Denver, Colorado Housing Market Trends 2023

The Denver real estate market is believed to be among the largest in Colorado. The state's capital has many major employers and is one of the biggest cities in the Mountain West.

Many have also been flocking towards Mile High City. Mile High City from more expensive cities, in search of lower living costs, and working remotely from The Rocky Mountains.

But, the Denver housing market might have reached an inflection point following several years of rising house prices because of the demand for buyers adjusting to the rising mortgage interest rates. This article examines the latest trend for both buyers and sellers.

Denver Housing Market Trends

It is reported that the Denver Metro Association of Realtors Market Trends Committee (DMAR) states in its October 2022 annual report that the median and average closing prices in September 2022 were among the largest ever recorded for that specific month.

Here are the closing rates of different types of homes in September 2022.

Residential Detached Attached

Average Close Price $671,024 $745,947 $486,773

Median Close Price $580,000 $632,000 $410,000

The data for this metro area consists of 11 counties: 

Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park counties.

The previous record in both of these categories occurred in September 2021. The median closing cost of residential homes was $618,977. For the past 12 months, the median home value rose by $52,047, resulting in an 8.4 percentage increase over the year.

DMAR provided the following information on residential properties within the 11-county Denver metro region in September 2022

• Listings active at the close of the month were: 7,683 (the historical average was 15,663)
• Days on MLS: 26 days (Up 100 percent year-over-year)
• Homes that are closed: 4,113 (Down 27.6 percent from year to year)
• Percentage of homes that experience the price decrease: 58%

Agents in real estate say that sellers are now beginning to make price cuts in highly sought-after areas, as well as other places that have yet to experience this phenomenon within the last two years.

In October 2022, DMAR experts maintained that Denver is in a seller's market, as the inventory is still below the 3-month average. But that perception slowly shifting towards neutral, as many active listings and the buyer attitudes become more befuddled.

Denver S&P/Case-Shiller Home Price Index

Even though Denver homeownership prices were at the top of the charts for 2022, the S&P/CaseShiller Home Price Index suggests that the prices are beginning to decrease for those looking to buy.

Denver's home price index was 328.51 in the spring of 2022. However, the latest available score dropped to 324.40 on July 20, 2022. The score for this region is more than the 307.44 standards for the nation, indicating that the cost of buying a house in Denver can be quite costly.

In a perspective of the past from a historical perspective, in the past, the Denver metro region index was just 226.84 on January 20, 2020. That was before the pandemic outbreak and subsequent spike in the real estate market.

Denver Housing Market Forecast

Recent trends in the decline of house prices indicate that Denver real property market is transforming from a demand for sellers to an unchanging scene.

The DMAR Market Trends Committee chairperson, Libby LevinsonKat the DMAR Market Trends Committee, believes that a market with a balance will be coming in within the last 16 years selling-friendly. The regular Denver real estate market lasts seven years; it is time to see a correction.

The housing price may fall when supply increases following the previously low supply levels in 2021. The properties in the premier and luxurious categories with an asking price of more than $5000 will probably be the ones to see the most significant decreases in value and stay longer.

But, houses priced competitively and listed below $500,000 should maintain stable value with minimal or no decreases.

Is It a Good Time to Buy a House in Denver?

The housing market in Denver is beginning to turn attractive for purchasers for the first time in more than ten years, as the average price is starting to drop.

The home price is over the national average, which is still a bit costly from a historical standpoint. A variety of Colorado first-time homeowner programs provide help with the down payment and can allow the purchase to be easier to afford with loans that are forgiven and grants.

The homes continue to be sold quickly and have an average time to list of about one month, as the number of homes available for sale remains minimal.

Who Should Buy a Home in Denver?

Be aware of bidding for homes to get housing or are considering buying on the traditional market, which has median selling prices of $300,000 up to $499,999.

The prices in both cases are not dropping rapidly as the housing market is in the initial stages of a correction while buyers savor higher inflation and the mortgage rate.

Homes attached and sold for less than $500,000 can be the most cost-effective choice. This is a possibility to purchase a kind of residential property at or lower than the listed price as per DMAR.

As a result, detached homes in the same price range are still competitive because of a supply shortfall. The high cost of homes also forces buyers to move to a lower cost range to increase their purchasing power.

When to Avoid Buying a Home in Denver

The waiting can be worth the wait for buyers looking to buy a home valued at more than $500,000 because the more expensive properties are receiving some of the largest price cuts.

The prices of luxury homes for sale in 2023 are likely to be lower in 2022 because buyers are less willing to offer today at the current price, and the mortgage rates are lower for traditional home loans and the jumbo loan.

Conditions in the market may favor sellers, but they're getting less power to price.

Is It a Good Time to Sell a House in Denver?

Denver remains a market that is favorable to sellers, and the majority of people who sell are able to build equity which means they could find it easier to finance an additional home. Thus, sellers who are considering selling should look into selling their homes right now while the market is positive.

There is a shortage of inventory, and the prices of listings are near their all-time highs. However, the price reductions are typically more frequent for properties that are listed over $500,000.

In addition, real estate agents note that prospective buyers are more likely to need a house inspection before the home's closing. The requirement for a pre-closing inspection is not uncommon, and many of the winning bids are avoiding this requirement due to the high demand and a lack of inventory.

For a faster sale of a house, buyers may be more careful and list at an affordable price. If the asking price is less, buyers may have a greater chance of paying more than the asking price or even waiving the condition for a brand of additional roof on their homes.

Are Denver House Prices Going Down?

There is a possibility of a short-term peak at the end of May 2022, as per the St. Louis Fed, despite average and median closing prices achieving record monthly highs, compared to the prior record highs of 2021.

Although prices are decreasing across a variety of properties, however, sellers may still be able to receive favorable offers from those who live outside of the city and are migrating to Denver. A Redfin report from July 2022 states that buyers who are moving to Denver will have a total amount of $983,761 compared to $879.964 for locals.

In the end, currently, the market can market homes with higher values. However, prospective buyers are getting more aware of their options and will have more to pick from.