As we welcome the new year, it’s a time for reflection and anticipation, particularly in the Denver real estate market. Last year was marked by challenges including scarce inventory and rising interest rates. However, both buyers and sellers adapted, leading to a more balanced market. With interest rates now on a downward trend, there’s growing curiosity about what lies ahead for Denver’s real estate in the coming year.
The potential for continued decline in mortgage rates is poised to attract more buyers, responding to the accumulated demand from those previously deterred by high rates. This increase in demand could exert upward pressure on home prices, albeit not as dramatically as seen in previous years. Prices are expected to rise steadily. Should demand surge, we anticipate a growth in inventory as sellers become more confident in moving forward under more favorable financial conditions. This year, the selling season is likely to kick off earlier, spurred by this pent-up demand, more attractive lending terms, and milder temperatures.
December’s real estate data aligned with Denver’s typical seasonal trends, despite the beginning of declining interest rates in November. The median closing price saw a slight decrease to $551,993, and closed sales dropped by 7.65% to 2,620 properties. A notable change was the increase in median days on the market, from 22 to 29 days.
Comparing year-over-year statistics offers a brighter perspective. New listings remained stable with only a slight decline, while pending sales showed a significant increase of 10.87%. The median closing price and days on the market remained fairly consistent with the previous year’s figures.
Analyzing the data for single-family homes and attached homes separately reveals distinct trends. Single-family homes saw an improvement with an increase in new listings, pending sales, and median closing prices. Conversely, attached homes experienced a downturn in new listings and closed sales, although pending sales and median closing prices showed modest gains.
Reflecting on the entire year of 2023, the Denver market mirrored the patterns of the pre-pandemic year of 2019 in several aspects. While new listings and closed sales were higher in 2019, the median closing price in 2023 sustained a similar sales volume. The inventory showed a gradual monthly increase, but active listings at month-end slightly decreased.
National real estate predictions suggest a minor rise in inventory and stable prices. However, Denver often diverges from these national trends, typically outperforming the broader market. The direction of Denver’s real estate market in the upcoming year will largely hinge on interest rate trends and consumer confidence.
In summary, the Denver real estate market of the past year was a testament to adaptability in challenging conditions. With current trends favoring buyers and sellers alike, there is cautious optimism for a dynamic and prosperous year ahead in the Denver real estate landscape.
As always, should you have any questions about the buyer or selling process, our team is here to help.
Jason Sirois