Home sales in Denver market drop to slowest pace in 12 years

The housing market in greater Denver limped into 2024 having closed fewer sales than any year since 2011, and at lower prices.

The Mile High City’s metro region had 20.8 percent fewer home sales close in 2023 compared to the previous year, with the value of transactions down 12 percent, the Denver Post reported, citing figures from the Denver Metro Association of Realtors.

During December, the number of closings fell 7.7 percent to 2,620 sales compared to the previous month, and 9.31 percent compared to December 2022.

Despite higher mortgage rates, home prices didn’t drop as many buyers had hoped because many sellers kept their homes off the market, reducing supply.

“Last year, the Denver real estate market was challenging as we dealt with a lack of inventory and interest rates that seemed to go up daily,” Libby Levinson-Katz, chair of the DMAR Market Trends Committee and an area Realtor, said in comments accompanying the monthly report.

If mortgage rates continue to decline, home prices would likely take off again, Levinson-Katz predicted.

Denver saw 41,840 home sales last year —  the fewest number since 2011, after the Great Recession. That’s down from 51,016 closings in 2022, 64,108 in 2021, and 63,516 in 2020.

Higher financing costs and a drop in sales generally forces home prices down. But last year, prices remained stubbornly high.

The median price of a single-family home sold in December was $613,500, 2.1 percent below the $626,550 median in November, but up 2.25 percent from the $600,000 cost of a typical home a year earlier.

Typical condos and townhomes cost $418,701 in December, up from November’s median closing price of $417,000, and up 2.46 from the year-over-year price of $408,650.

There were 4,971 active listings at the end of December, down 25.6 percent from the 6,684 available in November, but up 4.5 percent from a year earlier. 

Last year, sellers listed 49,560 homes and condos, down from 60,189 in 2022 and 66,333 in 2021. In 2019, before the pandemic, Denver had 71,000 total listings.

The fewer listings was attributed to homeowners with low mortgage rates unwilling to trade up for homes tied to higher borrowing costs. That has cut down on the number of listings and steered more buyers to purchase newly built homes instead of existing ones, according to the Post.

Buyer demand has also fallen with rising mortgage rates, causing homes to take longer to sell. As of December, listings were taking a median of 29 days to go under contract, compared to five days in 2022 and four days in 2021.

— Dana Bartholomew

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