Denver housing market: Everything you need to know
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Buying and selling a home in Denver is beginning to look much different in 2023 than it has over the past few years. The Mile High City was booming well before the pandemic as newcomers flocked here to be close to the mountains and enjoy the laid-back lifestyle in one of the best places to live in Colorado. The influx made buying a home feel impossible for anyone on a tight budget. Now, the city’s population growth is slowing, and prices are falling. In 2023, the Denver housing market is rebalancing in a way that will give buyers more opportunity to plant roots here (as long as they can deal with higher mortgage rates).
Denver housing market trends
The current Denver housing market can be summed up in four words: more homes, lower prices. According to the Denver Metro Association of Realtors (DMAR), in January 2023, there were 4,120 homes for sale in Denver — a huge increase from the 1,184 properties available one year earlier.
The increase in inventory is, in turn, pushing prices down. Per DMAR, the median sale price in January was $536,500, which represents a 3.3 percent decrease from the month prior. With more supply, buyers are also able to take their time: The typical home spent 46 days on the market before selling, a 7 percent month-over-month increase.
Denver housing market predictions
What’s in store for the housing market this year? Well, if you think the Denver housing market might crash, think again. All signs indicate that it’s simply returning to a sense of normalcy. Rising mortgage rates have cooled the market, and there is an ongoing shift that is returning some power to prospective buyers. By the summer of 2023, real estate company Knock predicts that the Denver market will actually favor buyers.
Buying a home in Denver
Trying to buy a house in Denver comes with a lot of questions. Here are three critical considerations to make as you begin your house-hunting journey:
How much will you need for a down payment?
Home prices have ticked down in Denver, but make no mistake: Buying a house here still requires a lot of cash. Within the city limits, median sale prices are $578,000, which would require a minimum down payment of $17,340 (3 percent) for a conventional loan if you have excellent credit. And to avoid paying mortgage insurance you’ll need to come up with a 20 percent down payment, which adds up to more than $115,000. If those numbers scare you, you may be able to find some help via one of Colorado’s first-time homebuyer programs.
Which parts of Denver offer the best value?
As you do the math on how much house you can afford, keep in mind that prices vary widely across the metro area. While the median price in Douglas County was $685,000 at the start of the year, the median in Aurora was just under $490,000. No matter where you’re thinking of buying, be sure to factor in the total cost of living in Denver, too, as you’ll need to budget for other essentials like food, utilities and transportation.
Are you actually ready to buy?
Buying a house will be one of the most expensive transactions in your life, so make sure you’re ready to become a homeowner. If your credit score is in excellent shape, your overall debt load is manageable and you have a decent chunk of cash for a down payment, you’ve checked some of the most important boxes already. However, you also need to think about your long-term future. Are you planning to stay in the same home for at least the next five years? If so, the closing costs will be worth the investment.
Selling a home in Denver
If you’re thinking about selling your place in Denver, it’s important to consider three big questions before you make your listing live.
How much will this cost?
Selling a home isn’t all profit; you’ll need to factor in the costs of getting a deal done. If you hire a real estate agent (which you should; more on that below), you’ll typically pay around 6 percent of the sale price in commission fees. While that’s the biggest chunk of the costs to sell a home, you’ll need to plan for other expenses that will eat into your proceeds, too, like a title insurance policy and attorney fees.
Is now a good time to sell?
Sell now, or wait? It’s a tough question that plenty of homeowners are facing right now, especially since sellers in Denver don’t have quite the edge they used to. Nationwide, the housing market tends to pick up steam in the summer, so you could think about waiting to list until you’re sure that a late-season snowstorm won’t derail your open house. However, if you’re ready to relocate, there’s no sense in waiting too long. You might not cash in quite the way you would have if you’d sold in 2021, but with the right real estate on your side, you can still secure a great offer.
How low are you willing to go?
If you really want to make a deal, be ready to negotiate. Data from Redfin shows that the majority of Denver sellers agree to concessions, which means that they help cover a portion of the buyer’s closing costs. Additionally, Redfin’s numbers show that homes in Denver have been selling for 98 percent of their initial asking price — a good number, but not quite full-price, and very different from the peak of the pandemic, when buyers were in bidding wars with over-ask offers.
Finding a local real estate agent
Buyers and sellers have plenty of different considerations, but there is one piece of the puzzle that both sides of the bargaining table share: Finding a great real estate agent is more important than ever. The housing market in Denver varies from neighborhood to neighborhood, so trying to navigate the buying or selling process here on your own can lead to costly mistakes. It’s smart to have an experienced agent who knows the city well at your side.
Yes, home prices in Denver have fallen over the past year or so. According to the Denver Metro Association of Realtors, the median sale price in April 2022 was $624,950. By January 2023, that figure was $536,500 — nearly $90,000 lower.
While there is no legal requirement to hire a real estate agent when you’re buying or selling a home in Denver, it’s definitely smart to have one by your side. Realtors negotiate home sales every day, and their expertise can make a huge difference in eliminating some of your stress and ensuring that you get the best deal possible.
As of January 2023, the median closing price in the Denver area was $536,500, according to the Denver Metro Association of Realtors. Nationwide, the median home price is $359,000.
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