisal Associates LLC is available to assist with property valuations, market insights, and real estate-related questions throughout the Denver metro area.