denver housing market: prices, trends, predictions 2024
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via Norada Real Estate Investments
By Marco Santarelli | Published on July 8, 2024
Nicknamed the “Mile High City” for its elevation, Denver's housing market has reached new heights as well. Once known for affordability, Denver now boasts a competitive market with rising prices. This surge is fueled by a booming job market and a limited housing inventory.
However, there are signs of a potential shift with price moderation on the horizon. This article covers everything you should know about this housing market, including home values, trends you should be aware of, and more.
How is the Denver Housing Market Doing?
Home Sales in Denver
In June 2024, the Denver housing market demonstrated the importance of patience, preparation, and persistence. Despite facing seven percent interest rates, the market continued to thrive. New listings increased by 16.51 percent month-over-month and a significant 33.88 percent year-over-year, reaching a total of 6,966 listings. Pending sales saw a modest rise of 1.94 percent month-over-month with 4,265 properties, while closed sales improved by 5.72 percent month-over-month to 4,198.
Denver Home Prices
The median close prices experienced a slight decline of 0.41 percent month-over-month. The attached properties segment showed a median close price of $407,250, reflecting a 2.8 percent decrease month-over-month and a 4.18 percent decline year-over-year. The condo market faced challenges with rising HOA fees, association assessments, and property taxes, leading to a drop in appreciation rates and increased buyer hesitancy.
Denver Housing Supply
The housing supply in Denver has grown, providing buyers with more options. Active listings at the end of the month rose by a remarkable 31.03 percent month-over-month, 75.19 percent year-over-year, and an impressive 150.79 percent from the same time in 2022. This increase in inventory is a significant shift from the previously projected flat inventory levels for 2024.
Denver Housing Market Trends
The Denver housing market is navigating through high-interest rates with strategic adjustments. The months of inventory have grown to 2.18 marketwide, a 16.58 percent increase month-over-month, giving buyers more choices. In the high-end market, properties sold for over $1 million are experiencing subtle changes, with single-family detached properties remaining highly desirable.
The number of closings has increased by 13.95 percent year-to-date compared to last year but is still down by 18.43 percent compared to 2022. This trend highlights how intense the market was before 2022, and even though sales have picked up, the volume and speed of sales seen during the low-interest period are not expected to return.
According to Andrew Abrams, a DMAR Market Trends Committee member, pricing and preparation are more critical than ever. Buyers need to be patient and knowledgeable about different neighborhoods, while sellers must list their properties accurately, stage them well, and market effectively to maximize buyer interest.
In summary, the Denver housing market is characterized by increased listings, modest price adjustments, and a growing supply of homes. Both buyers and sellers need to approach the market with strategic patience, thorough preparation, and persistent efforts to navigate the current landscape successfully.
What's Affecting the Denver Housing Market in 2024?
The Denver housing market in 2024 is experiencing a period of cautious optimism. While some of the challenges that plagued the market in 2023 remain, there are also hints of a potential shift towards a more balanced market.
Lingering obstacles:
Mortgage rates: Interest rates remain higher than in recent years, impacting affordability and dampening buyer enthusiasm somewhat.
Inventory shortage: Denver continues to grapple with a lack of available homes, which puts upward pressure on prices and creates a competitive environment for buyers.
Affordability concerns: With both home prices and interest rates still elevated, Denver is becoming cost-prohibitive for some potential buyers, particularly first-timers.
Reasons for potential hope:
Inventory on the rise: There are indications that the number of homes on the market is gradually increasing. This could lead to a more balanced market where buyers have more options and some leverage in negotiations.
Interest rate dip: Experts predict that mortgage rates will continue to decrease, making homes slightly more affordable and potentially stimulating buyer activity.
Seller adjustments: As market conditions change, sellers may need to adjust their pricing expectations and strategies to attract buyers in a more competitive landscape.
Denver Real Estate Market Predictions: A Balanced Look
The Denver real estate market has been on a tear in recent years, attracting young professionals and boasting a thriving economy. But what's in store for the future? Let's delve into the data and predictions to see where the market might be headed.
Current Market Snapshot (as of May 31, 2024)
Home Values on the Rise: The average Denver-Aurora-Lakewood home value sits at $595,649, reflecting a 2.4% increase over the past year. This indicates a continued upward trend, albeit at a slower pace compared to previous years.
Fast Selling Homes: Homes are flying off the market with an average time in pending status of just 8 days. This signifies a competitive seller's market, with buyers likely facing multiple offers.
Median Sale and List Prices: The median sale price sits at $577,333, while the median list price is $611,100. This suggests that bidding wars are still happening, but some sellers might be adjusting their pricing strategies.
Sales Over and Under List: Interestingly, the data shows a near-even split between sales occurring above (36.5%) and below (38.7%) the list price. This indicates that while some sellers are getting top dollar, others might be encountering a more balanced market.
Market Forecast: Measured Growth Expected
The one-year market forecast for Denver predicts a modest growth of 3% (Zillow). This suggests a potential continuation of the upward trend, but at a more sustainable pace. While some experts predict a leveling-off of prices, a dramatic crash is unlikely.
Boom or Bust? Neither Likely
The data suggests a balanced market, with continued growth but at a slower pace. Factors like a strong job market and desirable quality of life will continue to attract buyers to Denver. However, rising mortgage rates and increasing inventory levels may cool off the market from the frenzied pace seen in previous years.
Here are some additional factors to consider:
Impact of Mortgage Rates: Mortgage rates have a significant influence on affordability. If rates continue to rise, it could dampen buyer enthusiasm and put downward pressure on prices.
Inventory Levels: As more homes become available, buyers will have more choices and potentially more negotiating power. This could lead to a more balanced market where sellers may need to be more realistic with pricing.
Local Market Variations: The Denver metro area is vast, and market conditions can vary between neighborhoods. It's crucial to research specific areas you're interested in to get a more accurate picture.
Overall, the Denver real estate market appears to be transitioning from a seller's market to a more balanced one. While steady growth is expected, a dramatic boom or bust scenario seems unlikely.