The Denver residential market is starting to pick up a little bit. The 10-year average for new listings in October is 5,147, but for October 2024, the number of new listings was below the 10-year average at 5,046. The inventory is continuing to increase, we are at 4 months of inventory. The average mortgage rates for the end of October increased to 6.72% 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 October 2024.
Supply
In October, we had 5,046 new listings hit the market! This is 20.9% up from last year and down (5.5%) in comparison to September 2024.
The total amount of active listings for the end of the month was 12,199 listings. This is a 32.4% jump from October 2023 and a 1.5% increase compared to Aug 2024. The 10-year average for October is 8,385 active listings, which means we are well above the long-term average.
The most recent report for detached home construction starts is September 2024. The Denver Metropolitan Statistical Area (MSA) pulled permits on 620 homes. This is lower than the four-year average of 837 for September.
Demand
Showings are a great leading indicator of demand in the residential real estate market. There were 48,929 showings booked through the largest showing service, ShowingTime, in the Denver metro area during October. This is up 18.2% when compared to Oct 2023 and down (2.5%) compared to Sep 2024. The average amount of showings for Oct, over the last four years, is 70,845.
Denver had 3,480 properties go under contract in Oct 2024. This is up 23.2% compared to Oct 2023 and up 3.8% from Sep 2024.
There were 3,444 closings in Oct 2024 compared to 3,217 in Sep 2024. This is a 7.1% increase from last month. A year ago, we had 3,039 closings in Oct so the volume is up 13.3% YOY.
The median days on the market for October increased from 25 to 26 days, compared to last month. The list price-to-close price ratio decreased to at 99.80%, 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 median sales price has increased by 2.6% from last October. The median price in October was $590,000, which is also 3.5% higher than last month. 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, average sale prices are up 3.3% compared to last August!
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 12,199 listings on the market and 3,444 closings in October, the months of inventory is at 4 months or 15.18 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 view the full presentation: Denver Metro Residential Market October 2024.pdf