This time of year, I enjoy reflecting on a closed chapter while holding optimism for what may transpire in the year ahead. Last year, the Denver real estate market was challenging. We dealt with a lack of inventory and interest rates that seemed to increase daily.
Despite these issues, buyers and sellers found a way to come together in a stabilizing market. Sellers said goodbye to multiple offers received in a weekend, and buyers were finally able to negotiate. As mortgage rates continue to decline, we all want to know what the Denver real estate market has in store this year.
Will Interest Rates Continue to Come Down?
If rates continue declining, I expect more buyers to enter the marketplace. Over the last two years, there has been significant pent-up demand from buyers and sellers who have been adverse to interest rates.
If demand increases, this will ultimately provide some pressure on home prices. While I do not think we will see the same upward pressure on prices that we saw a few years ago, prices will continue to rise. If demand spikes, inventory will grow throughout the year as sellers find comfort in making a move with more reasonable financing options.
Additionally, I expect the selling season to start earlier this year than last. With pent-up demand, more favorable lending terms, and warmer temperatures than last year, nothing is stopping buyers from getting out there.
By the Numbers
Although interest rates started their descent in November, the numbers for December stayed consistent with Denver’s seasonal rhythm. Month-over-month, the median close price dropped 2.8 percent to $551,993, while closed sales dropped 7.65 percent to 2,620. Most notably, the median days in MLS jumped 31.82 percent from 22 to 29 days.
However, the outlook is more positive if we compare the numbers to a year ago with the same seasonal factors. Year-over-year new listings declined by only nine homes from last year, with 1,725 new homes for sale, and pending sales increased 10.87 percent to 2,471 homes. The median close price jumped slightly over $1,000, and median days in MLS decreased slightly from 30 days last year to 29 days.
Single-Family Homes in Denver
The performance was better for single-family homes year-over-year, with new listings increasing by 4.33 percent and pending sales rising by 12.98 percent. The median close price increased 2.25 percent from $600,000 to $613,500, the close-price-to-list-price ratio increased to 99.55 percent, and median days in MLS declined from 32 to 29 days.
Condos and Townhomes
Conversely, attached homes were a bit more sluggish year-over-year, with new listings down 10.77 percent, closed sales declining by 10.57 percent, median days in MLS increasing to 30 days, and the close-price-to-list-price ratio declining to 98.53 percent. However, interest rates helped pending sales with a 5.95 percent increase, and the median close price rose 2.46 percent to $418,701.
2023 In Review
As I’ve noted, 2023 performed most similarly to pre-pandemic 2019. While new listings and closed sales were higher in 2019, a higher median close price of $578,000 last year kept sales volume similar, with only a 0.76 percent decline. Similarly, while inventory continued to climb each month, active listings at month-end declined slightly by 1.31 percent, while median days in the MLS landed at 12 days versus 13 days in 2019.
Denver Aligns with National Trends?
National predictions indicate a slight increase in inventory, with prices staying relatively stable. Historically, Denver has not followed national trends and predictions, often outperforming the rest of the country. Ultimately, the trajectory of the year is dependent upon interest rates and consumer confidence.
Do you need to find or sell a home in the Denver real estate market? Please give me a call. I’m a veteran real estate professional in the area and can help you sell for the best price or find the right home. Click here to contact me.