According to the Census Bureau’s 2021 American Community Survey 5-Year Estimates, Denver is now the 19th biggest city in the United States, with a population of 711,463, as of 2021. Denver has witnessed dramatic growth in recent decades. From 1990 to 2021, Denver’s population increased by 52.1%, from 467,610 to 711,463. As with cities of the Pacific Northwest and West Coast in general, much of Denver’s growth over the course of the 2000s and 2010s was due to a large influx of Millennials.
Given this substantial growth, the Denver housing market experienced a striking rise in home prices and demand. Based on data sourced from Redfin
, the 12-month average (March 2022 to February 2023) median sale price for a home in Denver is $584,548. That is up 46.2% over the last five years, from a 12-month average (March 2017 to February 2018) median sale price of $399,804. However, like many other housing markets across the United States, rising mortgage rates in 2022 helped contribute to a cooling off housing market activity, such as rising levels of housing inventory, in several of the cities that comprise the Denver metro area.
Read on to find out key trends developing in the Denver housing market in 2023.
Denver Housing Market 2023: Overview
Analyzing the data from Redfin, the Denver metro area housing market is displaying signs of sustained strength in some areas while also showing signs of decreasing activity in the cities that make up the Denver metro area. In the city of Denver proper, home prices peaked in April 2022, when Denver’s median sale price reached an all-time high of $650,000. Since then, prices have declined steadily, so that by February 2023 (the latest data available at the time of publication), Denver’s median sale price was down to $556,125.
Home prices for the entire Denver metro area housing market mirror the pattern set by the city of Denver proper. Home prices in the Denver metro area also peaked in April 2022, reaching a median sale price of $615,000. From there, prices have gradually declined, reaching a median sale price of $560,000 in February 2023. Still, home prices in the Denver metro area remain historically high: Its 12-month average median sale price for March 2022 to February 2023 was $579,926, and the corresponding figure for the 12-month period March 2021 to February 2022 was $534,463. In just
one year, the 12-month average median sale price in the Denver metro area increased by almost $100,000: From $452,050 for the period March 2020 to February 2021, up to $534,463 for the period March 2021 to February 2022.
On the other end of the spectrum, the city that experienced the biggest year-over-year decline in home prices was Berkley, a suburb northwest of Denver. The 12-month average median sale price in Berkley for March 2021-February 2022 was $545,150. It then proceeded to decline by 5.8% over the next year, falling to a 12-month average median sale price of $513,601 for March 2022-February 2023. Comparing monthly home prices year-over-year reveals an even steeper decline: From a median sale price of $602,000 in February 2022, Berkley’s median sale price had fallen to $350,000 in February 2023 — a one-year decline of 41.9%.
Below is a table detailing the median sale prices in cities in the Denver housing market area and their change year-over-year from February 2022 to February 2023:
While the majority of cities in the Denver housing market have experienced declines in their home prices year-over-year, one needs to keep in mind that the spree of homebuying that took place from 2021 to 2022 drove prices up to historically high levels. If anything, these declines in home prices reflect a general moderation rather than a collapse. Overall, cities in the Denver housing market area all have median sale prices that are markedly higher than pre-pandemic levels.
Denver Housing Market: Inventory and Days on Market
Often when there is a cooling off in housing market activity, there tends to be an increase in available for-sale inventory. For the Denver housing market, most cities that make up the Denver metro area have witnessed large build-ups in their housing inventory year-over-year. The table below details the change in available for-sale inventory in the greater Denver housing market:
An additional useful metric for housing market activity is the length of time a home for sale spends on the market before being bought up. Redfin denotes this measure as days on market, which represents the monthly median days on market a home for sale sits before being taken off the market. In the Denver metro area, the median number of days on market of a home for sale rose from 5 days in February 2022 to 35 days in February 2023, equal to an annual increase of roughly 600% — equivalent to a seven-fold increase in just one year. And for many other places in the greater Denver housing market area, the median number of days on market has soared year-over-year:
Denver Housing Market: Homes Sold Above List Price
Typically, when a housing market is hot, homes tend to sell for more money than their original listed price. Conversely, when housing market activity slows down, the percentage of active listings selling above their list price tends to decline. In the city of Denver, in February 2022, 63.8% of home sales sold above their latest list price. Move forward a year and in February 2023, that percentage had fallen to only 27.5% of home sales selling above their list price. Analyzing all the main cities in the Denver housing market area, this trend holds for every single city: