DMAR Real Estate Market Trends Report | JAN. '24
Although interest rates started their descent in November, the numbers for December stayed consistent with Denver’s seasonal rhythm. Month-over-month the median close price dropped 2.8 percent to $551,993, while closed sales dropped 7.65 percent to 2,620. Most notably, the median days in MLS jumped 31.82 percent from 22 to 29 days.
However, the outlook is more positive if numbers are compared to this time a year ago with the same seasonal factors. Year-over-year new listings declined by only nine homes from last year with 1,725 new homes for sale, and pending sales increased 10.87 percent to 2,471 homes. The median close price jumped a little over $1,000 and median days in MLS decreased slightly from 30 days last year to 29 days.
The performance was better for single-family homes year-over-year with new listings increasing 4.33 percent and pending sales rising 12.98 percent. The median close price increased 2.25 percent from $600,000 to $613,500, the close-price-to-list-price ratio increased to 99.55 percent, and median days in MLS declined from 32 to 29 days. Conversely, attached homes were a bit more sluggish year-over-year with new listings down 10.77 percent, closed sales declining by 10.57 percent, median days in MLS increasing to 30 days and the close-price-to-list-price ratio declining to 98.53 percent. However, interest rates helped pending sales with a 5.95 percent increase and the median close price rose 2.46 percent to $418,701.
“Last year, the Denver real estate market was challenging as we dealt with a lack of inventory and interest rates that seemed to go up daily,” commented Libby Levinson-Katz, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “Despite these issues, buyers and sellers found a way to come together in a stabilizing market. As mortgage rates continue to decline, we all want to know what the Denver real estate market has in store this year.”
Levinson-Katz continued, “If rates continue to decline, we can expect to see more buyers enter the marketplace. There has been significant pent-up demand from both buyers and sellers over the last two years who have been interest rate adverse. If demand increases, this will ultimately provide some pressure on home prices. As we’ve noted before, 2023 performed most similarly to a pre-pandemic 2019. While new listings and closed sales were both higher in 2019, a higher median close price of $580,000 last year kept sales volume similar with only a 0.76 percent decline. Similarly, while inventory continued to climb each month, active listings at month-end declined slightly by 1.31 percent while median days in the MLS landed at 12 days versus 13 days in 2019. While I do not think we will see the same upward pressure on prices that we saw a few years ago, prices will continue to rise. If demand spikes, inventory will grow throughout the year as sellers find comfort in making a move with more reasonable financing options. Additionally, I expect the selling season to start earlier this year than last. With pent-up demand, more favorable lending terms and warmer temperatures than last, there is nothing stopping buyers from getting out there.”
DMAR’s monthly report also includes statistics and analyses in its supplemental markets that include properties sold for $1 million or greater, properties sold between $750,000 and $999,999 and properties sold between $500,000 and $749,999.
In 2023 overall, the market of homes $1,000,000 and higher functioned slightly differently than the market as a whole. Buyers in this segment were less impacted by interest rates with higher down payments and cash purchases. However, the market did see a boost in activity at this price point in December. A decrease in interest rates, strong end-of-year investment returns, and a dovish narrative from the Federal Reserve helped to ease uncertainty.
The number of closed properties was down slightly from November but up 14.47 percent from December 2022. The total sales volume was also up 14.18 percent from last December. The number of properties that went pending during December was down 9.20 percent from November, showing the typical seasonality in the market, but was up 32.40 percent from December 2022, which indicated more robust buyer demand and sentiment than the market saw last year.
At the end of 2023, this market segment saw a total decrease in closed sales of 18.93 percent for detached homes and 21.52 percent for attached homes, a similar trend to the one seen in the other market price points. The new inventory that entered this market for the year was 6,402 properties, down 4.53 percent from 2022. However, the general trend of this segment was increasing. 2023 was up 64.49 percent from the amount of inventory in 2019, before the pandemic. The growth in this segment reflects the increase in home prices across the metro area over the past four years.
“Entering 2024 feels like the tumultuous years of adjusting to the pandemic-induced market, and then the recalibration is settling down,” said Amanda Snitker, DMAR Market Trends Committee member and Metro Denver Realtor®. “Projections for 2024 bring us less volatile interest rates and, hopefully, lasting declines that appeal to buyers and sellers, keeping the supply and demand at a healthy balance.”
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