The Denver-area million-dollar home market started the year on a strong note.
A report released today by the Kentwood Real Estate Co. shows that 39 homes in the Denver area closed in January, a 14.7 percent increase from the 34 in January 2011.
The dollar value was up almost 13 percent to $56. 2 million compared with $49.8 million a year earlier.
Although the number of sales isn’t huge, they are moving in the right direction, noted Carol Ihli, marketing director for Kentwood.
She said that it appears that people putting their luxury homes on the market are still asking too much money when they initially list them.
“The sellers are coming in about 10 percent to 17 percent too high,” Ihli said. “When they sell them, they typically are selling them from 10 percent to 12 percent below their asking price – otherwise they just sit there.”
Let’s make a deal
Despite the disconnect between the buyers and the sellers, deals are being made.
“The buyers and sellers are getting together,” she said. “It appears on the part of buyers there is starting to be some sense of urgency. They are afraid that new inventory is not going to be hitting the market anytime soon. There is a sense that a lot of people in this price range are not going to put their homes on the market until after the Presidential election.”
Ihli said that the “core” neighborhoods of Denver, from Hilltop to Highland, continue to be stronger than suburban enclaves, such as Cherry Hills Village and Castle Pines.
“I also think Cherry Creek is really beginning to pop,” she said.
Indeed it is, according to Kentwood broker Rollie Jordan. Jordan closed $7.75 million in deals in Cherry Creek in December and has closed another expensive home in January.
“I think Cherry Creek has definitely come back,” Jordan said.
The $7.75 million tally includes a 12,000-square-foot lot for $1.65 million. “It wasn’t on the market,” but Jordan contacted the owner and got him a deal he couldn’t refuse. “It was the last big corner lot in Cherry Creek.” The buyer was not a developer or builder, but someone who is going to construct a home on the lot for his own use. It probably will be “7,000 to 8,000 square feet and real high quality,” Jordan said.
So far this year, she also has closed a duplex in Cherry Creek for $1.25 million and has a single-family home in the area under contract for just over $1.5 million.
Many of her buyers are in the gas and oil energy. “All my buyers are coming from Houston. I think they are here because of the fracking.” Fracking, slang for hydraulic fracturing, allows oil and gas to be extracted from rock formations by injecting fluids into cracks.
She currently is working with three clients relocating from Houston, many of them interested in living in Cherry Creek or the Denver Country Club.
Ihli said the high-end market, as with the overall market, is facing a dwindling inventory.
There currently are 520 homes for sale in that lofty price range. Of those, 63 are under contract or pending, she said. Some of the pending homes are short sales, in which the lender accepts less than the mortgage.
In January, the average price of a luxury home closed was $1.44 million, down 1.5 percent from the $1.46 million in January 2011. The highest price that sold in January was $2.56 compared with $4.8 million in January 2011, a 46.6 percent drop. The Kentwood report includes the counties of Adams, Arapahoe, Denver, Douglas and Jefferson.
Contact John Rebchook at JRCHOOK@gmail.com