The residential real estate market in central Denver is mirroring the trends seen before the pandemic. The accompanying graph illustrates the number of homes sold and listed for sale between January and the end of April of the last seven years.
Following the pandemic, the real estate market experienced a significant shift. A surge in buyer demand was met with a scarcity of inventory. The number of homes for sale, measured on the last day of the month, was notably lower than the total monthly number sold in 2021 and 2022. This was largely due to properties being sold within the same month of listing, a trend influenced by low borrowing costs and evolving homeowner preferences.
By the latter half of 2022, the market entered its usual seasonal slowdown as the Federal Reserve started raising interest rates. By 2023, the heightened rates dampened market activity, leading to a 37% decline in sales compared to the previous year.
Despite the downturn in the number of sales in 2023, with only 518 central Denver transactions recorded in the first four months, the market has shown resilience. In 2024, there has been a rebound with 654 sales, and the availability ratio has returned to similar levels before the pandemic. Sales are only 9% lower than in 2019, a significant recovery considering the current interest rates of 7.25% compared to 4%.
The rolling 12-month median price has stabilized at $900,000 for the past seven months, marking the most prolonged period of steady prices historically observed in this market. While buyers have adjusted to higher interest rates, the fervor seen in 2021 and 2022 has significantly subsided. We expect this year to continue with little drama or the significant appreciation seen in previous years.