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Hoping for a drop in Denver home prices in 2025? Don’t count on it.
Despite various market changes, Denver's housing market is poised for growth, driven by strong demand and limited supply.
Let’s explore why property prices in this vibrant city are expected to climb in 2025.
We rely on solid, up-to-date data and statistics from multiple credible sources, ensuring our analysis is grounded in reality.
By thoroughly examining this information, we draw our own conclusions, which we share at the end of this blog post. Enjoy the read!
How this content was produced 🔎📝
This article offers thoughtful insights and analysis based on reliable sources, but it should not be considered financial advice. We work hard to research, compile, and analyze data to give you a well-informed perspective. However, as you can guess, our analysis involves subjective choices, such as source selection and methods, and it cannot fully capture the market's complexity. Please, always do your own research, consult professionals, and make decisions based on your own judgment. Any financial risks or losses are your responsibility. Additionally, you should know that we have no affiliation with the sources mentioned, ensuring our analysis is completely impartial.
1) In Denver, there are about 0.48 homes per person, indicating a limited housing supply
Signal strength: strong
The fact that there is around 0.48 home per inhabitant in Denver indicates a relatively tight housing market.
When the number of homes per person is low, it suggests that housing supply is limited compared to demand, which can drive prices up. In Denver, this is particularly significant because the city has been experiencing rapid population growth due to its thriving job market and appealing lifestyle.
Locals know that Denver's unique appeal, including its outdoor recreation opportunities, attracts many new residents each year. This influx of people, combined with the limited housing supply, means that competition for available homes is likely to increase, pushing prices higher.
If the number of homes per inhabitant were to increase significantly, say to 0.6 or more homes per person, it might indicate a more balanced market, potentially stabilizing or even reducing prices.
Source: USCensus
2) Three major websites confidently predict that home prices in Denver will rise in 2025
Signal strength: strong
There are currently three major websites forecasting a positive growth for home prices in Denver in 2025, which is a promising signal for potential investors.
Among these forecasts, Realtor is the most optimistic with an expected increase of 8.00% in home prices, followed by Redfin at 4% growth, and Zillow with a more modest prediction of 1.10% increase. The significant gap between these forecasts suggests varying levels of confidence in the market's potential.
While these predictions are encouraging, it's important to remember that forecasts should be taken with caution as they are based on assumptions and models that may not fully capture future market dynamics. Therefore, we will also rely on strong, reliable, and actual data to make a well-informed investment decision.
If these forecasts were to predict a negative growth or decline in home prices, it would signal a potential downturn in the market.
Sources: ZillowForecasts, RedfinForecasts, RealtorForecasts
We created this infographic to show how property prices in Denver compare to other big cities in Colorado. It shows the median price as well as the price per sqft, making it easy to see which places might offer the best value. We hope you find it helpful.
3) Denver's "vacancy rate" is just 6.5%, showing it's a bustling and competitive market
Signal strength: moderate
The vacancy rate in Denver is currently at 6.5%, which is considered low and suggests that most properties are occupied.
This low vacancy rate indicates a highly occupied and competitive market, meaning there is strong demand for housing. When demand is high and supply is limited, prices tend to rise as more people compete for fewer available homes.
In such a market, well-maintained, single-family homes in popular neighborhoods like Cherry Creek are often rented quickly. These properties are attractive to renters because they offer desirable living conditions and prime locations.
If the vacancy rate were to increase significantly, say to above 10%, it might indicate a shift towards a less competitive market, potentially stabilizing or even lowering prices.
Sources: NeighborhoodScout, DataUSA, USCensus
4) Denver's "Livability" score of 72 indicates it's a good place to live
Signal strength: moderate
The livability score of 72 in Denver is considered good because it reflects a balance of factors that make the city attractive to residents.
One key characteristic is the proximity to the Rocky Mountains, offering residents easy access to outdoor activities like hiking and skiing, which enhances the quality of life. Additionally, Denver boasts a thriving cultural scene with numerous museums, theaters, and music venues, making it a vibrant place to live.
Moreover, the city has a strong job market, particularly in industries like technology and healthcare, which attracts professionals and supports economic growth. These factors contribute to the assumption that housing prices are likely to rise in 2025, as more people are drawn to the area for its livability.
If the livability score were to drop below 60, it might indicate declining conditions, potentially affecting housing demand negatively.
Source: AreaVibes
Our team designed this infographic to show how competitive the real estate market in Denver is vs. other major cities in Colorado. It shows the percentage of sales above the list price, a key indicator of market competition.
5) In Denver, home prices have risen by an average of 8.2% annually over the past decade
Signal strength: moderate
The fact that home prices in Denver have appreciated at an average rate of 8.2% over the last decade is a noteworthy signal for potential investors. This consistent growth rate suggests a history of demand and price growth, which can indicate favorable conditions for future increases.
While a positive 10-year average appreciation is encouraging, it's important to remember that past performance doesn’t guarantee future results. However, it remains a valuable indicator to consider when evaluating the potential for future price increases.
Investors should be aware that other factors, such as economic conditions and market trends, also play a significant role in determining future housing prices. Keeping an eye on these elements can help in making informed decisions.
If the appreciation rate were to drop significantly, say to below 3% over a similar period, it might suggest a different trend and warrant a more cautious approach.
Source: NeighborhoodScout
6) Denver's employment rate is impressively high at 72%
Signal strength: minimal
The employment rate in Denver is at 72%, which is considered high compared to other regions in the United States.
This high employment rate suggests that more people have stable incomes, which can lead to increased demand for housing as people look to buy homes. When more people are employed, they are more likely to invest in real estate, driving up housing prices due to higher demand.
In Denver, the major employment sectors include technology, healthcare, and finance, which are known for offering well-paying jobs. Companies like Lockheed Martin and HealthONE employ a significant number of people in the area, contributing to the robust employment rate.
If the employment rate were to drop below 60%, it might indicate a weakening job market, which could lead to a decrease in housing demand and potentially lower housing prices.
This infographic we have made will show you how market values have changed during the last decade in Denver vs other major places in Colorado. Here, the percentage increase or decrease in market value will help you see long-term trends.
7) In Denver, about 22% of homes sell for more than their listing price
Signal strength: minimal
In Denver, around 22% of sales close at a price higher than the listing price, which is a strong indicator of demand. When buyers are willing to pay more than the asking price, it suggests that competition among buyers is intense.
This competition often leads to increased housing prices as buyers try to outbid each other. If more people are paying above the listing price, it means that the market is favoring sellers, who can set higher prices.
Such a trend is a clear signal that housing prices are likely to rise in the future, as demand continues to outpace supply. However, if the percentage of sales closing above the listing price were to drop significantly, say below 10%, it might indicate a cooling market.
Source: Zillow
So, are prices going to climb in Denver in 2025? Absolutely
Denver's housing market is poised for a price increase in 2025, driven by several compelling factors.
Firstly, the city has a limited housing supply with only 0.48 homes per person, which is significantly low. This scarcity, combined with Denver's rapid population growth, means that demand is outstripping supply, naturally pushing prices up. Additionally, the vacancy rate is just 6.5%, indicating a bustling and competitive market where properties are quickly occupied, further driving demand.
Moreover, three major websites predict a rise in home prices, with Realtor forecasting an 8% increase. This aligns with Denver's historical trend of an 8.2% annual appreciation over the past decade. The city's high employment rate of 72% and its attractive livability score of 72 also contribute to its appeal, drawing more residents and boosting housing demand.
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