Market Update - February 2024

ReColorado and DMAR released market stats for February 2024 and spring has sprung in the Denver real estate market! Buyer activity picked up and nicely updated detached houses listed at or below $650k saw huge showing traffic and multiple offers in their first weekend on the market.

Inventory increased for both detached and attached listings, but it is still very low by historical standards. The average number of active listings in February from 1985 - 2023 was 12,671. February 2024 had 5,511 active listings which is 56.5% below that average.

Anecdotes

We saw a lot of intense competition with our buyers this month. We wrote 3 contracts on nicely updated detached houses that went up against many other offers (one listing had 10 other offers) and our buyers lost all 3 even after bidding up the list price $25k - $45k. I imagine this scenario varies by price point, all 3 of these houses were under $650k. We hosted several open houses on our listings and were absolutely blown away by the traffic at open houses.

I think buyers are sick of sitting on the sidelines waiting for interest rates to come down and buyer competition has picked up dramatically from what we saw in 2023.

The Stats

Average closed price for detached single family homes in Denver Metro was $777,074 which was a 4.16% increase over February 2023

Average Days on Market was 46, down from 50 in January and down 6.12% YoY

Close-Price-to-List-Price Ratio

One metric that we keep a close eye on is the close-price-to-list-price ratio. This metric is basically a proxy for the existence of bidding wars in the market. A value of 100% means that on average listings closed at their asking price, anything above 100% indicates that listings closed for over their asking price and likely had multiple offers, while a value below 100% indicates that offers were below asking price.

In February 2024 the closed-price-to-list-price ratio was 100% meaning that on average listings closed at their asking price. For reference, this ratio was 103.9% in 2022 when there were bidding wars happening all over the place.

Local Topics

Colorado state lawmakers introduced House Bill 24-1152 to try and make it easier to build Accessory Dwelling Units on lots zoned for single family residential. The bill would give homeowners in certain areas the right to build an ADU, creates a grant program to help communities rethink their ADU policies and make them more friendly for ADU development, and prohibits cities from restricting the construction or conversion of an ADU on single family lots. You can find more information about it here.

DMAR reports that attached housing in the metro area is now officially a buyer’s market due to soaring HOA dues, insurability issues, and high mortgage interest rates. There are currently over 1,000 attached housing units on the market below $500k. Attached housing is typically viewed as “the new starter home” but the insurability issues impacting HOA dues paired with high rates have made buying a condo incredibly expensive from a monthly payment perspective versus renting.

Speaking of renting, median rents for attached housing fell to $1,495 in February from $1,515 in January. Median rents for one-bedrooms decreased, but two and three-bedroom median rents increased. Available multi-family rental listings were up approximately 5% in February versus January.