The Denver residential market is staying steady. The 10-year average for new listings in February is 4,653. For February 2025, the number of new listings was above the 10-year average at 5,076. The inventory is continuing to increase, we are at 4 months of inventory. The average federal mortgage rate for the end of Feb is 6.76% 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 Feb 2025.
Supply
In February, 5,076 new listings hit the market! This is 11.8% up from last year and up 10.2% from Jan 2025.
The total number of active listings at the end of the month was 9,716. This is a 34.2% jump from February 2024 and a 6.2% increase in comparison to Jan 2025. The 10-year average for February is 6,038 active listings, which means we are well above the long-term average!
The most recent report for detached home construction starts is January 2025. The Denver Metropolitan Statistical Area (MSA) pulled permits on 985 homes. This is lower than the four-year average of 1,425 for January.
Demand
Showings are a great leading indicator of demand in the residential real estate market. There were 50,387 showings booked through the largest showing service, ShowingTime, in the Denver Metro Area during February. This is down (3.9%) when compared to Feb 2024 and up 12.0% compared to last month. The average amount of showings for Feb, over the last four years, is 63,989.
Denver had 3,401 properties go under contract in Feb 2025. This is up 8.5% compared to Feb 2024, and up 22.6% in comparison to last month.
There were 2,643 closings in Feb 2025 compared to 2,296 in Jan 2025. This is a 15.1% increase from last month. A year ago, we had 2,980 closings in Feb so the volume is down (11.3%) YOY.
The median days on the market for February decreased from 43 to 29 days, compared to last month. The list price-to-close price ratio increased to 100.00%, so sellers are generally getting what they are asking. 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 $694,059, which is a 3.6% increase compared to last February.
Let’s look at months of inventory now.
Months of Inventory
The months of inventory are 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 9,716 listings on the market and 2,643 closings in February, the months of inventory are at 4 months or 15.75 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, 4 months of inventory is still quite low.
To read and view the full presentation, click here: Denver Metro Residential Market Update Feb 2025.pdf