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It's the start of the new year. Let's review how the local real estate market finished up in 2025 and see what's in store for the start of 2026. Both the Denver and Boulder County markets performed very similarly, so to keep things simple, we've combined the data into one chart for each metric. Median Sales Price: |
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The median sale price is down year over year by about 2 percent. This was primarily due to continually climbing inventory numbers outpacing demand. For the past three years, demand for homes has remained remarkably consistent, while the number of sellers has steadily increased. The disparity between the two has finally started to put downward pressure on prices. The only surprise here is that most people, given the high number of price reductions and withdrawn listings this year, would probably have thought prices would have come down further. Active Listings: |
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Active listings have been climbing each year since the start of 2023. The increase has been significant, from capping out at around 15,000 in 2023 to nearly 27,000 in 2025. Sellers faced almost twice the competition they had experienced just two years prior. One might think that a near doubling of supply with no change in demand would result in a larger shift in pricing, but that wasn't what we saw. One reason is likely the change in mortgage interest rates. Mortgage Interest Rates: |
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During the inflationary period of the pandemic, mortgage rates steadily rose, peaking around 8% near the end of 2023. They remained relatively constant in 2024, and as confidence grew that inflation was subsiding, rates began to decline in 2025, finishing around 6.2%. This lowered the cost of purchasing for home buyers, and even in an economy where many things were more expensive than a few years prior, home demand persisted. Closed Listings: |
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In 2023, 2024, and 2025, home buyer demand followed a very similar pattern. The number of buyers purchasing homes was nearly identical year-over-year. Days On Market: |
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Days on Market have increased steadily over the past three years, though not as dramatically as the changes in inventory. At the end of 2022 the average days on market were 36. At the end of 2025, average days on market were 49 days. Months Supply: |
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Months supply of inventory, a measure of how quickly homes are coming on and going off the market, rose above 4 months in 2025, indicating that, in current times, 3 to 3.5 months of inventory gives us balanced market conditions. In terms of negotiation leverage, we are starting the year in relatively balanced conditions for buyers and sellers. Showings Per Listing: |
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Given the increased number of homes for sale and steady demand, it's not surprising to see that showings per listing have declined somewhat over the past three years. Starting the year with interest rates on the decline may help spark some increased showing activity. So given these stats, what can we expect to see in the housing market this year? This is where I get to say my yearly reminder that the best economic minds in the world have proven to be spectacularly bad at predicting much of anything that will happen in the future. We often get a good chuckle out of reviewing the real estate predictions from the past years to see how rarely they've panned out. That said, we will be watching mortgage rates and housing inventory closely to see how market dynamics will play out. We won't make guesses about what will happen in 2026, but we can talk about where we are and how that informs how for those of us considering a real estate purchase or sale in the first quarter of 2026 should prepare. For Home Buyers: Interest rates have come down a bit, and the negotiating leverage is often finally in your favor. You also have many options to choose from. Many folks who purchased in the 2010s and early 2020s would kill to have the options you have right now. For many buyers over the past decade, there were only 2-5 homes that fit their criteria when they were looking, and half of those had multiple offers. Today, many of our buyers have 20-30 homes to consider, and only a few receive multiple offers. Many of the others are sitting and waiting for the right buyer, so they'll need to be ready to make concessions in negotiations. Look for opportunities to negotiate down purchase prices, get cash back at closing to pay for your closing costs, and consider whether interest rate buy downs make sense in your situation. For Home Sellers: The same things are always true here. Dress to impress as best you can. You have more competition out there right now, so you'll want to find every way you can to stand out. If you're thinking about selling this year, please get in touch with us early so we have time to take every step we can to make wise decisions about how to prep your home for sale. Also, it's rare to have multiple buyers interested in a property right now, so it's best to have a plan that includes making some concessions for buyers to sweeten the deal so they pick your home over someone else's. Make sure to build more generous list times into your strategy so you have plenty of time to accomplish your goals. 2026 marks our 15th year in the business. We are thankful to you all for continuing to follow along in our real estate journey. Here is a to a great real estate year and don't hesitate to reach out if there is anything we can help with. Until next time! Ken (and Allison) |
