The Denver residential market is showing signs of growth! The 10-year average for new listings is 4,528 for the month of February, but we saw 4,536 new listings this month! Which is more than the 19-year average. The inventory is increasing and currently we have 2 months of inventory. Mortgage interest rates with a 30-year term ended February at 6.94%. Let’s dive into the key market data for Denver residential real estate market to see what is happening with supply, demand, sales prices, and months of inventory for February 2024.
Supply
In February, we had 4,536 new listings hit the market! This is up 24.3% compared to Jan 2024, and up 22.2% from Feb 2023.
The total amount of active listings at the end of the month was 6,665. This is up 22.5% from February 2023. The 10-year February average from 2014 to 2023 is 5,658 listings, so we are below our long-term average.
The most recent report for detached home construction starts is Jan 2024. The Denver Metropolitan Statistical Area (MSA) pulled permits on 777 homes. This is higher than the three year average of 832 for January.
Demand
Showings are a great leading indicator for demand in the residential real estate market. There were 52,454 showings booked through the largest showing service in the Denver metro area during February.
This is down (1.0%) when compared to Feb 2023 and up 15.2% compared to Jan 2024. The average amount of showings for February, over the last four years, is 87,361.
Denver had 3,407 properties go under contract in February 2024. This is up 2.3% compared to February 2023 and up 13.2% from January 2024.
There were 2,917 closings in Feb 2024 compared to 2,122 in Jan 2024. This is a 37.5% increase from last month. A year ago, we had 2,797 closings in Feb so the volume of closings is up 4.3% YOY.
The median days on market for Feb 2024 decreased from 35 to 23 days, in comparison to last month. This means the market is starting to pick up, houses are sitting on the market for less time.
The list price to close price ratio held steady at 100%, so sellers are generally getting what they are asking. With that said, I have seen homes that are over priced sit on the market for a long time.
All in all, demand for housing is soft when we look at showings but decent when we look at closings. Let’s look at the median sales price.
Sales Prices
The median sales price has slowly raised, compared to last month. The median price in February was at $575,000, but compared to in January was at $559,945. This metric includes detached and attached properties. The median price has increased $18k from last February.
The long-term average appreciation for residential real estate is 6%. Higher prices and higher interest rates will continue to temper appreciation in the short run. Tight inventory is helping to prop up the market.
This month, prices were up 3.4% from last year! Compared to last month, February is up 2.7% from January.
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 6,665 listings on the market and 2,917 closings in February, the months of inventory is at 2 months or 9.79 weeks of inventory. Therefore, the inventory is still low, but is continuing to pick up. We are expecting it to slowly increase.
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 higher than the record lows of 2022 and 2023 but is still lower than the long-term average. Overall demand is there, 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, 2 months of inventory still quite low.
Link to the full presentation: Denver Metro Residential Market Update Feb 2023.pdf