The Denver residential market is slowing down for December 2024. The 10-year average for new listings in December is 2,540. For December 2024, the number of new listings was below the 10-year average at 2,100. The inventory is continuing to increase, we are at 3 months of inventory. The average federal mortgage rates for the end of December increased to 6.91% for a 30-year term. Let's dive into the key market data for the Denver residential real estate market to see what is happening with supply, demand, sales prices, and months of inventory for December 2024.
Supply
In December, we had 2,540 new listings hit the market! This is 0.1% up from last year and down (31.5%) in comparison to November 2024.
The total amount of active listings for the end of the month was 8,300 listings. This is a 19.1% jump from December 2023 and a (23.2%) decrease in comparison to Nov 2024. The 10-year average for December is 5,930 active listings, which means we are well above the long-term average!
The most recent report for detached home construction starts is November 2024. The Denver Metropolitan Statistical Area (MSA) pulled permits on 556 homes. This is lower than the four-year average of 823 for November.
Demand
Showings are a great leading indicator of demand in the residential real estate market. There were 32,653 showings booked through the largest showing service, ShowingTime, in the Denver metro area during December. This is up 10.0% when compared to Dec 2023 and down (19.2%) compared to November 2024. The average amount of showings for Dec, over the last four years, is 43,794.
Denver had 2,393 properties go under contract in Dec 2024. This is up 9.0% compared to Dec 2023 and down (14.7%) from Nov 2024.
There were 3,067 closings in Dec 2024 compared to 3,013 in Nov 2024. This is a 1.8% increase from last month. A year ago, we had 2,650 closings in Dec so the volume is up 15.7% YOY.
The median days on the market for December increased from 28 to 39 days, compared to last month. The list price-to-close price ratio decreased to at 99.30%, so sellers are generally getting what they are asking, but usually a little less. With that said, I have seen overpriced homes sit on the market for a long time.
All in all, demand for housing is softer right now due to the higher property prices and higher interest rates. Let’s look at the median sales price.
Sales
The long-term average appreciation for residential real estate is 6%. Higher prices and higher interest rates will continue to limit appreciation in the short run. Low inventory is helping to prop up the market. If we wake up tomorrow to 35,000 listings on the market, this would be a buyer's market and prices would likely be going down.
This month, average sale prices are at $676,011, which is a 4.3% increase compared to last December.
Let’s look at months of inventory now.
Months of Inventory
The months of inventory is a great indicator to watch for market trends. Typically, a seller’s market has 0-3 months of inventory. A balanced market has 4-6 months of inventory, and 7+ months of inventory is a buyer’s market. In a seller’s market prices go up. In a buyer’s market prices go down.
With 8,300 listings on the market and 3,067 closings in December, the months of inventory is at 3 months or 11.59 weeks. Therefore, the inventory is still low in the long run, but the highest it's been since 2013. We are expecting it to keep rising.
All in all, months of inventory is a great metric to watch.
Final Thoughts
In conclusion, supply, demand, median sales price, and months of inventory are ideal key performance indicators to watch for market trends. Supply is continuing to rise, while closings are staying lower. Overall demand is steady even with higher prices and higher interest rates. We believe there is a tremendous amount of pent-up demand happening right now and as soon as rates come down, more buyers will enter the market. Lastly, 3 months of inventory is still quite low.
To read and view the full presentation, click here: Denver Metro Residential Market Update December 2024.pdf