I hope your first week of 2026 has started off well—and that you’ve managed to dodge the flu so far!

Even just a few days into the new year, we’re already seeing signs of real estate momentum. Buyers who sat on the sidelines last year are re-engaging, and thoughtful sellers are choosing to list early, taking advantage of lower inventory combined with excited buyers before the spring market ramps up.

Over the past several weeks, I’ve attended a number of events featuring national and local experts discussing the broader economy, the national housing outlook, and what’s unfolding specifically across Denver Metro and Boulder County. This newsletter is longer than usual, but intentionally so. My goal is to give you clear context—not headlines—so you can make informed decisions about real estate in the year ahead.

If you find what I’ve shared below helpful, feel free to forward it along to someone else who might benefit. And as always, I’m happy to talk through how any of this applies to your specific situation.

The Bigger Economic Picture

The U.S. economy continues to perform better than many expected—but not evenly. Despite higher interest rates, geopolitical tension, tariffs, rising insurance costs, and constant recession headlines, overall economic growth has remained resilient. Consumer spending—the largest driver of the economy—has stayed strong, and employment remains historically healthy. What’s changed is who is doing the spending.

A disproportionate share of consumer activity is coming from higher-income households. The top 10% of earners now account for roughly half of all consumer spending, supported by stock market gains, home equity, and accumulated wealth. For these households, higher rates and rising costs—including tariff-related price increases and higher insurance premiums—have been manageable. For many others, they have not.

Middle- and lower-income households are feeling more pressure. Income growth has slowed, savings rates have declined, and costs tied to insurance—home, auto, and health—have risen sharply in many parts of the country. These increases don’t always show up in inflation headlines, but they meaningfully affect monthly budgets and discretionary spending. Combined with tariffs quietly raising the cost of goods and materials, this helps explain why consumer confidence remains near multi-decade lows even as spending continues.

The labor market reflects this same transition. Unemployment remains low, but hiring has slowed as companies grow more cautious. Rather than widespread layoffs, we’re seeing fewer new jobs added. This gradual cooling is why the Federal Reserve has begun easing short-term rates and is expected to proceed carefully through 2026.

Inflation overall is moving in the right direction, but unevenly. Housing and energy costs have moderated, helping offset pressures from tariffs, insurance inflation, and supply chains. Importantly for mortgage rates, long-term inflation expectations remain stable, which has helped prevent borrowing costs from rising sharply.

The takeaway is not that the economy is weak—it’s that it’s uneven. Wealth, income, and rising fixed costs like insurance are shaping how households experience this moment, and those differences are flowing directly into housing decisions, spending patterns, and risk tolerance. This is an economy in transition.

National Real Estate Market Outlook

Nationally, the housing market has endured one of the slowest three-year stretches in decades—not because prices collapsed, but because activity did. Home sales in 2023–2025 ran well below pre-pandemic norms as affordability tightened and homeowners stayed put, locked into historically low mortgage rates.

What’s notable is what didn’t happen. This slowdown wasn’t driven by job losses or widespread financial distress. Homeowners remain in strong equity positions, defaults are low, and most households are financially stable—even if they’re less inclined to move.

Heading into 2026, the shift is momentum. Inventory is slowly rebuilding as life events—new families, downsizing, divorce, relocations—begin to override low-rate inertia. Buyer demand never disappeared; it was delayed. Mortgage application data suggests more buyers are preparing to act, even if they’re moving carefully.

Rates are unlikely to return to the 3–4% range anytime soon, but even modest improvements make a big difference in a buyer’s decision to purchase a home. Historically, housing rebounds after prolonged slowdowns tend to be steady rather than sudden. Economists project higher national home sales in 2026, but that growth would still represent a return toward normal—not a frenzy.

The housing market isn’t fragile. It’s recalibrating.

Denver Metro & Boulder County Real Estate Market Outlook

Locally, the story depends heavily on where you are—and whether you’re buying or selling.

In Boulder County, the market has clearly slowed from its pandemic pace. Inventory is higher, homes are taking longer to sell, and price reductions are more common, particularly for condos and higher-priced properties. Sales activity is holding relatively steady, but affordability is now the dominant constraint—and that constraint is structural.

Home prices in Boulder County, and notably within the City of Boulder, have far outpaced local income growth, shrinking the pool of buyers who can comfortably qualify for today’s prices and monthly payments. As a result, buyers are more selective, decision-making is slower, and sellers who expect 2021-style urgency are finding the market far less forgiving, with many homes exiting the market in 2025 without finding a buyer. Homes that are priced appropriately and reflect current conditions, however, are still attracting interest and moving.

For buyers in Boulder County, this environment brings leverage—more choice, more time, and more opportunity to negotiate concessions, pricing, and terms. For homeowners considering selling, preparation and pricing discipline matter more than ever. Buyers are highly sensitive to value, condition, and monthly costs, and homes that miss the mark are sitting longer and often chasing the market down.

In the Denver Metro area as a whole, the market is more balanced but still tilting toward buyers. Inventory increased through 2025, price growth flattened, and days on market have lengthened. While affordability is still a factor, income-to-price ratios are more workable than in Boulder County, which has helped demand remain broader. Detached single-family homes are performing more consistently than attached properties, where HOA costs and affordability pressures are more pronounced. Buyers have more flexibility, while sellers are seeing the best results when they price competitively from the start and remain open to concessions.

Across both markets, the theme heading into 2026 is stability—not a surge, and not a crash. Buyers are active but patient. Sellers are motivated, but outcomes depend more on alignment with today’s financial realities than on timing alone.

  
If you’d like to talk through what all this means for you—whether buying, selling, or simply planning ahead—you’re always welcome to reply to this email, call me directly (720-706-1500), or book time on my calendar. For more frequent market insights, I also share daily updates on LinkedIn.

Wishing you a healthy, grounded, and successful 2026!