There is relief in this market! The biggest question I’m getting asked right now is, “what is going to happen to real estate this year?” Well, my crystal ball – as I always say – is totally and completely broken and, as your real estate expert, have no fear – I don’t really need one because history tells us a story. So here is your 2025 Housing Market Update and Forecast. Average home prices are about 5% higher than this time last year with the average value being $775,000. Of the last 15 years, we’ve seen home prices go up in 13 of these, including this past year…quite a relief for many in this market. While I think everyone is past the home value drops of 2008, what we need to remember is that – without any caution – June of 2022 quickly became the ‘peak’ of real estate which has since passed. Thankfully, this past year, the average price outperformed that so we are on the up and up.

We are down 45% in listings. Currently, we have 6,500 active listings in the Denver Metro which is up 22% from 1 year ago. It is also more inventory for this time of year than we’ve had in more than 5+ years. New listings – on the other end – are only up 10% year over year and we are seeing the opposite affect on brand new listings than currently active ones where we have less new listings right now than we have had in the last 5+ years. Buyers shopping in the market this Fall saw this as many listings that were either (A) improperly priced or (B) had impatient sellers who were withdrawing or expiring left and right. In just 60 days, the market went from more than 10,000 homes to 6,500. Meanwhile, we’ve been properly counseling our sellers to stay on the market during the colder weather and holiday season as this can have a positive impact. We’ve already started to see new buyers come out of the woodwork as the new year has begun, beginning their new home shopping experience…and they have our sellers’ homes to look at!

It could take 100+ days to sell your home. It’s important to note that this is the time of year where average days on market is (always) at all time highs for the entire year. Currently, average days on market is 55. This means that some homes are going in 1 week and others are taking 3+ months. The latter of this is very normal for a ‘normal’ market, like the one we are in now. Patience is key until mid to late February. While pricing a home is 80% of selling to achieve a ‘normal’ days on market window, a variety of factors play into it as well. That’s why I always say real estate is an art, not a science. These metrics can guide us, but aren’t the cold hard truth. It is important to have an agent who can counsel you through the facts so you don’t make poor decisions. We saw a lot of other agents’ sellers get antsy the last few months and witnessed some serious price drops as these sellers were desperate, panicked and thought the ‘only’ way to sell was to reduce the price. While the market, as a whole, will recover from this, these particular sellers lost out on some tens of thousands of dollars in their home sale. In fact, some of our buyers were able to take advantage of this situation and get under contract $100,000 under original list price – all because a seller was anxious. Our sellers, however, stayed the course and had more showings than the average sellers because of our fierce listing preparations.

So where is the market right now? The market is sitting between the busyness we experienced in 2021 through the first half of 2022 and the lulls we saw from the second half of 2022 through all of 2023. This is a healthy market where we anticipate more people will take advantage of this year. As a metropolitan, we had 41,000 homes close in 2024 which is one of the lowest numbers we’ve had since 2012. This means 20,000 less people moved over the last two years. The build up is from higher prices, higher rates and lower affordability. We saw less people taking ‘advantage’ of the market and more people needing to move for work, family or other life changing events. With this in mind, we know more people this year will have waited their ‘extra’ year or two in their current homes and 2025 might be their – or your – year to move.

My pro tip? Start sooner! We see our sellers selling in Q1 vs Q2 can have some advantages to being the ‘leading’ or first sellers of the year. We once had a seller who wanted to sell in February and she, on her own accord, didn’t end up getting to market until the last week of April. While her success selling outperformed the market, the results she wanted were something only a February market could bring. Just last year, another one of our sellers shared they didn’t want to sell in Q1 because they wanted to move when school ended and didn’t want to take the kids out of school early. While their goals didn’t change, the plan did and we were able to get them to market in March and not worry about moving until school ended in May! This was a big win-win as they were able to leave for Spring Break and avoid showings, all while going under contract in just one weekend.

I am excited for where the market is right now! We anticipate rates will come down at some point over the next year. We always recommend to “date the rate and marry the home”. This means, don’t try to time the market (or interest rates!) and wait for rates to come down before you move. While it is an impossible task, our amazing lending team has fantastic options on loans and buy-downs now as well as future refinances for later. You truly don’t have to wait! Just as much as we saw home prices go up this past year, we predict they will go up, perhaps even more, in 2025, and you can’t out save the market.

All information referenced and credit to goleshteam.com/stats.