Sellers in metro Denver rose from their slumber last month, putting more new listings on the market and setting the stage for a larger number of home closings this month and next, according to a monthly update from the Denver Metro Association of Realtors.
New listings, which have been restrained since interest rates started rising from historic lows in 2022, jumped 90% between December and January to 3,280 and are up 14.7% from a year ago. Big jumps in listings between December and January, however, are common, and back in January 2019, there were 4,821 new listings, representing a 110% monthly increase.
Buyers closed on 2,051 homes and condos last month, a quarter fewer than December and 6.3% below year-ago levels. Given that it can take a month or more from when a home is put under contract to when the closing happens, that decline reflects more of what was happening in November and December and not the enthusiasm buyers are showing in the new year.
Pending home sales, a measure of upcoming activity, increased 42.6% month-over-month to 3,294 and are up 6.5% from a year earlier.
Increased demand pushed the median price of a single-family hold to $625,000, which is 2.5% higher than in December and 4.2% higher than the median price of $599,900 reached in December 2023. The median price of a townhome and condo sold went the other way, dropping 5.9% on the month to $395,000, which was 0.13% lower on an annual basis.
The inventory of single-family listings available dropped 4.8% on the month to 3,336 but was up 15.3% from a year earlier. The inventory of condo and townhome listings rose 4.7% in January to 1,535 and is up 25% from a year earlier.
Single-family homes were spending a median of 37 days before going under contract, up from 29 days in December, but on par with the time required a year earlier. Condo and townhome listings took a median of 34 days to go under contract, compared to 31 in December and 28 a year earlier.
As was the case in 2023, all eyes are on interest rates, which the Federal Reserve decided not to lower last week.
“The spring selling season will likely be strong this year due to pent-up demand and more favorable lending terms. While it’s not a consistent prediction, if interest rates decline below 5%, (on a 30-year mortgage) we may see tighter inventory and more competitive scenarios once again,” predicted Libby Levinson-Katz, chairwoman of the DMAR Market Trends Committee, in comments included with the report.
Levinson-Katz said many buyers are “waiting on the fence” for interest rates to move lower, which will help lower monthly payments. But she warns trying to time the market could result in buyers paying more as the market heats up and bidding wars return, driving up prices.
Sellers were especially aggressive when it came to listing properties priced at $1 million or above. Listings in that category were up 172.6% on the month and nearly 40% from a year earlier. But buyers responded, driving pending home sales up 46% on the month and 23.3% on the year.
Even with that stronger demand, listings at the high end of the market took a median of 55 days to go under contract in January compared to 33 days in December, but that number is expected to come back down.
Nick DiPasquale, a DMAR Market Trends Committee member, said competition between buyers is already heading up and should continue to ramp up into the peak spring homebuying season. He likened the housing market to the dating market.
“It requires proper expectations and the right mindset. There will be competition and the fear of rejection that comes with it. There might even be heartache. Through it all, when you find the one that is meant to be, you simply know and it all works out,” he said in prepared comments.