If you’ve tried to sell your rental property in the last year, you’re not alone—and if you’ve quietly taken that “for sale” sign down and relisted your home for rent, you’re really not alone.
At Keyrenter Denver, we’ve noticed a growing pattern among local landlords: rental property owners who initially listed their homes for sale are now coming back, seeking to re-rent them after lackluster buyer activity. It’s a noticeable shift—and one with clear market roots. So, what’s behind this trend?
A Sales Market That’s Cooling Off
Denver’s housing market has shifted gears. While home values remain high, the pace of growth has slowed considerably. In April 2025, the median sale price in Denver city was $628,000—a modest 0.2% increase year-over-year, and only slightly above the April 2022 peak of $616,500. However, this small gain follows two years of volatility and stagnation, making the overall trajectory feel more like a plateau than continued growth. Sales volume has also declined: just 907 homes sold in April 2025, down roughly 5% from the same time last year.
At the same time, inventory is way up. There were 11,964 active listings in April 2025, a 72% increase over last year and the highest level in over a decade. This surge in available homes has led to longer listing times—median days on market rose to 13, compared to just 8 the year before. Buyers are choosier, negotiating price reductions and seller concessions. Gone are the days of 10 offers in 24 hours. Now, only the best-prepped and most competitively priced homes move quickly.
For rental owners who listed their properties hoping for a quick and profitable sale, the reality has been sobering. Many aren’t seeing the activity they expected. With more listings flooding the market, even well-maintained properties are taking longer to sell—or failing to attract any serious offers at all.
Rents Are Softer, But Still Holding Strong
On the rental side, the picture is more complex. After years of dramatic rent increases, rent growth has stalled. In Q1 2025, the average Denver-area apartment rent was $1,819, down 3% from the year before, and some newer buildings have seen even steeper drops. Metro-wide vacancy rates hit 7.0%, the highest since 2009.
Much of this cooling is due to supply: the city added 20,000 new apartment units in 2024, and over 6,000 more in Q1 2025 alone. That influx has shifted the balance of power toward tenants, especially in luxury buildings. Many are offering concessions like free rent or waived fees.
But here’s the key: single-family rental homes are holding up better. While rent growth has flattened, demand for detached rentals remains strong—particularly among families and would-be buyers priced out of the ownership market due to high interest rates. Renters may be gaining leverage in high-density buildings, but single-family homes with yards, garages, and room to breathe are still very much in demand.
The Mortgage Rate Trap
One of the biggest hurdles for today’s property owners is the interest rate environment. Back in 2020–2021, many landlords refinanced into historically low mortgage rates, often in the 2.75% to 3.5% range. Today, 30-year fixed mortgage rates are hovering around 6.5% to 7%.
That makes both selling and buying a challenge. Sellers are realizing they may need to part with their low-rate mortgage to buy another home (or pay rent themselves). And buyers can’t afford to offer as much, because the monthly payment is significantly higher at today’s rates. For many landlords, holding and renting is more appealing than taking a financial hit from selling.
New Legislation and Regulatory Friction
Colorado has introduced several new laws aimed at protecting tenants, which have indirectly made the landlord experience more complicated. In Denver, all long-term rental properties now require a license, and compliance includes inspections, registration, and fees. Statewide, the “just cause” eviction law (HB23-1098) means landlords can only end a tenancy for specific legal reasons, like owner move-in or sale.
If a landlord gives notice to a tenant to sell the property but then the sale falls through, they may be legally prevented from re-renting the unit for 90 days, creating a significant income gap. These types of regulatory hurdles make the transition from landlord to seller more complicated—and in some cases, unworkable. Many are now opting to keep renting rather than navigate the red tape.
The Math Doesn’t Always Add Up
Even with Denver’s relatively high home values, selling doesn’t always pencil out. Property taxes have risen sharply following 2023 reassessments, with some owners facing increases of 20% or more. At the same time, insurance premiums and maintenance expenses continue to climb. While these rising costs affect both renting and selling, the softened sales market means many owners aren’t seeing the returns they expected when listing their property. When all factors are considered—including current rental income potential—many landlords are finding that continuing to rent, despite the added costs, still makes more financial sense than selling at today’s prices.
Add in the potential for future market recovery, and the decision becomes even clearer. Many landlords are choosing to wait out the current environment, continuing to rent until prices, buyer demand, or interest rates shift more favorably.
A Market in Transition
This reversal—from selling back to renting—isn’t just a personal decision. It’s part of a larger story about Denver’s real estate market in 2025. Sellers are facing headwinds, renters have more choices, and economic pressures are forcing flexibility.
If you’re considering selling your rental property, it’s worth taking a step back to understand these trends. At Keyrenter Denver, we help property owners make informed decisions backed by market data, not guesswork. Whether you decide to sell, rent, or hold, having the full picture is key to navigating this shifting landscape.
Need help evaluating your property’s performance or market potential? We’re here to support you with custom rental analysis, market insights, and management strategies designed for today’s evolving Denver real estate climate.
Sources
- Denver Housing Market Trends – April 2025
REcolorado. “April 2025 Housing Market Trends.” - Median Home Prices and Inventory Data
Rocket Homes. “Denver, Colorado Housing Market Report April 2025.” - Denver Apartment Vacancy Rates and Rent Trends
Denverite. “Denver apartment vacancy hits 15-year high — and rents are dropping.” - CBRE Denver Multifamily Market Report – Q1 2025
CBRE. “Denver Multifamily Figures Q1 2025.” - Zillow Observed Rent Index (ZORI) – April 2025
Zillow. “Denver, CO Housing Market: 2025 Home Prices & Trends.” - Colorado House Bill 24-1098 – Just Cause Eviction Law
Colorado General Assembly. “Cause Required for Eviction of Residential Tenant.” - Denver Residential Rental Property Licensing Requirements
City and County of Denver. “Residential rental property.” - News on Denver’s Rental Licensing Enforcement
Axios. “Denver starts fining landlords operating without rental license.” - Insights on Denver’s Rental Market Dynamics
The Colorado Sun. “Why rents in Denver will continue to fall this year.” - Denver Real Estate Market Update – April 2025
360dwellings. “April 2025: Denver Real Estate Market Update.”