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June Metro Denver Market Review

Seasonality, persistently higher interest rates, and increased inventory characterized the Denver real estate market in June. At the end of the month, we had 10,214 active listings in the eleven-county Denver metro area, marking the highest level since September 2013. Meanwhile, median home prices are up 1.3% from last year. This summer season has been marked by strategic moves and cautious optimism, making it crucial to navigate the market strategically.

Inventory Trends and Historical Context

In June, Denver experienced a notable uptick in active listings, rising by 11.52% from May to reach 10,214 units, marking a substantial 68.27% increase from last year. While this number may surprise you, if we look back to the pre-pandemic data in June of 2019, inventory sat at 9,520 units, and rates were comfortably below 4%. Perhaps because of this and despite the sharp increase in inventory, home prices in Denver surprised observers by climbing 1.33% from May, 1.5% from June 2023, and 3.24% year to date. This resilience indicates that despite the expanded choices, buyers continue to show strong confidence in Denver’s housing market, driving prices upwards.

Buyer Behavior and Market Dynamics

Buyers, fatigued by the frantic pace of the market and recent higher mortgage rates, are taking their time and becoming more selective. Nationwide mortgage purchase applications dropped by 2% from 2023, indicating a cooling in demand. However, buyers, particularly in the single-family home market, remain engaged. Detached homes saw the highest increases in pending and closed sales, reflecting strong buyer confidence in this segment despite higher borrowing costs. 

Additionally, pending sales have increased by 1.43%, but closed sales have dropped by 17.07%. We are seeing buyers exercise their right to be picky and, therefore, an uptick in terminations. The median days on the market also rose by 33.33% to 12 days. These trends suggest that while there is still significant activity, the market is moving at a different pace, with buyers keen to negotiate and find value.

Sellers Adapting to Market Shifts

With this influx of inventory, what are successful sellers doing right? Sellers have succeeded in the current market by focusing on conservative pricing and ensuring their homes are in turnkey condition. Even as buyers have more options, quality inventory is limited, and months of inventory still suggests a sellers market. As a result, some homes still attract multiple offers, but many are spending more time on the market. Active listings saw a significant increase, rising by 11.52% from May to June, and a striking 68.27% year-over-year, indicating a substantial growth in inventory.

Market Performance and Economic Outlook

Year-to-date closed sales are trailing behind any January through June period since 2012, with overall closings down just over 5% year-over-year. Despite a 6% increase in June closings compared to May, the overall trend points towards a market cooling. The broader economic landscape is mixed, with indicators of both resilience and slowing growth. Personal income and consumer spending saw modest increases, suggesting ongoing consumer strength. However, the Federal Reserve’s cautious approach to rate cuts implies that higher rates may persist, continuing to influence market dynamics.

The Denver real estate market in June 2024 reflects a period of transition and adaptation. Sellers must remain competitive with their pricing and presentation, while buyers can take advantage of increased inventory and negotiate favorable terms. As we move into the second half of the year, buyers and sellers should stay informed and work closely with knowledgeable realtors to navigate the complexities of this evolving market. Despite the uncertainties, the long-term outlook for Denver remains positive, supported by strong underlying demand and economic factors.