Q3 Denver Market Update:

A Surge in Listings and What It Means for Buyers and Sellers

At the end of August, a statistic about the Denver real estate market left me stunned: 10,500 active listings—a staggering 56% increase year-over-year from August 2023. This dramatic rise in inventory is signaling a shift in the market that is hard to ignore, even though we’re not yet in a technical buyer’s market. But make no mistake, we are heading in that direction.

So, what does this mean for buyers and sellers? Let’s break it down by looking at some Denver housing market trends.

The Rise in Inventory: A Fatiguing Market?

The surge in active listings is one of the most significant changes in the Denver Metro market. It indicates that homes are staying on the market longer, and sellers are not finding buyers as quickly as they once did. This slow-down in buyer activity is leading to a higher days on market metric, which means properties are taking more time to sell.

Despite this, we’re not seeing the kind of dramatic drop in sales volume that would suggest a full-blown market cooldown. The absorption rate—the rate at which homes are sold relative to available listings—has stayed relatively steady, meaning buyers are still purchasing homes, just not at the frantic pace seen in recent years.

However, as more listings come onto the market and sit unsold, it’s becoming clear that we’re entering a period of market fatigue. This can be attributed to several factors, including rising interest rates, economic uncertainty, and changing buyer preferences.

Are We Heading Toward a Buyer’s Market?

While it’s tempting to look at the increase in inventory and slower sales and declare that we’re in a buyer’s market, that’s not quite the case—yet. A true buyer’s market occurs when there’s more than six months' worth of inventory available, meaning it would take six months or more to sell the current stock of homes at the current sales pace. We’re not there yet, but we’re certainly moving in that direction.

Right now, the market is in a transitional phase. Sellers are beginning to face increased competition as more homes flood the market, and buyers are gaining some negotiating power as homes linger longer on the market. However, sellers still have the upper hand in many cases, especially if their homes are priced right and in desirable locations.

What to Expect Moving Forward

My prediction is that we won’t see month-over-month increases in inventory at the same dramatic rate. In fact, the market is likely to stabilize around the current level of 10,000 active listings for the foreseeable future. Even if interest rates begin to drop as we move into 2025, the market may remain sluggish compared to the past few years of rapid growth.

One key factor to keep an eye on is how interest rates evolve over the next year. If rates drop significantly, we could see more buyers returning to the market, which could absorb some of the excess inventory and stabilize the market. However, even with rate drops, I don’t expect to see the same kind of urgency in the market that we saw during the height of the pandemic housing boom.

Opportunities in a Shifting Market

Although the market may be fatigued, that doesn’t mean there aren’t opportunities. In fact, there are underpriced homes hitting the market that are generating multiple offers. These homes are typically priced strategically by motivated sellers who understand the importance of positioning their property competitively.

For buyers, this means there are deals to be had, but it’s crucial to be prepared for active negotiation. Even in a slower market, well-priced homes in prime locations can still attract competitive bidding.

For sellers, the key takeaway is that competition is heating up. Pricing your home accurately and making it stand out—whether through staging, minor upgrades, or strategic marketing—will be crucial to attracting buyers. Be prepared to face longer days on market, and understand that homes not priced or presented correctly may struggle to sell in this environment.

Final Thoughts

The Denver real estate market is undergoing a transformation. While we’re not in a buyer’s market yet, we’re clearly moving toward one. Inventory is up, days on market are increasing, and sellers are finding it harder to secure quick sales. But even in this changing landscape, opportunities remain for both buyers and sellers.

For buyers, it’s a chance to find underpriced gems and negotiate better deals. For sellers, it’s a wake-up call to get strategic about how to present and price your home. As the market continues to shift, staying informed and adaptable will be the key to success.

In the coming months, we’ll be keeping a close eye on how these trends develop, but one thing is clear: the Denver real estate market is not what it was last year, and everyone—buyers, sellers, and agents alike—needs to adjust accordingly.

Whether you're buying or selling in this evolving market, make sure you have a strategy in place and are working with an experienced Denver real estate agent. There’s no doubt that the landscape is changing, but with the right approach, both buyers and sellers can still come out on top.