The Denver residential market is continuing to slow down. The 10-year average for new listings in September is 5,813, but for September 2024, the number of new listings was below the 10-year average at 5,336. The inventory is continuing to increase, we are at 4 months of inventory. The average mortgage rates for the end of September dropped to 6.12% 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 September 2024.
Supply
In September, we had 5,336 new listings hit the market! This is up 9.2% from last year and down (1.5%) from Aug 2024.
The total amount of active listings for the end of the month was 12,372 listings. This is a 33.3% jump from September 2023 and a 1.5% increase compared to Aug 2024. The 10-year average for August is 8,918 active listings, which means we are well above the long-term average.
The most recent report for detached home construction starts is August 2024. The Denver Metropolitan Statistical Area (MSA) pulled permits on 606 homes. This is lower than the four-year average of 939.25 for August.
Demand
Showings are a great leading indicator of demand in the residential real estate market. There were 50,201 showings booked through the largest showing service, ShowingTime, in the Denver metro area during Sept. This is up 11.2% when compared to Sep 2023 and down (5.9%) compared to Aug 2024. The average amount of showings for Aug, over the last four years, is 70,210. 
Denver had 3,626 properties go under contract in Sep 2024. This is up 27.3% compared to Sep 2023 and up 4.3% from Aug 2024.
There were 3,175 closings in Sep 2024 compared to 3,657 in Aug 2024. This is a (13.2%) decrease from last month. A year ago, we had 3,175 closings in Sep so the volume is down (2.2%) YOY.
The median days on the market for September increased from 14 to 25 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 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 continuously been decreasing, it was down (1.7%) from last September. The median price in September was $569,900, which is also (2.6%) lower 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 1.9% compared to last September!
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 12,372 listings on the market and 3,175 closings in September, the months of inventory is at 4 months or 16.70 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.