Luxury home market hot

This townhome at 480 Cook St., with 10,120 square feet, sold last month for $2.3 million. The buyers are originally from Iceland.

Well-heeled buyers snapped up 91 single-family homes priced at $1 million or more in the Denver area in June, almost 38 percent more than the 66 homes purchased in that price range in June 2011, shows a report released today by independent real estate broker Gary Bauer. Buyers also purchased seven condos priced at $1 million or more last month, compared with four in June 2011 and three in May.

An earlier report by Kentwood Real Estate showed a similar trend. Kentwood’s report includes the “core” Denver-area counties of Adams, Arapahoe, Broomfield, Denver, Douglas, Elbert and Jefferson counties. Bauer’s report also includes Boulder, Gilpin and Park counties. Both reports use data from Metrolist.

The June tally was the best since Bauer began tracking the luxury market in 2009, both in transaction and dollar volume. Buyers paid a total of $128.8 million for the single-family homes in June, a 31 percent jump from $99.2 million in June 2011. Sales volume in June also rose 26 percent from $102.9 million in May.

“The luxury market is hot – dynamite hot, just like the overall market,” Bauer said.

The high-end market has been the hardest hit and the slowest to recover, but that changed last month. Bauer said most of the sales action has been between the $1 million and $1.5 million mark.

“It is just a very positive market,” Bauer said, although other observers warned sales at the high-end may not continue to rise. “The inventory for luxury single-family homes is up a bit from May (to 766 from 683),” Bauer noted. However, it is down 19 percent from June 2011, when it stood at 946.

While during the past few years much of the high-end action took place in Denver neighborhoods such as Hilltop, Country Club and Polo Club, many of the high-end sales last month took place in the suburbs.

Arapahoe County had the most sales at 24, followed by Boulder with 23, 22 in Denver, 12 in Douglas, eight in Jefferson and one each in Clear Creek and Elbert.

“It’s amazing how the sales have moved around geographically,” Bauer said. “The counties I would watch are Arapahoe and Douglas. For example, Blockbuster has been quietly bringing in about 15 executives to its Douglas County office. These people are coming from Dallas, so they would be accustomed to the more traditional home on a bigger lot, not the inner-city living. They would most likely want to be near their headquarters and live in the suburbs.”

Last year, locally based Dish Network bought Blockbuster.

The luxury sales market in June was the best month in a number of years in the Denver area, said Edie Marks, a broker with Kentwood.

“The activity is amazing,” Marks said. “Between showings picking up significantly and putting homes under contract in June, it was a very good month. We will see a lot of closings in July, too.”

Marks said the luxury market activity is being sparked by a number of factors.

“It is a perfect storm,” Marks said. “Interest rates are low and prices are down and people do not want to put their money in the stock market, because it is not safe. They figure they might as well enjoy their money and live in their investment.”

She also agreed that the suburbs, largely shunned by high-end buyers, are showing a resurgence.

“I’ve sold homes recently in Cherry Hills Village and Greenwood Village, and even a place east of Arapahoe Road,” she said. “That was a horse property on 4.6 acres in Centennial.” She sold it for just under $1.9 million, although it had previously been listed for as much as $3 million.

“It really is a $3 million property,” Marks said. “The seller took a substantial loss, and the buyer got a fantastic deal.”

Will the high-end sales frenzy last?

“You tell me, John,” Marks replied. “Let’s just enjoy the moment.”

Bauer also released a separate report on what he calls “Signature” properties, those priced from $750,000 to just under $1 million, showed an even bigger jump. Some 112 homes in that sub-million dollar price range closed last month, a 36.6 percent increase from the 82 in June 2011 and a 21.4 percent increase from 92 in May. The total dollar volume last month was $94.8 million 36.8 percent increase from the $69.3 million a year earlier and 20.3 percent higher than the $78.8 million in May.

“These are homes that a year or two ago would have been on the market for $1 million or above,” Bauer said. “Everything I said about the luxury market also applies to Signature properties.”

Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate.com.

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