Denver Housing Market 2026: Forecast and Investment Opportunities
Denver has always been a magnetic place, drawing from its location and energy as well as the sense that ambition and quality of life can indeed go side by side. The result of this mixture in the Denver housing market has been rapid and steady appreciation, and anyone who tried to purchase a home between 2020 and 2022 might remember what this particular frenzy was like
Denver in 2026 is at a different point in its cycle, not a collapse, not a boom, but a recalibration. Higher interest rates and increased inventory have now caused prices to dip and stabilize, and in 2026, buyers should expect deals to continue to pop up. This guide breaks down where Denver stands today, what’s driving the change, and how investors can take advantage now or in the near future.
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Why did Denver’s real estate boom happen?
Denver’s rapid price growth over the past few years has been driven by a confluence of factors. First, the remote work revolution that was driven primarily by the COVID-19 pandemic saw scores of people flock to Colorado for its unmatched lifestyle and quality of life. That, coupled with a boom in the Denver tech industry, resulted in thousands of people moving to a city with a limited supply of real estate, and thus, prices went crazy. Denver was also a relative bargain compared to coastal metropolises like LA and NYC, where many of these new residents were flocking from.
Denver’s housing market snapshot 2022–2025
The best way to understand Denver’s 2026 housing market is to zoom out and compare it with the past few years. Between 2022 and 2025, Denver moved through one of its most dramatic transition periods: from the tail end of the pandemic-era surge, through a rate-driven slowdown, and into today’s more balanced environment. Looking at the data side by side, prices, home values, days on market, and rent trends offer a clear picture of how the market has cooled, stabilized, and slowly begun to re-establish its footing.
Here’s a high-level snapshot of Denver’s recent trajectory:
What the data shows is a market that has shifted gears. After the rapid appreciation of 2020–2022, prices cooled in 2023 and 2024 and have begun stabilizing in 2025. Lots of new build properties have come to market in Denver, meaning that the supply pressure is no longer there. Demand is still high, but many properties remain off the market because of high interest rates, preventing buyers from “moving up” in housing.
For many seasoned investors in the Denver market, this is a window of opportunity. Denver’s “market corrections” are historically shallow and temporary. The cycle in Denver typically works as follows: the market flattens, adjusts, and then returns to steady appreciation driven by population growth and high wages relative to the rest of the country. The 2022–2025 data reflects exactly that: a cooling phase followed by stabilization, creating ideal conditions for strategic long-term investment.
What is shaping Denver real estate right now?
So what exactly is shaping Denver real estate right now and into the future? Below is a breakdown:
1. Higher interest rates are slowing buyer urgency in Denver
At 6.5% to 7% mortgage rates, a $650,000 home no longer feels easy at all to carry. Buyers who could qualify for $900,000 in 2021 can now only afford closer to $600,000. That alone reshapes the bidding landscape. The psychological shift is real: instead of stretching for every inch of square footage, buyers now evaluate value more critically.
2. A job market that remains remarkably stable.
Despite tech layoffs in 2023–2024, Denver’s job base remains strong and diverse with big opportunities in things like aerospace, renewable energy, healthcare, financial services, and a healthy remote-work contingent.
3. Slower in-migration, but not a reversal.
Colorado continues to attract new residents, but not at the breakneck pace of the late 2010s. The people who move here now are more intentional: families seeking stability, professionals relocating within the same salary brackets, and hybrid workers who want a better quality of life.
4. Rising inventory loosens the market.
More listings plus longer time on market means investors can evaluate deals without panic. Sellers, meanwhile, are adjusting expectations and offering concessions, which creates room for negotiation for the buyers.
5. Rental market cooling, but staying fundamentally healthy.
While downtown rents have softened slightly, suburban rents remain strong. Downtown ended up overbuilding way too many luxury multifamily developments, and the vacancy in those buildings has affected the vacancy rate of the city at large. Vacancy rates are drifting in the mid-6% range, not great, but hardly destabilizing. Landlords who position their properties intelligently are still performing well.
Denver property taxes & cost of ownership
Colorado’s reputation for low property taxes remains true. Investors who come from New Jersey, California, or Illinois often feel an immediate sense of relief when they see the numbers. Denver’s effective property tax rate floats around 0.5% of market value, not the lowest in America, but very competitive. Let’s look at how this plays out with a typical investor profile:
Example: Annual ownership cost of a $700,000 home
| Expense | Annual Cost |
|---|---|
| Property taxes (0.5%) | $3,500 |
| Insurance | $1,700–$2,200 |
| Maintenance & reserves (1%) | $7,000 |
| HOA (if condo) | $3,000–$4,800 |
| Total non-mortgage costs | $15,000–$17,000 |
Denver short-term rentals (STRs): Regulated but workable
Denver’s approach to short-term rentals has been that of a “residents first” mentality. This means they don’t allow every property in the city to turn into an Airbnb. In the city of Denver, STRs must operate from a primary residence, but in “metro Denver,” which encompasses the surrounding suburbs, the rules aren’t as strict.
That being said, even renting out a primary residence can be hugely advantageous. Even with an effective tax rate near 18%, many primary-residence operators still reduce their carrying costs by 30% to 50%, proving that STR can be a strong and sustainable strategy in Denver.
Denver isn’t the right fit for investors seeking multiple unoccupied STR units, but it is an excellent market for:
- Homeowners with a basement suite
- Properties with a private ADU
- House hackers who want a reliable supplemental income
- Hybrid hosts blending STR on weekends with mid-term stays during the week
Case Study: A Primary-Residence STR in West Highland
A homeowner in West Highland purchases a $720,000 bungalow with a renovated basement suite and private entrance. Operating the suite as a primary-residence STR, the owner books an average of 130 nights per year at $165 per night. Even after Denver’s higher STR tax rate and light operating expenses, the setup produces nearly $12,000 in annual net income, effectively covering close to $1,000 of the monthly mortgage while staying fully compliant with city regulations.
| Metric | Value |
|---|---|
| Purchase price | $720,000 |
| STR type | Primary residence (basement suite) |
| Average nightly rate | $165 / night |
| Annual nights booked | ~130 nights |
| Gross annual income | $21,450 |
| Cleaning & turnovers | ~$3,000 / year |
| STR taxes (~18%) | ~$3,861 / year |
| Supplies & utilities | ~$1,700 / year |
| Maintenance reserve | ~$1,000 / year |
| Total annual expenses | ~$9,500 |
| Net annual income | ~$11,950 |
| Mortgage offset equivalent | ~$995 / month |
Mid-term Rentals: the emerging sweet spot
While STRs are constrained, mid-term rentals (30–89 days) have blossomed into one of Denver’s strongest opportunities. The city’s professional base, healthcare workers, digital nomads, relocating tech employees, and contract engineers are creating demand for furnished stays longer than a month but shorter than a standard annual lease.
Mid-term rentals avoid the STR licensing rules and give investors a powerful middle ground: yields stronger than unfurnished long-term rentals, with far fewer regulatory hoops.
Case study: A downtown 1-bed MTR condo
Imagine purchasing a $500,000 1-bed condo in Downtown Denver. An unfurnished long-term tenant would likely pay around $1,750 to $1,900 per month. Mid-term renters, however, especially travel nurses and corporate clients, often pay $2,500 to $3,000 for the same unit when it’s furnished and well-located.
| Expense / Return | Value |
|---|---|
| Annual expenses (taxes, HOA, maintenance, insurance, management) | ~$14,700 |
| Net operating income (NOI) | ~$16,000 |
| Down payment (25%) | $125,000 |
| NOI return on equity | ≈ 12.8% |
Case study: A 2-bed mid-term rental in the Denver Tech Center
Consider a different kind of investment: a $625,000 2-bed, 2-bath condo in the Denver Tech Center (DTC). This area isn’t walkable like Downtown Denver, but it sits next to one of the metro’s biggest employment hubs, which keeps demand steady from consultants, relocating tech workers, and medical professionals.
| Expense / Return | Value |
|---|---|
| Annual expenses (taxes, HOA, maintenance, insurance, management) | ~$18,900 |
| Net operating income (NOI) | ~$18,500 |
| Down payment (25%) | $156,250 |
| NOI return on equity | ≈ 11% |
Where are investors buying in Denver?
Denver’s neighborhoods behave differently depending on who lives there, what amenities surround them, and how much new construction competes with existing stock. Some areas are built for long-term families, others for young professionals, and others still for redevelopment or creative entrepreneurs.
| Neighborhood | Key Characteristics | Common Investor Strategy |
|---|---|---|
| RiNo & Five Points | Rapid change; industrial conversions; breweries; galleries; large new apartments. | Mid-term rentals; small multifamily long-term holds. |
| Washington Park & Platt Park | Strong appeal for end-user families; tight resale environment. | Long-term tenants; basement mid-term rentals. |
| Capitol Hill | High density; strong renter population; mix of older multifamily buildings. | Cash-flow-focused LTR or MTR due to lower entry prices and consistent demand. |
| Highlands & Sloan’s Lake | Lifestyle-driven; walkability; micro-retail; steady appreciation. | MTR or LTR paired with value-add renovations to lift rents. |
| Lakewood, Arvada, Aurora, Englewood | Better rent-to-price ratio; fast rental absorption; lower maintenance costs. | Yield-focused LTR or MTR for investors prioritizing cash flow over walkability. |
Where Denver is heading next
So where is Denver heading next? If we had a crystal ball, we would give you the exact answer to that question, but because we don’t, we’ll need to rely on the data and economic fundamentals. Firstly, because of the previous boom and the “great migration” of both people and companies, Denver is officially on the map. Colorado has always been a travel destination because of the mountains, but Denver itself hasn’t been deemed a world-class city until recently. This will not change. Secondly, Denver is attracting more and more businesses, so its emergence as a place with high-paying jobs will also continue to pay dividends.
What will be changing are interest rates, and if those rates drop substantially, you could see much more fluidity in the market, with buyers and sellers now having access to cheap capital. Will this result in yet another boom? No one knows, but right now, there are deals to be had, and plenty of demand for solid rentals in Denver and the Denver metro area.
FAQ
Is Denver still a good market for first-time real estate investors?
Yes, as long as expectations align with today’s pricing and rental dynamics. Denver isn’t a low-cost entry market, but newer investors can still find strong opportunities in areas like Arvada, Lakewood, Aurora, and Englewood. Mid-term rentals and house-hacking strategies help offset higher payments and improve returns without taking on excessive risk.
How should investors approach negotiations in Denver at the start of 2026?
As of early 2026, Denver remains a negotiation-friendly market compared to the peak years of 2021–2022. Inventory is still elevated by historical standards, and many sellers are realistic about pricing and terms. Investors who come prepared, with financing lined up and a clear understanding of local comps, can often negotiate closing cost credits, inspection-related price adjustments, or flexible timelines. While it’s no longer a distressed market, the balance of power is far more even than it was during the frenzy, rewarding disciplined, well-structured offers.