Last week, the Denver Post reported two seemingly contradictory items - that active inventory in the Denver metro area had topped 14,000 listings for the first time since 2011 while the median home price actually increased by just under one percent from a year earlier.
This paints a deceiving picture because I hate to break it to you... but home prices are definitely falling.
Median home price numbers also look backwards - at closed sales.
It's always been my preference to look forward, which means focusing on current active inventory counts and pendings from the past 30 days... rather than closed sales, which tell you where the market was 45 - 90 days ago.
Right now, our absorption rate numbers are downright ugly. If three months of inventory represents a balanced market (which is my view), consider the following comparison between July of 2025 and July of 2024:
July 2025 vs July 2024
$0 - $250k: 6.37 months of inventory / 3.76 months of inventory
$250k - $400k: 4.41 months of inventory / 2.55 months of inventory
$400k - $600k: 3.24 months of inventory / 2.09 months of inventory
$600k - $1M: 3.76 months of inventory / 2.35 months of inventory
$1M and Up: 5.02 months of inventory / 4.24 months of inventory
These forward-looking numbers make it quite clear that prices are in the process of coming down.
The reason the median price is up isn't because prices are rising... it's because the bottom of the market has totally washed out and there aren't any transactions happening there.
When you don't have any sales of $300k condos, for example, the median price is going to go up because, comparatively speaking, there is a much larger cluster of homes selling between $400k - $1M.
To illustrate this, right now there are a total of just 647 homes under contract below $400k in the metro area, while there are 2,982 homes under contract between $400k - $1M. That much higher transaction count further up the ladder drags the median price up, but it doesn't reflect what's really happening inside the market.
Zillow's "Home Price Index" (HPI), which puts more weight on repeat sales of existing homes than what types of homes are selling... paints a very different picture. For the Denver market, Zillow's HPI peaked three years ago in July of 2022 at $613,526. It's HPI for July of 2025 is $558,705, which represents a decline of almost 9% from the peak.
That's much more aligned with reality.
Admittedly, I have taken a more bearish view of housing over the past 24 - 36 months than most of my colleagues. But after 30 years in the industry, I have learned that looking forward is a far better indicator of where things are headed than looking back.
The second half of 2025 is going to be rough for a lot of sellers, agents and lenders. Prospective buyers are going to continue to pull back until they see some green shoots in the housing market.
Bookmark this post and look back at it later this fall, and you'll see that the writing was on the wall.
Reality is going to bite until rates come down or prices re-calibrate to bring some degree of affordability back into a totally broken housing ecosystem.
