John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... Good time to buy a mansion? Take a poll at the end of this blog.
The Denver-area luxury home market showed signs of life in September, according to two separate reports released today.
Reports released by independent Realtor Gary Bauer, and Coldwell Banker Residential Brokers, both showed gains in homes that sold for at least $1 million last month.
Although the numbers in the respective reports were slightly different, they both similar trends. In August, by contrast, luxury home sales slumped from both July and August 2010.
Bauer’s report showed a total of 47 homes – 42 of them single-family homes and five condos – with seven-figure price tags closing last month, while Coldwell Banker’s showed 50.
The total dollar volume was $70.4 million in September, compared with $67.5 million in August and $63.2 million in September 2009, according to Bauer.
In the first three quarters of this year, sales volume for luxury homes totaled $608 million for single-family homes, up 1 percent from $600 million for the first nine months of 2010, Bauer’s analysis showed.
The number of homes sold was up 3 percent to 395 vs 385.
For condos, sales volume in the first three quarters soared 36 percent to $45 million from $33 million during the same period in 2010.
“I’m very happy,” with the September numbers and the year-to-date totals, Bauer said. “September was a good month. It is always nice to end the traditional selling season on a strong note.”
Although the inventory of $1 million-plus homes has shrunk dramatically from a year ago, there are still too many on the market, given the demand, Bauer said.
Still too many high-end homes?
“The big issue I continue to hear from talking to other brokers is that we still have an excess of inventory,” Bauer said.
There is too much competition for high-end homes, especially in some markets like the Cherry Hills area, even though the single-family home inventory of 799 homes is down 32 percent from the 1,175 on the market in September 2010. Indeed, the supply of $1 million-plus homes is down 13.2 percent from August, when there were 91 homes on the market.
Steve Blank, of Fuller Sotheby’s International Realty, however, likes that trend.
“The old law of supply and demand would state that if the supply is down 32 percent and sales activity seems to be about the same, it mean prices will start to go up,” Blank said.
Bauer, Blank and others said that one reason that sales have picked up is because sellers at the high-end have been aggressively slashing prices.
For example, Dean Singleton, publisher of the Denver Post, on Oct. 7 cut the price of his estate in Cherry Hills Village another $200,000 to $2.5 million, according to Metrolist. The 12,725-square-foot home on 2.3 acres had been listed for $2.9 million early in the year, before the price was dropped to $2.7 million in July.
Singleton, who bought a penthouse in downtown Denver, first priced his home at $6.5 million in about 2006.
Tom Cryer, a broker with the Kentwood Co., said 30 percent drop in prices at the high-end are typical, and even 50 percent drops in areas such as Cherry Hills are becoming more common.
“I think buyers are taking a very hard look at the new price paradigms,” at the top of the market, said Tom Cryer, of the Kentwood Co. “There are some very nice looking opportunities out there. There are always the haves and the have-nots, and if the haves find something extremely attractive, they buy it. Every buyer wants value and every buyer defines value in a different way.”
Yesterday’s $1 million home today’s $800,000 home – if the seller is lucky
Indeed, Cryer said he thinks the reports under-estimate the number of “million-dollar” homes being sold.
“I think there are lot more million-dollar homes being sold that the numbers shows, only they’re selling for $600,000, $700,000 or $800,000, if you follow what I’m saying,” Cryer said.
This Littleton home is on the market for just under $3 million.
For example, he recently sold a home in Castle Pines Village for just under $800,000 that not too long ago had been listed at $1.1 million, a 27 percent drop.
Bauer said that the economic development good news this week – that Arrow Electronics is moving its global headquarters to the Denver area and General Electric is building a $600 million solar factory in Aurora, could give the high-end home market a bit of a boost in the coming years.
“Together, they might generate the sale of another 30 homes in this price range,” Bauer said. “They probably won’t be a huge impact on the luxury market, but that’s 30 high-end home sales we wouldn’t have otherwise had.”
In addition, other companies that could follow these operations to Denver – especially with Arrow – could generate more home buying.
Cryer already knows one woman who plans to buy a home because of the GE deal, although it will be much more modestly priced in the $200,000s.
Meanwhile, Coldwell Banker’s report showed 36 homes sold of $1 million or more in September 2010 and 53 in August. The median sales price was just under $1.4 million last month, according to Coldwell Banker, A total of 50 homes changed hands for more than $1 million last month, up from just 36 last September but down slightly from the 53 sales this August. The median sale price was $1.34 million last month, while Bauer’s report put it at $1.42 million.
Myatt: Foreign buyers lured by Denver’s proximity to mountains
One of the reasons for the jump in luxury home sales so far this year is strong interest from international buyers seeking a second home that is close to skiing and other mountain recreational activities, said Chris Mygatt, president of Coldwell Banker Residential Brokerage in Colorado.
“Denver and the surrounding area are attracting lots of attention from second home buyers who want to enjoy all the activities that this metropolitan area has to offer while still being in close proximity to Rocky Mountain ski resorts,” he said. “Investors are taking advantage of the extremely affordable home prices and the historically low interest rates available right now.”
Mygatt said there’s reason to be optimistic about the future of the Denver luxury market. “No one knows for sure what the immediate future holds, but if you intend to stay in your home for a number of years now really is a great time to buy,” he said.
Some key findings from this month’s Coldwell Banker Residential Brokerage luxury report:
- The most expensive sale in the Denver Metro Area last month was a four-bedroom, seven-bath 9,694-square-foot home in Denver that sold for $3.8 million.
- Denver boasted the most million-dollar sales with 17, followed by Boulder with seven, and Cherry Hills Village with five. (Bauer’s report put it at 12 single-family homes in Denver, nine in Douglas County, eight in each Boulder and Arapahoe counties and two in Adams County.)
- Homes sold in average of 202 days, up from 150 days the previous month and 157 days a year ago;
- Sellers on average received 91.7 percent of their asking price compared to 92.4 percent the previous month and 91.6 percent from September 2010.
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YES, if you the seller get the low, low price you want.
BUYER, not seller.
Too early in the morning.
How abut a commenting system that allows edits?
“One of the reasons for the jump in luxury home sales so far this year is strong interest from international buyers seeking a second home that is close to skiing and other mountain recreational activities, said Chris Mygatt, president of Coldwell Banker Residential Brokerage in Colorado.” Really!? Wouldn’t we all like to see the stats on that comment?