The Denver residential market is showing signs of softening. The 10-year average for new listings in July is 6,662, but for July 2024, the number of new listings was below the 10-year average at 5,476. The inventory is continuing to increase, we are at 3 months of inventory. The average mortgage rates for the end of July were at 6.73% 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 July 2024.
Supply
In July, we had 6,662 new listings hit the market! This is up 7.4% from July 2023, and down (10.9%) in comparison to last month.
The total amount of active listings for the end of the month was 11,672 listings! This is a 44.2% jump from July 2023 and a 0.7% increase compared to June 2024. The 10-year average for July is 8,757 active listings, which means we are well above the long-term average.
The most recent report for detached home construction starts is June 2024. The Denver Metropolitan Statistical Area (MSA) pulled permits on 773 homes. This is lower than the four-year average of 1,154 for June.
Demand
Showings are a great leading indicator of demand in the residential real estate market. There were 51,545 showings booked through the largest showing service, ShowingTime, in the Denver metro area during July. This is down (6.7%) when compared to July 2023 and up 1.1% compared to June 2024. The average amount of showings for July, over the last four years, is 78,081.
Denver had 3,712 properties go under contract in July 2024. This is up 3.7% compared to July 2023 and up (1.2%) from June 2024.
There were 3,746 closings in July 2024 compared to 3,760 in June 2024. This is a (0.4%) decrease from last month. A year ago, we had 3,732 closings in July so the volume is up 0.4% YOY.
The median days on the market for July increased from 13 to 16 days, compared to last month. 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 overpriced homes sit on the market for a long time.
All in all, demand for housing is softer than during the pandemic due to the higher interest rates. Let’s look at the median sales price.
Sales
The median sales price has slowly risen but is just below June 2024. The median price in July was $590,000, which is up 0.5% from July 2023. This metric includes detached and attached properties.
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, prices were up 0.5% from last year! Compared to last month, July was (1.7%) less than June.
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 11,672 listings on the market and 3,746 closings in July, the months of inventory is at 3 months or 13.35 weeks. 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 starting to rise, while closings are 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.
Link to full presentation: Denver Metro Residential Market Update July 2024.pdf