The Denver residential market is showing signs of growth! The 10-year average for new listings is 6,097 for March, but we only saw 5,204 new listings in March. The inventory is increasing and currently, we have 2 months of inventory. Mortgage interest rates with a 30-year term ended March at 6.79%. 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 March 2024.
Supply
In March, we had 5,204 new listings hit the market! This is up 14.7% compared to Feb 2024, and down (5.1%) from March 2023.
The total amount of active listings at the end of the month was 7,033. This is up 15.0% from March 2023. The 10-year March average from 2014 to 2023 is 6,133 listings, so we are above our long-term average!
The most recent report for detached home construction starts is Feb 2024. The Denver Metropolitan Statistical Area (MSA) pulled permits on 793 homes. This is lower than the four-year average of 860 for February.
Demand
Showings are a great leading indicator of demand in the residential real estate market. There were 59,700 showings booked through the largest showing service in the Denver metro area during February.
This is up 0.4% when compared to Mar 2023 and up 13.8% compared to Feb 2024. The average amount of showings for March, over the last four years, is 93,102.
Denver had 4,210 properties go under contract in March 2024. This is up 8.1% compared to March 2023 and up 32.2% from Feb 2024.
There were 3,544 closings in Mar 2024 compared to 2,966 in Feb 2024. This is a 19.5% increase from last month. A year ago, we had 3,938 closings in March so the volume of closings down (10.0%) YOY.
The median days on the market for March increased from 10 to 11 days, in comparison 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 Prices
The median sales price has slowly risen during Q1 2024 but is just below March 2022. The median price in March was $590,000, which is up from $575,000 in February. This metric includes detached and attached properties. The median price has increased $26k from March 2023.
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 4.6% from last year! Compared to last month, March is up 2.6% from February.
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 7,033 listings on the market and 3,544 closings in March, the months of inventory is at 2 months or 8.50 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 higher than the record lows of 2022 and 2023 but is still lower than the long-term average. 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, 2 months of inventory is still quite low.
Link to full presentation: Denver Metro Residential Market Update Mar2023.pdf