If real estate is a supply and demand game, then the most consequential day of the year is December 31.
That's because a majority of listing agreements taken during the second half of the year have an expiration date of December 31. And a lot of properties didn't sell during the second half of 2024, which means we are ripe for a reset.
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Because the market has been so sluggish, active listings were elevated throughout the year, including five consecutive months (July, July, August, September and October) where there were more than 10,000 homes for sale. For most of 2024, active inventory was 40% - 70% higher than in 2023.
So what this giant purge really means is that the deadwood in our market has been cleared out. The overpriced listings, unmotivated sellers and stale real estate is gone. What you have to start the new year is a significantly smaller, better pool of homes for sale... at a time when buyers traditionally come back in much larger numbers.
There are still 6,400 homes on the market... that's well above the 4,600 we had to start 2023 and 2024 and way above the zero-inventory days of the pandemic era, when we had just 2,500 active listings in 2021 and 1,400 active listings to start 2022.
So it doesn't automatically shift the pricing dynamics or guarantee frenzied bidding wars. But what it does mean is that the market just became a whole lot leaner and more efficient, with fewer listings and more buyers. It's a much better environment for sellers while most buyers won't have near the same leverage on things like seller concessions and inspection requests.
From now until mid-May, the Denver housing market will suddenly look and feel a whole lot healthier. At least until we see more sellers streaming back into the market in late spring when the school year comes to an end.
