The housing market is shifting, and one key data point suggests that inventory will rise in 2025. This change will impact buyers, sellers, and the overall market dynamics.
1. Inventory Levels Are Increasing
Housing inventory is already trending upward in many markets.
This graph clearly illustrates the increase in active listings over the past few years. After hitting a low in early 2021, inventory has steadily rebounded, with a significant 25% year-over-year increase as of January 2025.
This trend suggests that more homeowners are listing their properties, whether due to shifting economic conditions, higher interest rates, or evolving buyer demand.
More homes are staying on the market longer, and the number of active listings is climbing. This shift signals a move away from the ultra-competitive, low-inventory environment of recent years. Sellers must now adjust their strategies to stand out.
Rising inventory means buyers have more options, reducing bidding wars and giving them more negotiating power.
2. Pricing Strategies Must Change
Sellers can no longer overprice homes and expect multiple offers.
The map highlights a dramatic 51.4% increase in active inventory for Denver County from January 2024 to January 2025. This has been one of the largest increases in the past several years, showing a clear shift toward a more buyer-friendly market.
With inventory levels now surpassing pre-pandemic numbers, Denver home sellers will need to adjust their strategies to compete in a more crowded market.
With more competition, accurately pricing a home is critical. Overpriced listings are more likely to sit, leading to price cuts and longer selling times. Staging, marketing, and working with a knowledgeable agent will be key.
A well-priced home in a competitive market sells faster and attracts serious buyers.
3. Buyers Gain More Leverage
More inventory means fewer bidding wars and better opportunities for buyers.
While inventory is increasing, home prices have remained relatively stable, with a slight year-over-year rise of 0.7%. However, prices are still down 8.2% from their 2022 peak.
This suggests that while buyers have more negotiating power, sellers may still be hesitant to lower prices drastically. The market is in a transitional phase where the right pricing strategy is critical.
Buyers now have room to negotiate for seller concessions, rate buydowns, and home inspections—rare things during the peak seller’s market. Those who have been waiting for better conditions may find 2025 to be their year.
Smart buyers will take advantage of this shift before economic factors change again.
The market is moving toward balance. Those who understand and adapt to these changes will be the ones who succeed.
If you’re a buyer, now is the time to start exploring your options while competition is lower. If you’re a seller, getting ahead of the market shift with the right pricing and marketing strategy is crucial.
Want to stay ahead of these market trends? Reach out to discuss how you can navigate this evolving landscape successfully!
