December 2023 Market Report
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This time of year, we enjoy reflecting on a closed chapter while holding optimism for what may transpire in the year ahead, says the Denver Metro Association of Realtors’ Market Trends Committee.
Last year, the Denver real estate market was challenging. We dealt with a lack of inventory and interest rates that seemed to go up 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.
If rates continue to decline, I expect to see more buyers enter the marketplace. There has been significant pent-up demand from both buyers and sellers over the last two years who have been interest rate adverse. 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, there is nothing stopping buyers from getting out there.
Although interest rates started their descent in November, December numbers 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 davs.
However, the outlook is more positive if we compare the numbers to this time 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 a little over $1,000 and median days in MLS decreased slightly from 30 days last year to 29 days.
The performance was better for single-family homes year-over-year with new listinqs increasing 4.33 percent and pending sales rising 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.
Conversely, attached homes were a bit more sluggish vear-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
As previously noted, 2023 performed most similarly to a pre-pandemic 2019. While new listings and closed sales were both higher in 2019, a higher median close price of $580,000 last year kept sales volume similar with only a 0.76 percent decline. Similarly, while inventor 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
National predictions indicate a slight increase in inventory with prices staving relatively stable. Historicallv, Denver does not follow national trends and predictions, often outperforming the rest of the country. Ultimately the traiectory of the vear is dependent upon interest rates and consumer confidence.
Learn more about the market from the Denver Metro Association of Realtors.
