Denver Real Estate - A Look Back at 2023
Denver Real Estate: A Look Back at 2023
A Year of Balance and Transition in Denver's Real Estate
In Denver's real estate market, 2023 was a year of significant shifts. We saw the market move from its previously unpredictable and skyrocketing growth to a more stabilized state. Although prices haven't declined, they've certainly stopped their steep ascent. This stabilization is intriguing because it defies the classic pattern of supply and demand. Despite an increase in available properties, prices haven't dropped, indicating a unique trend in our local market.
As we head into the spring and early summer of 2024, we're keeping a close eye on the interplay between supply and pricing. Rising prices could reduce the supply, while an ongoing increase in available homes might lead to price reductions. Several external factors, including interest rates, the broader economy, and the fact that it's an election year, will heavily influence the real estate landscape.
Interest Rates and Market Dynamics
It's important to note that lower interest rates don't automatically mean higher sales. As supply diminishes, we could see price increases. Denver might be nearing the end of its real estate boom, with challenges such as crime, homelessness, and congestion affecting the quality of life and potentially leading to a phase of stagnant or negative growth. As net migration shows a decline across the state, the demand that drives housing prices could diminish, pulling prices down with it.
The Impact of Rate and Interest Rate Volatility
Looking at median price changes year-over-year, the volatility of the market has exhausted many potential homebuyers. In 2021, we saw a more than 20% increase in median prices during six months compared to 2020, and in 2022, there were months with over 10% gains. However, in 2023, almost every month showed a negative growth compared to the previous year. In fact, February and March of 2023 lost -6.5% and -12.6%, respectively. The fluctuation in prices seems to be stabilizing, and we're likely to see less of the dramatic ups and downs that have characterized recent years.
Available Home Inventory and Buyer Choice
The average monthly supply of inventory in Denver for freestanding homes in 2023 was 1.58, a significant increase from the 0.45 combined average in 2021. This increase in options for buyers naturally leads to lower prices due to decreased negotiation power on behalf of the sellers.
What's Housing Outlook for Denver in 2024?
As we look towards remainder of 2024, we anticipate a more consistent market. Trends indicate a slowdown in growth and a shift towards stability. Buyers should keep a keen eye on the market, as now may be a good time to invest. Sellers will still find demand for Denver properties, though less than in previous years. Marketing will focus more on individual properties, and the sales process may take longer, bringing patience back into the equation. Buyers should consider current interest rates, which, while higher than in recent years, are still low historically. Prices are expected to remain relatively steady, making real estate a safe investment for those looking for long-term gains.
Is Now the Time to Buy Real Estate in Denver?
In summary, yes. As we look back at 2023 and forward to 2024, the Denver real estate market presents a more balanced environment for both buyers and sellers. With long-term gains in mind, it's always a good time to invest in real estate, regardless of the high prices. The journey to returns might be longer, but the stability of the market offers a safer investment opportunity. Historically, Colorado has been a resilient market and we continue to be featured in US News & World Report's Top Places to Live. While Denver is on the list, we are in 99th place - so let's see if we can improve that for next year!