denver housing market trends and forecast for 2024
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By Marco Santarelli | Published on March 31, 2024
Denver has secured its position as the hottest housing market in the nation, a title bestowed by the U.S. News and World Report. The analysis, based on the U.S. News Housing Market Index, meticulously examines various factors shaping the real estate landscape.
The Denver-Aurora-Lakewood Metropolitan Statistical Area (MSA) emerges as the frontrunner with a remarkable score of 74.8. This reflects a notable 7-point increase compared to the previous year, underlining the city's sustained growth and attractiveness in the real estate sector.
The report identifies several factors contributing to Denver's red-hot housing market. Noteworthy among them is the region's commendably low unemployment rate, minimal mortgage delinquencies, and a low rental vacancy rate. However, a significant challenge surfaces in the form of an insufficient housing supply, acting as a counterforce to the surging demand.
The housing market index takes into account critical metrics, including supply and demand. Denver faces a glaring issue with the supply of homes struggling to meet the burgeoning demand. This is measured by the number of months it would take to exhaust all existing listings. As of December 2023, Denver's housing supply could last only 1.9 months, trailing behind the national average of 2.6 months.
Despite the high demand, Denver experiences a nuanced scenario in its median sales prices. After reaching a peak of $595,000 in June, the median price sees a decline, settling at $550,000 by the year-end. However, this dip is marginal, marking only a 0.2% year-over-year decrease. In contrast, the national median sales price witnesses a 4.0% year-over-year increase, emphasizing Denver's premium standing with a median price approximately 36% higher than the national average.
As Denver grapples with the delicate balance between demand and supply, it is likely that prices will maintain their elevated status both locally and nationally until a substantial increase in supply becomes available for sale. The city's housing market journey remains a captivating tale, marked by challenges and successes that resonate on a broader real estate landscape.
Colorado shines on the national housing stage, with three additional cities making their mark in the top 20. Fort Collins claims the 12th spot, followed by Greeley at 15th, and Colorado Springs securing the 19th position. This collective success positions Colorado as a real estate powerhouse.
Denver Housing Market Trends in 2024
How is the Housing Market Doing Currently?
In February 2024, the 11-county Denver Metro housing market displayed early signs of activity in the buying and selling season. According to the data by REcolorado, there's a palpable sense of optimism among households, driven by the anticipation of potential decreases in mortgage rates. This optimism has spurred an increase in inventory levels, which were 25% higher than the previous year and a remarkable 176% higher than two years ago. Sellers have been actively contributing to this trend by bringing more listings to the market.
February witnessed double-digit growth in the number of new listings for the second consecutive month, with 4,267 homes hitting the market. Additionally, both year-to-year and month-to-month increases were observed in home closings, with strong demand pushing closing prices up. The median closed price for homes in February stood at $575,000, marking a 3% increase compared to the same time last year.
How Competitive is the Denver Housing Market?
Home shoppers were particularly active during February, executing contracts on 3,454 home listings. The number of pending sale listings in February was slightly higher than the previous year, indicating sustained interest from buyers. These homes remained actively available in the market for an average of 25 days, reflecting a slight decrease compared to the previous year.
In terms of rental properties, February saw a 16% increase in leased properties compared to February 2023. Although the median leased price experienced a slight decrease compared to the previous year, single-family homes commanded the highest median leased price at $3,000 per month.
Are There Enough Homes for Sale to Meet Buyer Demand?
The Denver Metro market experienced a surge in fresh listings, with sellers bringing 4,258 new listings to the market in February. This represents a notable 21% increase compared to the previous year. The market also witnessed a second consecutive jump in new listings, which were up by 25% from January and a significant 145% increase from the beginning of the year.
Despite this increase in listings, buyer demand remained robust. Throughout the month, buyers executed contracts on 3,451 home listings. The number of pending sale listings was slightly higher than the previous year and 11% higher than the previous month.
What is the Future Market Outlook for Denver?
Looking ahead, the future market outlook appears promising, albeit with certain considerations. The price range that saw the most activity in February was $500,000 to $600,000, indicating a strong market presence within this range. Additionally, standing inventory, or the number of listings actively available for sale at the end of the month, was 25% higher than the previous February, with 5,218 homes actively available for sale in the Denver Metro area.
The gross sales volume in February also experienced a healthy increase of 10.5% compared to the same period last year, further underlining the market's resilience and potential for growth.
Is It a Buyer's or Seller's Housing Market?
Considering the current state of the Denver housing market, it's fair to say that it leans towards being a seller's market. With inventory levels on the rise but still unable to fully meet the robust demand from buyers, sellers continue to enjoy favorable conditions. However, buyers are also active in the market, capitalizing on opportunities and driving competition. As mortgage rates potentially decrease, this dynamic could further influence the balance between buyers and sellers in the coming months.
Denver Rental Market Insights for February 2024
In February 2024, the rental market in the Denver area witnessed notable activity and trends. Here are the key statistics and insights:
– Leased Properties: A total of 305 properties were leased using the REcolorado MLS platform, representing a significant increase of 16% compared to February 2023. This uptick in leased properties indicates sustained demand for rental housing in the region.
– Median Leased Price: Despite the increase in leased properties, the median leased price experienced a slight decrease compared to the previous year. However, it's worth noting that the median leased price per square foot actually saw a 3% increase, suggesting that while overall prices may have dipped slightly, there may have been a shift towards smaller, more cost-effective rental units.
– Single-Family Homes: Single-family homes continued to command the highest leased prices in February, with a median monthly rent of $3,000. This indicates that demand for standalone rental properties remains strong, likely driven by factors such as space requirements and lifestyle preferences.
– New Rental Listings: Throughout February, 326 new rental listings were added to the REcolorado MLS platform, indicating ongoing activity in the rental market and a willingness among landlords to bring their properties to market to capitalize on demand.
– Active Rental Properties: At the close of February, there were 553 active rental properties listed on the REcolorado MLS platform. This inventory of available rental units provides options for prospective tenants and contributes to the overall vibrancy of the rental market.
Overall, the rental market in the Denver area demonstrated resilience and activity in February 2024, with increased leasing activity, a diverse range of rental properties available, and a continued preference for single-family homes among renters.
ALSO READ: Colorado housing market forecast & trends
Denver Housing Market Forecast 2024 and 2025
What are the Denver real estate market predictions for the next twelve months? Denver has a track record of being one of the best long-term real estate investments in the U.S. Denver's strong economy gives buyers the ability to spend more on housing, consequently increasing real estate prices. Home values have risen so much over the past six or seven years that affordability has become an issue for a person earning the median income in this area.
According to Zillow, the average home value in the Denver-Aurora-Lakewood Metropolitan Statistical Area (MSA) stands at $581,367, reflecting a modest 1.2% increase over the past year. Homes in this region typically go pending within an average of 21 days.
Market Forecast
The one-year market forecast, as of February 28, 2024, indicates a slight -0.3% change. While this forecast hints at stability, it's essential to examine additional metrics to gauge the overall market health.
Key Metrics Defined
For Sale Inventory: As of February 29, 2024, Denver boasts 6,862 properties listed for sale.
New Listings: In February 2024, 2,381 new listings entered the market, contributing to inventory diversity.
Median Sale to List Ratio: This ratio, recorded as 0.995 in January 2024, indicates a balance between listing prices and actual sale prices.
Median Sale Price: As of January 2024, the median sale price in Denver stood at $539,000.
Median List Price: The median list price for homes in Denver, reported on February 29, 2024, is $590,000.
Percent of Sales Over/Under List Price: In January 2024, 23.2% of sales were recorded above list price, while 52.7% were below list price, highlighting the variance in pricing dynamics.
The Denver-Aurora-Lakewood MSA encompasses several counties, including Denver County, Arapahoe County, and Jefferson County, among others. With its diverse urban and suburban landscapes, the housing market caters to a wide range of preferences and needs.
Are Home Prices Dropping in Denver?
While the housing market in Denver has shown resilience with a modest 1.2% increase in average home values over the past year, there is no indication of a significant drop in prices. However, market conditions can evolve rapidly, influenced by various economic and societal factors. Continuous monitoring of key metrics and trends is essential to stay informed about any shifts in pricing dynamics.
Will the Denver Housing Market Crash?
Predicting a housing market crash with absolute certainty is challenging due to the multitude of factors influencing market behavior. While Denver's housing market has demonstrated stability with a forecasted -0.3% change over the next year (as of February 28, 2024), it's crucial to remain vigilant and consider potential risk factors such as economic downturns, interest rate fluctuations, and geopolitical events. Employing sound financial practices and consulting with real estate professionals can help mitigate risks and navigate market uncertainties.
Is Now a Good Time to Buy a House in Denver?
Deciding whether it's an opportune time to purchase a home depends on individual circumstances, financial readiness, and long-term goals. Despite competitive pricing and seller-friendly conditions in Denver's housing market, favorable mortgage rates and a diverse inventory may present favorable opportunities for buyers. Conducting thorough research, assessing personal financial capabilities, and consulting with real estate experts can help determine whether now is the right time to embark on homeownership.
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