Denver's 2025 Economic Forecast & Housing Insights

Submitted by Margaux Askeland, NAIOP Programs Chair with Alpine Bank

NAIOP Colorado began the year on a high note with its 2025 Economic Forecast Breakfast, held on January 8th at the Ritz-Carlton, Denver. The event featured  Spencer Levy, Global Client Strategist and Senior Economic Advisor at CBRE, and host of the acclaimed podcast The Weekly Take as the keynote speaker. Recognized as one of the top experts in interpreting economic trends and their implications for real estate, Spencer delivered an engaging and insightful presentation.

In his forecast, titled “Searching for Oz”, Spencer provided a candid outlook for 2025, cautioning against expecting significant rate cuts in the near term and suggesting that we haven’t quite yet licked inflation. He noted CBRE’s baseline projection currently anticipates two modest rate reductions, with short term rates ending the year under 4%. It wasn’t all doom and gloom; CBRE anticipates several encouraging trends in 2025, including a slight uptick in commercial real estate investment activity, stabilization of office market vacancies for the right submarkets, and increased occupancy and rental rates in the multifamily sector, even as new supply remains strong. AI was also noted as trend to watch out for along with the Data Center boom. As always, his commentary was both entertaining and thought-provoking, with humor spread throughout—he joked that he’s usually wrong in his annual predictions.

Spencer’s presentation set the stage for the panel discussion on Denver’s housing future. He highlighted the ripple effects of affordable and multifamily housing across industries and creating Live/Work/Play communities, underscoring its importance to the broader economy and the workforce. This provided a seamless transition into the panel’s exploration of critical housing issues and opportunities.

Following Spencer’s economic update, a panel of local housing experts took the stage for an engaging discussion on the future of Denver’s housing market. The panel featured Cris White, CEO and Executive Director of the Colorado Housing and Finance Authority (CHFA); Peter LiFari, Executive Director of Maiker Housing Partners; and Jim Francescon, Division President at Century Communities. Terrance Hunt, Vice Chairman at CBRE, moderated the discussion.

As Denver continues to grow, the demand for housing has remained an issue. The panelists dug into the challenges facing the local market, including the disappearance of the starter home and the widening gap between affordable housing and luxury residences. Rising construction costs, skyrocketing insurance premiums, permit delays, and the burdensome condo defect law were highlighted as key obstacles.

Jim Francescon shared that these factors have led Century Communities to cease building attached homes in Colorado altogether. He pointed out that permitting costs in Colorado are more than double those in other markets they build in, making attached housing financially unfeasible when combined with the risks associated with the condo defect law.

Cris White discussed the role of the CHFA in funding affordable housing projects, including both multifamily, single-family and new construction. Meanwhile, Peter LiFari criticized current inclusionary housing policies, explaining why they have failed to achieve their intended goals.

Despite the challenges, the panelists highlighted examples of successful public-private partnerships in other markets, which could serve as models for Denver. They stressed the importance of streamlining permitting processes and fostering collaboration between the public and private sectors.

While acknowledging the complexities of Denver’s housing market, the panelists expressed optimism for the year ahead, citing opportunities to address these issues under the leadership of the new administration. By prioritizing innovative solutions and strengthening partnerships, Denver has the potential to create a more equitable and sustainable housing landscape in the years to come.