Luxury home sales in the Denver area are stalling, even as prices drop, according to a report released today.
In October, sales of homes priced at more than $1 million were down 15 percent and the median sales price of luxury homes were down 8.5 percent from October 2008, according to Coldwell Banker Residential Brokerage.
A total of 44 homes sold for more than $1 million in the metro area during October, down from 52 in October 2008 and 46 in September 2009. The $1.22 million median sale price was off 8.5 percent from the previous year’s level and 16.5 percent from September’s price of $1.47 million.
It also took longer to sell them. It took 130 days to sell a million-dollar home, up from 124 days the previous month and just 84 days a year ago. Sellers received approximately 88 percent of their average asking price, up from 87 percent in September but down from 92 percent in October 2008.
“The high-end market continues to try to find its footing as much of the activity in housing is still in the entry-level market,” said Chris Mygatt, president of Coldwell Banker Residential Brokerage in Colorado. “Distressed property sales and the first-time home buyer tax credit have kept the mix of sales at the lower-price ranges in many areas.”
Mygatt said that market recoveries typically begin at the entry level and then work their way up to the move-up and high-end market.
“This is a process that we have to go through in any turnaround, and there will be fits and starts along the way,” he said. “But I’m encouraged that we’re moving in the right direction with the overall housing market.”
The recent extension and expansion of the home buyers’ tax credit by Congress should serve to benefit all segments of the housing market, Mygatt said
Many current homeowners who have owned their property for at least five years will receive tax credits of up to $6,500 if they buy a new home. First-time homebuyers will continue to get tax credits of up to $8,000. Both groups must purchase and close escrow by June 30.
“The current homebuyer tax credit has had a very real and positive impact on the housing market this year, and we’re pleased that Congress and President Obama saw fit to expand benefits to many existing homeowners as well,” Mygatt said. “This move can only help the overall market regain its footing at a critical time.”
The Denver metro area’s overall housing market saw sales rise 2.9 percent in October from the previous month, according to MetroList. However, sales were off 7.6 percent from the previous year. One encouraging indicator was that inventory of homes for sale continued to drop with unsold homes on the market down 22 percent from year-ago levels.
Some key findings from this month’s Coldwell Banker Residential Brokerage luxury report:
* The most expensive sale in the region in October was a three-bedroom, three-bath home in Boulder that sold for $2.4 million.* Denver boasted the most million-dollar sales in October with 11, followed by Boulder with eight;
* It took an average of 130 days to sell a million-dollar home in the region, up from 124 the previous month and 84 days a year ago.
* Homes sold for an average price of $1,368,553 or nearly 88 percent of their average asking price compared to 87 percent the previous month and 92 percent a year ago.
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.
When I have researched individual transactions I find major differences between the "days on market" posted on the "Sold" page and the actual number of days that the home was offered for sale. I rather suspect that the 130/124 DOM numbers do not reflect the "whole" truth. That may also be true of the 88-87-92 % of asking price. I always go back to the original asking price, not the asking price at the time the offer is accepted.
I agree with you, Russ. Although I am told the days on the market listed is better than it was in the past, I do think if sellers change listing agents or interrupt the original listing for some reason, the DOM does not reflect the entire time the owner was trying to sell it. And then, as you alluded to, if a person is re-listing the home, they almost certainly have lowered the price. Now, I can't fault Coldwell Banker for using the information available to them, but I would take that with a grain of salt. That is why when I get the MLS data each month, I seldom address the days on market or the percentage of the asking price.
John, The Boulder MLS (IRES) does calculate the total DOM even if the house is relisted with a different agent or office. Thus Boulder area DOM is much more accurate than in other areas.
Thank you, David. I've been told in the past that Summit County also counts DOM in that way. I remember in the late '90s a broker in Summit County teasing me that their DOM stats actually meant something, unlike his brother-and sister-Realtors in the Denver area.