Take a look at the chart above from the Colorado Association of Realtors. From the chart it looks like Denver real estate prices are staying constant or slightly rising. Now, look at the chart below from Zillow for single family for the same time period. The chart shows the polar opposite of above. What data is correct? Is Denver holding up better or worse than the chart above? Does either of the charts even matter? Should we be watching sale prices or something else to predict where the market is heading (look at the third chart below).
The reason I wrote this blog is that I was looking at the May data for Denver county from the Colorado Association of realtors and it didn’t feel correct based on what I am seeing and hearing in the market. I then went to look at the Zillow data for the same time period and filtered for single family homes like the data above and the chart was the polar opposite of what the Colorado realtor’s association recently published. Below I will get into the two data sources and discuss which is correct and what metric we should actually be watching.
Colorado Association of Realtor’s Data
From the Colorado Association of Realtors: “Market information is pulled by month. The Colorado Association of REALTORS® (CAR) Monthly Market Statistical Reports are based on data provided by Multiple Listing Services (MLS) in Colorado. These reports represent all MLS-listed residential real estate transactions in the state. The metrics do not include “For Sale by Owner” transactions or all new construction.” In essence, the MLS data should be generally in line with the Zillow data, but in this case they are radically different.
Zillow’s data radically different
Zillow data most likely encompasses a larger data set including for sale by owner and other non MLS properties. The number of transactions not in the MLS should be small as in Denver the overwhelming majority of sales take place with realtors and therefore the MLS.
Based on the chart above, Denver has already fallen from the peak:
| total appreciation to peak | 33% |
| % change from Peak | 9% |
Long and short the data that Zillow is showing should not be radically different than the Colorado Association of Realtors.
Which one is correct?
On this debate, I’m going to side with Zillow as they have a more complete data set. To be honest, the data from the two sources should be generally the same and not radically different as we are seeing with the two charts.
Does it really matter; is there a better metric?
Regardless of which chart you want to believe, at the end of the day sales are backwards looking. The real metric to watch is inventory. Look at the chart above (I pulled from zillow’s raw data). As the chart clearly shows, there has been a surge in inventory in the Denver metro.
As inventory increases that means that prices will fall with everything else being equal. Basic economics show that a shift in the supply curve will lead to a decrease in prices assuming demand stays relatively constant. Look at the chart below it shows price falling from P to P1. The wildcard is we are assuming that demand is not impacted, but that might be a stretch. As the economy softens we could also see demand drop or shift to the left which would lead to a larger price decline. Long and short, regardless of which chart above you prefer doesn’t really matter as the increase in inventory can only lead to one outcome, lower prices.
Summary
It is a bit suspicious to see the Colorado Association of realtor data radically different than Zillow’s data as they should at least show similar trends. But regardless of the charts on median prices, the real chart to watch is inventory. As shown above as inventory in Denver jumps higher, the only answer is a decline in prices. The next question is how much will prices fall which I will provide an in-depth answer in my next blog post, so stay tuned (if you want to receive new blogs in your email when I publish them, shoot an email or contact us via our webform and I’ll add you.
Additional Reading/Resources:
https://car-co.stats.showingtime.com/docs/lmu/x/DenverCounty?src=page
https://www.zillow.com/research/data/
https://coloradohardmoney.com/blog/
https://coloradohardmoney.com/will-colorado-real-estate-prices-fall-2025/
https://coloradohardmoney.com/you-should-not-buy-a-rental-property-in-denver/
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Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner. He is the owner of Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
Glen resides in Colorado, lends in Colorado, owns property in Colorado, and services loans in Colorado which provides a unique real estate prospective of what is actually happening on the ground both in Denver and throughout Colorado. My goal of this real estate blog is to provide an honest assessment of what I see happening in Colorado real estate and how it will impact real estate owners, buyers, realtors, mortgage professionals, etc…
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