Three years after the pandemic housing boom, Denver’s real estate market remains stuck in limbo, with stubborn mortgage rates and economic uncertainty freezing home prices near 2022 levels despite a surge in available properties.
While the broader Denver Metro housing market treaded water with near-flat prices in 2025, the luxury segment above $1 million showed surprising resilience, with average prices climbing to their highest levels in at least five years, according to the Denver Metro Association of Realtors’ December report.
Yet even deep-pocketed buyers weren’t immune to economic headwinds.
Luxury properties took nearly 9 percent longer to sell compared to 2024, as even millionaires thought twice before committing.
Sellers hoped Federal Reserve rate cuts would revive demand, but mortgage rates remained stubbornly high throughout 2025, dampened by persistent inflation fears, tariff uncertainties, and bond market volatility.
“In many ways, real estate became collateral damage from wider economic forces beyond the industry’s control,” said Amanda Snitker, chair of the DMAR Market Trends Committee.
“These economic variables shaped housing market psychology more than traditional supply-and-demand fundamentals.”
Record sales amid a slower pace
In the luxury market, the year closed with headline-grabbing transactions: a $17 million single-family home in late November and a $10 million penthouse in October.
But the trophy sales masked a more cautious reality, with homes spending 9 percent more days on the market as buyers conducted more thorough due diligence and demanded perfection for premium prices.
Detached homes dominated luxury sales, accounting for 95.6 percent of the 5,567 properties sold for $1 million or more.
Properties priced between $1 and $2 million maintained less than three months of inventory, while homes above $2 million showed nearly five months of supply—signaling softer demand at ultra-premium price points.
“In the $1 million-plus segment, buyers are taking their time and sellers often need to be patient, but preparation and realistic pricing can make all the difference,” said Andrew Abrams, market trends committee member.
“As we move into 2026, more consistent seasonal trends should help bring greater confidence to a process that’s inherently stressful.”
2026 market outlook: More of the same
Don’t expect fireworks in 2026.
Steve Danyliw, former chair of the market trends committee, expects loan rates to remain elevated and the job market to grow slowly, with housing demand constrained by ongoing economic uncertainty.
“In short, the slower pace that defined 2025 is not going anywhere,” he said.
Snitker advised buyers to pursue creative financing, including rate buydowns, while exploring diverse neighborhoods, and urged sellers to price aggressively from the start.
“Investing in presentation and pre-listing preparations is essential,” she said, adding that sellers must remain flexible on terms to address persistent affordability concerns that show no signs of easing.
The news and editorial staffs of The Denver Post had no role in this post’s preparation.