The luxury housing market in the Denver area bounced back in May, with 50 sales of $1 million or more, a 31.6 percent jump from May 2011, according to a report by the Kentwood Real Estate Co.
The dollar volume last month showed a similar percentage increase, hitting $71.5 million from $54.4 million in May 2011. The most expensive home sold last month fetched $3.6 million, 18 percent higher than the most expensive home in May 2011, which sold for $3.05 million. The average days on the market in May for a luxury home was 252, down 20.5 percent from 317 days a year earlier.
The increase came after a downturn in April, when sales showed a year-over-year drop of 44 percent.
Year-to-date, buyers in Adams, Arapahoe, Broomfield, Denver, Douglas, Elbert and Jefferson counties have purchased 160 million dollar-plus properties, compared with 152 in the first five months of 2011.
Dollar volume through May, rose 10 percent to $242.3 million from $220.2 million during the same period last year. Kentwood bases its report on Metrolist data.
Edie Marks, a veteran top broker at Kentwood, said the high-end market is booming because there are so many deals available.
Marks busy as a bee
“It is amazing,” Marks said, who is known for sporting her trademark bee-shaped jewelry and certainly is as busy this spring season as the honey-gathering insect that Marks likes to say aerodynamically shouldn’t be able to fly, but does.
“This has been the busiest market I can remember since 1978.”
However, the price is being paid by sellers – whether they are owner-occupants who are underwater or banks that have repossessed the homes.
“The reason the (high-end) market is so strong is because the sellers are losing money,” Marks said. “The market is still pretty fragile. If people who are behind the curve want to sell their homes, they know they have to offer great deals.”
She said some homes that had been priced at $4 million, are now selling at $2.5 million.
“You can watch the progression,” Marks said. “It’s put on the market at $4 million, knocked down to $3 million, $2.7 million and finally it closes at $2.5 million.”
The strongest high-end markets are those near downtown Denver, such as Hilltop and Cherry Creek North, while the ones taking the biggest hits are in the suburbs, she and others have noted.
Most high-end homes are selling for below replacement cost, Marks said. And some homes that fetched $2.5 million a few months ago, could now be sold for $2.7 million, she said.
There is a shortage of high-end inventory, just like there is a dearth of homes for the overall market, she said.
“People don’t want to sell in the market if they don’t have to,” Marks said.
Increasingly, builders are strategically are trying to take advantage of the low supply of mansions, she said.
A number of builders have homes on the drawing board on key sites in places such as Buell Mansion, for the high-end buyer who can’t find their dream home.
“Some custom builders are ready to pull the trigger,” Marks said. “But they don’t want to build spec homes. They want to have a buyer in hand.”
So far this year, Marks has sold more than $26 million in homes.
“Last year, I was No. 2 with the Denver (Metro Association) of Realtors with $30.5 million.”
Have news story or a real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee Co. and 8z Real Estate. To see what luxury homes are on the market, please visit: COhomefinder.com
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