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🏔️ Denver Real Estate Market Update – April 2025 Are Tariffs Impacting Denver Home Prices?

04/29/25  |  Madison Kissel

Are Tariffs Impacting Denver Home Prices?

 

🏔️ Denver Real Estate Market Update – April 2025
Are Tariffs Impacting Denver Home Prices?

 As spring 2025 unfolds, the Denver real estate market is showing a mix of familiar trends and new challenges. Over the last few years (mainly due to the COVID-19 housing boom in 2020–2022), the Denver housing market has seen rapid price increases, often accompanied by bidding wars, but we’re now in a period of transition. Increased inventory, shifting demand, and external factors like tariff impacts are reshaping 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.

📊 Market Overview: A Shift Towards Balance

The first quarter of 2025 saw significant changes in the Denver metro real estate market. While 2023 and early 2024 were marked by tight inventory and fast-paced sales, things are now moving in a more balanced direction. The number of available homes has jumped sharply:

  • Single-family homes: Up 54% year-over-year

  • Condos/townhomes: Up 73% year-over-year

  • New listings: Increased by 29% year-over-year

This surge in inventory has led to a noticeable increase in the months' supply of homes, now sitting at 2.7 months—a 50% rise compared to the same time last year. In simpler terms, this means there are more homes to choose from, and buyers are not forced into making quick, emotional decisions like before.

Despite this larger pool of listings, prices have remained relatively stable, which is a welcome sign for many buyers who were previously priced out of the market. Single-family homes, for example, saw a modest 4.7% increase in price year-over-year, bringing the median price to $660,000. While this isn’t the rapid appreciation that defined the previous few years, it indicates a market that is growing in a more sustainable and predictable way.

🧭 Who Benefits: Buyers or Sellers?

The current market is offering something of a win-win for both buyers and sellers, although each group has its own set of advantages.

Buyers: For those looking to purchase a home, the conditions today are relatively favorable—certainly as compared to the last 3 years. Increased inventory means more choices, and a slower sales pace means you can take your time with decisions. Homes are staying on the market longer, with the average listing time now at 18 days, up from about 10 days last year. This gives buyers more breathing room to negotiate. Additionally, the greater supply of homes means less competition overall, which can help mitigate the risk of bidding wars, a problem that plagued the market just a few years ago. However, with this all being said, I find myself in competitive situations still on a weekly basis. The homes that are well-priced, in desirable locations, and remodeled/move-in ready are absolutely still moving quickly and seeing competition.

Sellers: On the flip side, sellers still have opportunities to take advantage of the relatively stable prices, which continue to attract buyers. Although there is more inventory and more competition for sellers, Denver’s strong demand—especially in desirable neighborhoods—still creates a thriving market for those who want to list. Sellers who price their homes competitively and present them well can still see quick offers, particularly in neighborhoods that are in high demand. For sellers to be successful in this market, it’s paramount to price well, stage, clean, and have a dialed-in marketing approach.

In general, both buyers and sellers are likely to find success in this market, but success will depend on strategy. Buyers should be patient, while sellers should be realistic about pricing in a market with more options.

🏗️ The Tariff Impact: Construction Costs and Affordability

One of the key economic factors currently affecting the Denver housing market is the newly implemented set of tariffs on construction materials. On February 10, 2025, President Donald Trump signed executive orders imposing 25% tariffs on all steel and aluminum imports into the United States, which officially went into effect on March 12, 2025. These tariffs apply broadly—with no exemptions for countries like Canada, Mexico, the EU, Japan, or South Korea—making their impact widespread across multiple sectors, including housing.

🔧 Increased Construction Costs

The cost of materials for new construction has risen sharply in response to these tariffs. For example, tariffs on items like lumber and steel have added an estimated $9,200 to the cost of building a new home. This equates to approximately a 1.53% increase on a $600,000 home, 1.31% on a $700,000 home, and 1.15% on an $800,000 home. While these cost increases may not be as immediately visible in the resale market, they are directly influencing the price of new homes—thereby putting pressure on overall affordability for buyers seeking newly constructed properties.

Additionally, higher new home costs may create indirect upward pressure on resale prices, as buyers shift their focus away from expensive new builds and increase competition in the existing home market.

📉 Mortgage Rate Volatility

Another side effect of the trade war and tariff impositions is the increased economic uncertainty, which has led to more volatile mortgage rates. As these tariffs affect the broader economy, they create uncertainty in financial markets, leading to fluctuations in mortgage rates. It’s unclear how everything will shake out nationally, as this is an ever-evolving situation.

🔮 Looking Ahead: What to Expect

Looking to the future (although none of us have a crystal ball [as much as I wish I did!]), experts predict a continued period of relatively stable growth in the Denver real estate market. Home prices are expected to rise modestly by 3.5% to 4.2% over the next 12 months. Factors like mortgage rates, the pace of new construction, and the level of economic uncertainty (including tariffs and global trade issues) will play significant roles in shaping the market’s future.

As for the impact of tariffs, there’s a strong chance they’ll continue to put pressure on construction costs, affecting both new builds and affordability in the market overall. However, if inventory continues to increase and interest rates remain manageable, the market could experience some stability that benefits both buyers and sellers.

 

 

References

 

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