The Denver residential market is off to a slow start this January. The 10-year average for new listings in January is 4,112. For January 2025, the number of new listings was above the 10-year average at 4,601. The inventory is continuing to increase, we are at 4 months of inventory. The average federal mortgage rate for the end of January is 6.95% 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 January 2025.
Supply
In January, 4,601 new listings hit the market! This is 25.9% up from last year and up 118.4% from December 2024.
The total number of active listings at the end of the month was 8,874. This is a 32.1% jump from January 2024 and a 1.9% increase in comparison to Dec 2024. The 10-year average for January is 5,637 active listings, which means we are well above the long-term average!
The most recent report for detached home construction starts is December 2024. The Denver Metropolitan Statistical Area (MSA) pulled permits on 999 homes. This is higher than the four-year average of 958 for December.
Demand
Showings are a great leading indicator of demand in the residential real estate market. There were 44,993 showings booked through the largest showing service, ShowingTime, in the Denver Metro Area during January. This is down (14.2%) when compared to Jan 2024 and up 37.8% compared to December 2024. The average amount of showings for Jan, over the last four years, is 73,185.
Denver had 2,945 properties go under contract in Jan 2025. This is down (0.3%) compared to Jan 2024 and up 31.8% from Dec 2024.
There were 2,286 closings in Jan 2025 compared to 3,117 in Dec 2024. This is a (26.7%) decrease from last month. A year ago, we had 2,144 closings in Jan so the volume is up 6.6% YOY.
The median days on the market for December increased from 39 to 44 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 $674,880, which is a 4.3% increase compared to last January.
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 8,874 listings on the market and 2,286 closings in January, the months of inventory is at 4 months or 16.64 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 January 2025.pdf