Market Update »

I can hardly believe that it’s officially 2026, and that’s not just because we couldn’t find a local channel to watch the ball drop at midnight on New Year’s Eve! With 2025 in the rearview mirror, all focus is on the year ahead and what it means for Denver’s real estate market. Before reading any further, if you haven’t read our 2025 market recap article, take a moment to pause here and read that article first. If you’re continuing on, then we’re going to assume you read the article and have a fair understanding of the market conditions throughout 2025, which is important.

This time a year ago in 2025, we were coming out of a slow end of year season for the Denver real estate market, with homes sitting on the market and very few willing buyers looking at them. The end of 2025 felt very similar, except instead of sellers making price reductions and doing anything they could to sell their homes, sellers were deciding to remove their homes from the market or just letting them sit with a for sale sign in the yard. With the end of 2024 and 2025 feeling very similar, it makes us wonder if 2026 is going to be a very similar market for Denver home sellers and buyers as the previous year. Since I don’t have a crystal ball, it’s my best prediction that the year will follow 2025’s trends closely. In fact, we’re already starting the year very similar to what we did in 2025, with a big increase in buyer activity right after the first of the year with many homes that were sitting prior to the New Year going under contract, just like we saw a year ago today.

If 2026 is going to follow a similar trend as 2025, then this means, we’ll see a wave of buyers the first few weeks of 2026 bring some life into the market, and then the market die down once they are under contract. After that, we’ll see a downturn in showings and homes going under contract until the next wave of buyers. It is my prediction that trend will continue throughout the first half of the year, allowing values to increase modestly until Denver’s summer market. If this prediction is accurate, then home sellers will continue to have to be realistic with pricing their homes to attract buyers and outweigh their competition. Homes that are priced too high for their finishes will struggle to go under contract. Homes that do go under contract may also have to be flexible on their accepted terms, likely giving buyers concessions for rate buydowns and/or closing costs. In the event that a home does get more attention the first few weekends on the market, and a seller can get two or more buyers submitting offers at the same time, it may still be possible to get list price with no concessions or even slightly above. However, it’s my prediction that we will not see the average home sell above list, and if it does, it will be by a modest $5,000 to $10,000 above. With this prediction, sellers will have the opportunity to sell their homes, but the advantage will likely still be with buyers throughout 2026.

The reason I predict the Denver real estate market will be very similar to 2025 in 2026 is due to there being very little change as far as the economy, estimated interest rate cuts by the Feds and overall higher inventory levels. The Feds have indicated they are expecting very few interest rate cuts this year, which although mortgage rates do not follow the fed rates, they usually tend to follow a similar pattern. This means that our interest rates are likely to stay in the high 5s for the best borrowing scenarios and low 6s for most homebuyers. This will continue to make home affordability a concern for many buyers, keeping them on the sidelines. On top of higher interest rates, local and national economy conditions will most probably remain similar throughout 2026, with lots of unknowns giving buyers reason to pause and decide if now is a good time for a big purchase or not; this again will contribute to keeping many buyers on the sidelines, just like it did in 2025. Finally, inventory levels are remaining high in Denver, with more homes for sale in January than we’ve seen for many years, and if history proves anything to us, it’s that we’ll see more sellers coming on the market in the upcoming months which will only increase those inventory levels. It’s my prediction that Denver will see more homes coming on the market than new buyers entering the market throughout 2026. If this prediction is correct, then inventory levels will only rise rather than fall.

Although 2025 was a harder year for Denver area home sellers, it’s not all bad news. As we mentioned in our 2025 year recap, values still remained level throughout the year, even in a down market that favored buyers. This shows that Denver’s market is still strong, and although conditions could support more lost value, they are remaining level. This helps protect Denver homeowners’ investment in their homes while giving new homebuyers an opportunity to get into the market. This will help in the long run with home affordability by giving more time for Denver homebuyer household income to rise to help support higher home values and interest rates.

Without a crystal ball, there is no way to know what 2026 will bring for Denver’s complex real estate market. However, you don’t need a crystal ball to know who the right agent is to work with if you’re looking to sell or buy a Denver area home in 2026. At TK Homes, we are closely watching and interpreting the Denver market to ensure that our sellers and buyers are making the best real estate decisions they can with today’s facts. If you’re thinking about making a move in 2026, contact a TK Homes agent today and let’s create a strategy that works best for you! We wish everyone a healthy and successful 2026!

~ Written by TK Homes CEO/REALTOR®, Trevor Kohlhepp