This 10,618-square-foot home with 6 bedrooms and 9 baths on 2.28 acres in Cherry Hills, in August sold for $2.65 million.
The Denver-area high-end housing market took a breather in August.
“And then some,” said independent broker Gary Bauer, who today released a report analyzing sales of homes last month that cost at least $1 million each.
On Wednesday, Coldwell Banker Residential released its own luxury housing report that showed the same trend as Bauer’s report, but a different numbers of sales.
“It’s the trend that is important, not the data points,” Bauer said.
Bauer’s report, using Metrolist information, found there were a total of 45 luxury single-family homes and condos that closed last month, down 23.7 percent from the 59 in August 2010.
The total dollar volume for luxury homes last month was $67.6 million, down 21.5 percent from the $86.08 million in sales in August 2010.
On a month-to-month basis, August fared even poorer. There were 39 sales in single-family homes in August, a 44.2 percent drop from the 63 in July. August’s dollar volume of $59.7 million fell 44.2 percent from $107 million in July.
Also, the sale of luxury single-family homes last month accounted for 4.2 percent of the supply of 921 homes in that nose-bleed price range, while sales accounted for 6.9 percent and 4.5 percent of the inventory of luxury homes in July and August 2010, respectively.
As for luxury condos, the number of sales and the inventory are both smaller than for single-family homes. The six condo sales sales last month accounted for 6.5 percent of the 92 homes priced on that market. A year earlier, the four condo sales accounted for only 3.4 percent of the 188 units on the market priced at $1 million or more. Five of the condo sales last month were in Denver and one was in Boulder County.
Bauer said that one reason that the condo market may be better by that measure is because as baby boomers down-size and move into expensive downtown Denver condos, those individual sales can make a big impact on percentage changes, because so few units trade hands. For example, only one luxury condo sold in July.
As far as single-family home sales, last month 12 were in Denver; 10 in Boulder County; seven in Arapahoe County; five were in Jefferson County; four were in Douglas County; and one was in Broomfield. The most expensive home sold for $3.5 million.
On the sidelines
Edie Marks, a broker with the Kentwood Co. who sells a lot of expensive homes, said that a lot of prospective, qualified high-end buyers remain on the sidelines, even though showing activity remains strong.
“Even people who say they are going to write contracts on homes are not following through,” Marks said. “That is new. A guy walks through a home and says this is exactly what he is looking for, and he will be writing a contract within five days, and then…nothing.”
Marks said she thinks it is a lack of consumer confidence.
“People are afraid to pull the trigger,” Marks said. “People are more clued-in to what is happening with the political climate than any other time in my life. They hear what is happening. There is talk about eliminating the mortgage deduction again, and this time, people fear it could happen. If they limited it to $500,000 (as some have recommended) it will affect the market somewhat. But more than anything, people just don’t know what is going to happen.”
On the other hand, the stock market volatility could end up being a friend of high-end Realtors like Marks.
“For the 400th time, people are telling me they are getting tired of riding the stock market up and down,” and they think that a high-end home might be an investment that will provide them with more peace of mind, she said.
For his part, Bauer doesn’t think the August numbers spell doom-and-gloom for the high-end market.
“It was so active early in the year that people are going to take a little while longer, and sellers are going to spend a little more time doing their marketing. I think it was a small, monthly blip,” Bauer said. “Now, you can ask me next month if we have another blip, if I am starting to see a trend. But right now, I don’t think the slowdown in August signals a trend.”
Contact John Rebchook at JRCHOOK@gmail.com
I love Edie; she’s a great agent, and a nice person. And I know she is very political. But I don’t buy the confidence argument within the wealthy or elite buyer classification. This is a demand issue in my view. Not just a demand for housing, but a demand for all types of products and services, which in its entirety affect housing. Demand is dissolving because there are too few dollars chasing excessive inventory. Conservative commentary wants to create a political issue here, but it’s an economic issue—plain and simple. There is more confidence now and more economic growth now than there was after the Lehman crash. Yes, we have global economic issues to consider, and that macro economic horizon looks pretty bleak right now. But that’s the economy, not politics. I remember reading about Edie’s enthusiasm in this publication when she anticipated a new Republican majority would heal all of our economic problems. Well, as history has shown, this is not as politically driven as it is market driven. Have patience and be more scholarly. If we want to bring the political environment into this conversation we must consider the current economic and the potential future economic austerity issues we face, and then bring that card into play. Interestingly, this is a roadblock that the GOP has created. My comment on that issue is not political, but rationally based upon historical economic empirical data. Both political parties seem to hold partisan issues above the nation’s best interest. It’s up to us to make this work. We’re on our own now, and we can create economic growth with diligence, creativity, and hard work. The bottom line is we must no longer worry that our political “team” wins, because they don’t see us as team members unless we give them money. We need to work hard and ride out the storm—which might be a pretty long storm. We’ve seen this happen before and we overcame the roadblocks. But we accomplished it by working together. Screw the political parties. They have very little power to cure this issue.