Real Estate Forecast 2026

If 2024 was defined by resistance, 2025 was the year of adjustment. Across Northern Colorado, buyers and sellers stopped waiting for the market to return to the past and instead adapted to a new set of norms. Our region proved its resilience once again, with home sales increasing by 5.28% to 8,389. The median price for the region ended 2025 at $521,500, holding stable with 0.95% annual growth. Behind these numbers lies a shift in strategy. Sellers faced increased competition and embraced dynamic pricing, often using concessions (a tool long mastered by builders) to attract interest. Meanwhile, buyers adapted to higher rates by becoming more surgical in their search, prioritizing turnkey properties and leveraging savvy sellers’ concessions (such as rate buydowns) to solve the affordability puzzle.

 

The 2025 housing market experienced a Rate Reality Check. While we did not see a dramatic pivot, rates settled into a new normal by averaging roughly 6.6% for much of the year before dipping into the low 6% range in the fourth quarter. Buyers and sellers began to accept the current environment and stopped putting off life events (like marriage, retirement, and growing families) for the sake of interest rates.

 

Record home prices and inventory constraints continued to challenge home affordability in 2025. However, mortgage rates were not the only culprits. Increasing property taxes and, specifically, rising insurance premiums, created significant new hurdles across all property types. Several carriers pulled back on issuing policies, making coverage more expensive and harder to obtain in Colorado. The good news? We began to see improvements in the fourth quarter of 2025, driven by fewer major weather events, setting the stage for a more stable insurance landscape in 2026. The Condo and Townhome sector faced specific headwinds, with a 3% decline in sales to 1,582 units and a 1.16% decrease in median price to $393,176. This market has long been hampered by a lack of inventory due to decades of challenges with construction defect laws. While high HOA fees and insurance costs hurt this segment in 2025, builders are increasingly focused on density, which will help improve stability and inventory in this space moving forward.

 

The regional market has officially shifted toward a neutral or buyer favored landscape, marking the end of the more than decade long seller’s market. Buyers are increasingly in the driver’s seat as sellers face intensified competition from both rising resale inventory and aggressive new construction incentives. Buyers now have more leverage to negotiate on price and terms than they have had in years. We also witnessed a shift in traditional demand indicators. While local employment growth historically drives housing demand, the prevalence of remote work has introduced new variables. Many residents now hold jobs centered elsewhere, meaning the region’s economic strength is often greater than what local employment data suggests. Simultaneously, we are seeing the Grandbaby Effect take hold, as retired Boomers find opportunities in our region to be closer to their children’s families. These diverging buyer pools of remote workers and relocating retirees helped keep the housing market stable during a year of transition.

 

Real estate is local, and we continued to see different market dynamics at play. Nowhere was this more evident than in Johnstown. We observed that regions with slated new construction growth priced competitively below the region’s median saw a strong surge in sales demand. Johnstown’s strong new construction presence led to a region-leading increase in the number of sales, ending the year at 715 for a massive 29.76% increase. Builders in these areas proved this by offering more affordable products in growth zones and structuring attractive financing options, thereby driving significant growth. Rather than just building homes, they built solutions to the affordability challenges that held other markets back.