December 2024 Denver Metro Market Review
As we bid farewell to 2024, the Denver Metro real estate market reflected a mix of seasonal trends and indicators of economic factors that have been brewing for some time. The year brought 12.60% more new listings for buyers and a 2.08% higher median closed price for sellers, demonstrating that growth is possible even as the market balances. With this, we can expect a competitive spring market, with significant influence from shifting mortgage rates and buyer demand.
Inventory and Market Activity
The year ended with 38.56% more active listings than in 2023, providing buyers with more choices than in recent years. Closed properties increased modestly by 0.90% year-over-year to 42,404, though this figure remains 33.86% below 2021 levels. The rise in inventory was also reflected in the median days on the market, reaching 40 days in December, up 43% from November, and 18 days for 2024, up 50% from 2023. While historically, inventory is still low, there is a power shift to the buyer. We’ve seen this to mean pricing strategy for sellers is as crucial as ever. If you overprice your home, you will likely spend more days on the market and empower buyers to negotiate price and concessions. In today’s market, the initial presentation of a home can play a massive role in the outcome of a transaction.
Pricing and Negotiation Trends
Even as inventory climbed, home prices continued their upward trajectory, with the year’s median closed price rising 2.08% from 2023 and 14.30% higher than 2021. The close-to-list price ratio for 2024 was 99.13%, but there was only a modest decline from 2023’s 99.54%, suggesting buyers had slightly more room to negotiate. However, steady price appreciation and resilient demand indicate sellers are still in a favorable position, particularly when homes are priced and presented competitively.
Mortgage Rates and Affordability
Mortgage rates remained one of the biggest influences on market activity in 2024, fluctuating around 7% for much of the year, with occasional shifts driven by economic reports and political events. Stabilization in rates late in the year spurred a 16% increase in mortgage applications, indicating buyers may be ready to act when conditions feel predictable. Experts forecast that rates may stabilize in the mid-6% range in 2025, potentially spurring increased activity and boosting buyer confidence. Borrowing costs are just one piece of the affordability equation that challenges would-be Denver home buyers. Home affordability also includes home insurance, property taxes, and maintenance costs – all of which have increased in recent history.
The challenge is even more significant for buyers at lower price points. These buyers are likely to need private mortgage insurance (PMI). Additionally, last month, the median price of an attached home was $394,000, compared to the median price of a detached home at $639,700. Attached homes are much more likely to have HOA fees, which have risen notably to keep up with maintenance costs. These factors, combined with elevated home prices, have many buyers feeling that homeownership is out of reach. However, the market’s growing inventory and potential rate stability in 2025 may offer some relief to buyers navigating these challenges.
Looking Ahead to 2025
With increased inventory, steady price growth, and the possibility of more stable mortgage rates, there are quite a few opposing factors influencing the 2025 Denver Metro Market. Buyers can capitalize on the current market conditions to negotiate favorable terms before competition intensifies in the spring. Meanwhile, sellers, supported by strong home equity and persistent demand, are positioned to succeed with the right strategy. With the right advisor by your side, all things remain possible in the robust Denver market.