June ’25 Market Report

Denver Real Estate Market Update: Balance, Bidding, and Building Costs

As we stepped into June, the Denver real estate market showed signs of recovery from the volatility we saw earlier in spring. In May, we saw a shift toward a more balanced dynamic. One where buyers are gaining leverage, particularly when properties need even minor updates.

Market Trends: What May Revealed

May marked a subtle but important shift:

• Pending sales for detached homes rose 8.15%
• New listings ticked up modestly
• Closed sales were down month-over-month

This movement appears to be a rebound from earlier disruptions tied to tariff announcements, which shook both consumer confidence and seller strategy.

Price Corrections and Buyer Expectations

Colorado is now among the top states for price reductions, signaling that many sellers are adjusting to buyer expectations. The trend? Homes priced right and needing minimal work are flying off the market, often with multiple offers. Overpriced homes or those needing renovation are stagnating unless the discount exceeds the remodel cost.

We believe buyers have become acutely aware of the rising cost of construction and remodeling, which hasn’t eased even as home prices held steady. That gap is forcing the market into a more rational pricing model, one where renovation costs must be baked into the listing strategy.

  The green line is showing the gap between the cost to build a 2,000 sq ft home and the median home price in Denver. A positive value now indicates it’s more expensive to build than to buy.  This is highlighting that fixer-uppers may no longer pencil out unless significantly discounted

Bidding Wars: Still Happening, But Selective

We’re still seeing bidding wars on high-quality, well-priced homes, but competition is more hesitant. Many buyers fear being the first to jump, and just as quickly opt out when the price creeps up.

This restraint is tied to that same build cost-to-price ratio. Unless the math works, even eager buyers are pumping the brakes.

Interest Rates: A Tug-of-War with Uncertainty

Mortgage rates remain in flux. While many hope for relief, the Fed is holding its ground, citing its dual mandate to manage both inflation and employment.

The recent tariffs have added pressure to inflation, prompting the Fed to delay any potential rate cuts until the economic data becomes clearer. June’s CPI report already showed a slight uptick. Possibly the first signs of tariff impact.

Our projection at The RealGroup: Rates are likely to stay steady through 2025 unless we see multiple months of inflation cooling.

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Advice for Buyers and Sellers in Today’s Market

For Buyers:
Partner with professionals who can help you estimate project costs accurately. Make sure the discount you’re getting for a fixer-upper is worth the work! Otherwise, focus on move-in ready homes where you’re likely to compete but also gain equity quicker.

For Sellers:
If your home needs work, be proactive. Price accordingly or offer an allowance upfront to attract savvy buyers. Overpricing in today’s climate will leave your property lingering while others move.

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Thinking of Relocating to Denver?

Whether you’re moving from across the country or just across town, now is the time to strategize smartly. At The RealGroup, we specialize in helping Denver homebuyers and relocation clients navigate the shifting terrain of our local real estate market. From cost analysis to renovation advice, we’re here to guide you home.