DENVER (KOAA) — Colorado is leading the nation when it comes to home price reductions, according to data compiled by Colorado REALTOR Cooper Thayer, but the local real estate expert says the trend does not necessarily mean the state has become a buyer's market.
About 32% of Colorado home listings had their prices reduced in August, compared with a national average of about 26%, according to an analysis by Thayer, a Realtor and spokesperson for the Colorado Association of REALTORS. Thayer said the numbers point to a widening gap between what sellers expect their homes to be worth and what buyers are willing or able to pay.
"\Wwe have the biggest discrepancy between seller and buyer expectations ever,” Thayer said.
Thayer said sellers are still adjusting to a market that looks very different from the rapid price growth seen during the pandemic.
“We've seen a cooldown in the market from 2021 through 2025, and a lot of sellers, especially those who purchased at the top of the market in 2021 or 2022, maybe struggling to realize that they're not going to sell their home for more than they purchased it for,” he added.
At the same time, higher mortgage rates continue to limit what many buyers can afford. The average 30-year mortgage rate recently moved above 7%, adding to the monthly cost of buying a home. Thayer said buyers who can afford to enter the market are gaining negotiating power.
“The typical home is closing for anywhere from 2 to 5% below the seller's original asking price,” he stated.
Thayer also said seller concessions are becoming increasingly common, with buyers negotiating for help with closing costs and mortgage rates.
“Many buyers are using their newfound negotiating leverage to ask for rate buydowns, ask for their closing costs to be covered,” he said.
Those concessions can be significant, particularly as buyers face both high home prices and elevated borrowing costs. But Thayer said buyers should not interpret the increase in price cuts as proof that Colorado has suddenly become an affordable housing market. The changing market also creates risks for sellers who initially price their homes too high. Thayer calls the consequences the “triple whammy.”
1. Longer market times can then lead to additional expenses, including mortgage payments, property taxes, insurance and homeowners association fees.
2. Carrying costs.
3. Skewed perception when a home sits on the market for a long time.
“Buyers after the first few weeks are going to start asking the question, why hasn't this home sold yet?” Thayer said about reason number three. “And even if there's nothing wrong with that house, buyers will ask, what is wrong with it?”
Thayer's broader analysis of the Denver-area market found that homes that sell quickly tend to perform substantially better than properties that sit on the market and require price reductions. In the first half of 2026, homes selling within seven days received a median of 100% of their original list price, while properties that remained on the market 61 to 90 days received a median of 94.82%.
The analysis also found a significant difference among types of properties. Single-family homes in the Denver metro area sold faster and closer to their original asking prices than townhouses and condominiums during the first half of the year.
Thayer said that distinction is important when looking at Colorado's housing market as a whole.
“We're still in the tale of two markets here,” he said. “The condo, townhouse market is completely different than the single-family market.”
Ultimately, Thayer said the market may remain in this adjustment period for some time.
“Nobody's expecting interest rates to shoot down anytime in the near future. Nobody's expecting a wave of new construction to be built in Colorado,” he said.
The question, he said, is how long it takes sellers to adjust their expectations.
“The real question is, how long is it gonna take a majority of sellers to understand and accept the fact that this is really our new baseline, at least for the next one, two, maybe three years,” Thayer said.
For sellers, his advice is to price a home based on current market conditions rather than past expectations.
“Price it to sell, not just price it to list,” Thayer said.
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