There is something happening in the Denver condo and townhome market that I think deserves more attention.
We don’t necessarily have an entry-level housing shortage right now. In many areas, we have an entry-level buyer shortage.
According to the National Association of REALTORS®, the median age of a first-time home buyer has now reached 40 years old, an all-time high. Even more significant, first-time buyers represented only 21% of all home buyers, the lowest share NAR has recorded.
Think about what that means for our condo market.
For decades, entry-level condos and townhomes were a natural first step into homeownership for buyers in their 20s and early 30s. Today, many of those buyers simply cannot make the numbers work.
And we are seeing the consequences in our local market data.
In August, Greater Metro Denver’s condo + townhome market had approximately 6.57 months of inventory overall. But homes priced below $200,000 had approximately 9.45 months of inventory. Those lowest-priced homes were taking an average of 93 days to go under contract, versus roughly 61 days for the market overall.
That is an important distinction.
The least expensive homes in the market are not necessarily selling the fastest.
Normally, we would expect affordability to create demand at the bottom of the market. Instead, some of the greatest inventory pressure is occurring in the very properties that historically would have been purchased by first-time buyers.
We see this especially in entry-level condo communities located along major transportation corridors including I-70, I-25, C-470 and E-470, I-225, 6th Avenue and Highway 285/Hampden.
Why?
Because today’s $250,000 or $300,000 condo is not simply a $250,000 or $300,000 purchase.
The buyer has to qualify for the mortgage payment, property taxes, homeowners insurance and monthly HOA dues. In some communities, rising HOA expenses can materially change what a buyer qualifies for.
Interestingly, the affordability calculations in our market report are based on principal and interest only. The report’s purchasing-power analysis demonstrates how dramatically the loan amount supported by the same monthly payment falls as interest rates rise. HOA dues, taxes and insurance create additional monthly obligations beyond that principal-and-interest calculation.
That helps explain why the 20- to 30-year-old buyer who would traditionally absorb this inventory is having such a difficult time entering the market.
Then something else happens.
By the time many first-time buyers reach 40, their housing priorities may be completely different.
They may be partnered. They may have children or be thinking about children. They may need another bedroom, a yard, a home office, different schools or simply more space. Rather than purchasing a small condo as a stepping stone, some are remaining renters longer and trying to save enough to make their first purchase a single-family home.
In other words, we may be losing an entire rung of the traditional housing ladder.
Historically, the progression often looked something like this:
Rent → Entry-Level Condo/Townhome → Larger Townhome or Starter House → Move-Up Home
Today, more buyers are attempting to go from:
Rent → Wait → Wait Longer → Single-Family Home
And financially, waiting can make sense in the short term.
Zillow’s August 2026 data estimates typical Denver rent at approximately $1,922 per month, compared with approximately $2,484 per month for the typical new buyer’s mortgage, taxes and insurance. That is a difference of roughly $500 per month before considering condo HOA dues. It helps explain why renting continues to be attractive to households trying to save and improve their purchasing power.
Meanwhile, sellers of entry-level condos are competing for a smaller buyer pool.
The August numbers show just how much leverage buyers have gained. Approximately 67% of sales below $200,000 closed below asking price, and sellers in that price range ultimately netted only about 87% of their original asking price after concessions.
So what does this mean for Realtors?
For condo sellers, pricing based on what a neighbor received two or three years ago can be dangerous. The competition is not simply the condo down the street. The competition is every other property competing for a shrinking pool of payment-sensitive buyers.
For buyers, especially first-time buyers who can qualify, this may represent one of the better negotiating environments we have seen in years. Inventory is available, sellers are negotiating, price reductions are common and concessions remain prevalent. The opportunity may not necessarily be finding the lowest price; it may be structuring the transaction to reduce the buyer’s monthly cost.
And for all of us advising clients, the bigger story is worth watching:
What happens to the entry-level condo market when the first-time buyer doesn’t arrive until age 40?
The inventory we are seeing today may be one of the clearest answers yet.
