As spring 2025 transitions into early summer, the Denver real estate market is continuing to evolve, influenced by both familiar dynamics and new economic pressures. Since the COVID-19 housing boom in 2020–2022, Denver has seen rapid appreciation, often accompanied by fierce bidding wars. However, since the end of 2022 and now into 2025, the trends are marking a shift towards relative ‘balance’—though not without its own set of challenges. Increased inventory, moderated demand, and external factors like tariffs are helping to reshape the local landscape. Let’s take a closer look at where the market stands, who benefits from the current conditions, and the broader economic influences at play.
The first few months of 2025 have felt similar to what 2023 and 2024 have experienced. The number of available homes has risen:
Single-family homes: Increased by 61% year-over-year
Condos/townhomes: Increased by 78% year-over-year
New listings: Increased by 34% year-over-year
This surge in inventory has pushed the months' supply of homes to 2.9 months—an increase of nearly 55% compared to the same period last year. For buyers, this could mean more options and less pressure to make snap decisions. While homes are still selling (and some absolutely still selling the first weekend on the market), the constant frantic pace that we felt essentially all of 2020-2022 has eased, allowing for more thoughtful purchasing decisions.
Interestingly, despite the increase in inventory, home prices in Denver have held steady, with single-family homes appreciating by 5.2% year-over-year, bringing the median price to $669,000. While not as aggressive as previous years, this growth points to steady demand even as more listings become available.
The current landscape presents unique opportunities for both buyers and sellers, each with its own set of advantages.
Buyers: With more listings to choose from and properties staying on the market longer (averaging 21 days now, up from 12 days last year), buyers have the flexibility to negotiate and take their time. The “Hunger Games” type competition has softened. ALTHOUGH (something to absolutely note here) well-priced, move-in-ready homes in desirable neighborhoods are absolutely still seeing multiple offers. I find myself still in competitive situations on a weekly basis for really great properties. So patience and creative strategies are proving effective for buyers in 2025.
Sellers: While there is more inventory on the market, Denver's steady demand (particularly in sought-after areas) keeps the market very favorable for well-prepared sellers. Homes that are priced correctly, staged beautifully, and marketed effectively continue to attract strong interest. Sellers looking to make a quick sale should be realistic about pricing in a more balanced market.
Tariffs on construction materials continue to ripple through the Denver housing market. On February 10, 2025, President Donald Trump reintroduced 25% tariffs on steel and aluminum imports, which went into effect on March 12, 2025. These tariffs are applied broadly, affecting all imports of steel and aluminum, regardless of origin. This lack of exemptions means that suppliers, builders, and manufacturers are facing uniformly increased costs across the board, impacting not only Denver but also the broader national housing market.
The most immediate impact is seen in construction materials like rebar, structural beams, roofing metal, and siding—key components for residential and commercial building projects. With the cost of raw materials rising by as much as 18% in some cases, developers are experiencing tightened profit margins, and some projects have even stalled as budgets are re-evaluated. Additionally, suppliers are passing on these increased costs to builders, which is then reflected in the pricing of new homes. Estimates suggest that the average new single-family home in Denver is now approximately $9,200 more expensive due to these tariffs. This price hike is particularly challenging for affordable housing projects, where budgets are already stretched thin.
As the market absorbs these changes, the ripple effects are becoming apparent. Developers are opting for smaller projects, reducing speculative builds, and in some cases, pausing projects until material prices stabilize. This reaction could further strain inventory in the near future, especially if demand remains steady or grows. For consumers, the increased cost of new builds is pushing more buyers toward existing homes, subtly shifting demand and influencing resale prices.
To illustrate the impact, let's consider a home priced at $750,000:
Estimated Increase: With construction costs projected to rise by 4% to 6% due to tariffs, this translates to an additional $30,000 to $45,000.
New Home Price: The total cost could therefore increase to approximately $780,000–$795,000.
This significant increase can affect affordability, especially for first-time buyers or those on tight budgets.
The effect of these tariffs is tangible. As mentioned earlier, costs for new construction have risen sharply, adding an estimated $9,200 to the price of building a new home. This is translating into about a 1.5%–1.7% increase, depending on the overall property value. While resale properties remain somewhat insulated, the impact is evident in new developments, driving up prices and putting pressure on affordability.
Higher construction costs are also nudging some buyers away from new builds and toward resale homes, subtly shifting demand. Builders are responding by scaling back speculative projects, which could tighten inventory in the coming months if demand remains steady.
Economic uncertainty tied to tariffs is also affecting mortgage rates, which have fluctuated over the past few months. Currently hovering around 6.75%, rates are lower than last year's peak but still volatile as markets react to broader trade implications.
Looking forward (although none of us have a crystal ball [as much as I wish I did!]), Denver's real estate market is expected to maintain steady, modest growth. Projections suggest home prices will rise between 3.8% and 4.4% over the next year, provided that inventory levels continue to stabilize. The tariff situation remains a wild card; any adjustments or escalations could further influence construction costs and, by extension, housing affordability.
For both buyers and sellers, strategy remains key. Buyers should take advantage of increased options, while sellers should be mindful of pricing and presentation. With balanced conditions and new economic variables at play, Denver's market remains one to watch closely.
Denver's real estate market is constantly evolving, and staying informed is key to making confident decisions—whether you're buying, selling, or simply keeping an eye on market trends. If you have any questions or want to discuss how these shifts might impact your own real estate goals, reach out to me. I'm always here to provide insights and guidance to help you navigate the market with clarity and confidence.
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References
Politico (2025). Trump Economy and Housing Market. Retrieved from [politico.com]
BHG (2025). Impact of Tariffs on Construction Costs. Retrieved from [bhg.com]
MarketWatch (2025). Home Builders' Outlook. Retrieved from [marketwatch.com]
WSJ (2025). Retail Property Market Outlook. Retrieved from [wsj.com]
Business Insider (2025). Tariff Impact on Real Estate. Retrieved from [businessinsider.com]
NBC New York. (2025). Tariffs could raise prices for new homes—see how much more it could cost buyers. LinkNBC10 Philadelphia+2NBC New York+2NBC Boston+2
CoreLogic. (2025). Will Trump Tariffs Harm Home Affordability?. LinkCoreLogic
Construction Owners. (2025). Tariffs Could Raise Single-Family Home Construction Costs by $7,500-10,000, Report Finds.
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