DMAR Real Estate Market Trends Report | OCT. '24
The October market data showcases a tale of two markets. In the first half of the month, buyers were lured back into the market by a brief break in interest rates. Leading up to the highly anticipated Federal Reserve rate cut, mortgage rates hit a 19-month low in September at 6.1 percent, bolstering sales into October. However, with stronger-than-expected economic data throughout October, rates continued their upward climb, crossing the seven percent threshold by the end of the month.
“The swift rise in rates created a ‘pause’ effect, amplifying the anticipated election-related paralysis among buyers in the latter half of the month,” commented Libby Levinson-Katz, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “As such, the data reflects a more optimistic picture of where the market currently stands.”
Closed home sales rose 2.35 percent to 3,443, likely due to the dip in rates in September, as homes that went into pending status the prior month closed in October. Sales volume followed with a 7.4 percent increase, while pending sales rose slightly by 1.07 percent. This uptick in activity brought months of inventory down from 3.6 to 3.18 months market-wide; however, median days in MLS continued to climb from 25 to 26 days.
Active listings decreased slightly by 1.57 percent due to the increase in pending and closed sales, as buyers absorbed some of the standing inventory. However, active listings are still 46.22 percent higher compared to last year, highlighting that there are simply more options, and it is taking longer to sell a home. Reflecting on election-related hesitation, new listings decreased by 7.16 percent as sellers delay listing until after the election cycle.
Once election results are finalized, historical data from the past three election cycles show buyers and sellers are likely to refocus on the real estate market. DMAR Market Trends Committee member Michelle Schwinghammer noted, “In the 11-county Denver metro area over the last three election cycles, we’ve seen more month-to-month home price volatility leading up to an election, followed by increased price stability and a return to traditional seasonal patterns post-election. Once results are in, buyers and sellers tend to return to business as usual.”
Continued Levinson-Katz, “Anecdotally, many Committee members reported an increase in sellers preparing to sell their homes in the new year. If the Federal Reserve does lower rates this month and again in December, we may be set on a path for a strong 2025 as conditions normalize and home prices stabilize post-election.”
Our monthly report also includes statistics and analyses in its supplemental markets that include properties sold for $1 million or greater, properties sold between $750,000 and $999,999 and properties sold between $500,000 and $749,999.
Activity in the $1 million+ market proved to be a big surprise in the form of an unanticipated buying spree in the attached market. Overall, sellers pulled back from putting their homes on the market, with a 20.45 percent reduction in new listings month-over-month. Nonetheless, this market is still seeing the highest inventory levels in years, giving buyers a lot of choices. At month’s end, there were 6,605 detached and 476 attached homes for sale at this price point. Higher priced homes, especially those over $2 million, faced significantly greater months of inventory due to a naturally smaller buyer pool: detached homes priced over $2 million faced 6.65 months of inventory in October, while attached homes priced between $1.5 million and $1.99 million had 17 months of inventory, with 7.6 months in the $2 million-plus segment.
“With this inventory surplus, buyers sensed an opportunity and entered the market,” commented Colleen Covell, DMAR Market Trends Committee member and Metro Denver Realtor®.
The attached market saw a dramatic 63.16 percent uptick in homes going under contract in October compared to September, while the detached market saw a 3.98 percent decrease in pending listings. This surge in attached homebuying is also reflected in the median days in MLS, which saw a dramatic 71.62 percent reduction, from 74 days in September to 21 days in October, in the attached market, while detached homes increased 21.74 percent. Likewise, the attached market saw a slight increase in the close-price-to-list-price ratio, up to 96.73 percent, while detached homes experienced a slight decrease, down to 97.56 percent. Perhaps the most dramatic metric reflecting this attached buying spree is the huge 15.41 percent monthly increase in the price per square foot to $644.
Highlights from October closed transactions include the highest-priced attached home at 2800 E. 2nd Avenue #302 in Cherry Creek, which sold for $6.5 million, and the highest detached sale at 2260 Meadow Avenue in Boulder, which sold for $10 million.
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