Denver-area buyers snapped up 85 single-family “Signature” homes priced just below $1 million in July, almost a 20 percent increase from July 2011, according to a report by independent Realtor Gary Bauer.
Bauer defines a Signature home as one that is priced from $750,000 to $999,999. His analysis is based on Metrolist Inc. data and represents 11 counties – Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park.
“The biggest thing right now is that most of the Signature market homes were originally on the market between $1 million and $1.2 million,” Bauer said.
“I think buyers in that price range believe they are getting a good deal,” Bauer said. “Basically, they are getting $1 million and $1 million-plus homes for far less than that. You look at the average sold price last month and it was around $840,000, so they are in effect getting a home that may have sold for $1.2 million a few years ago for considerably less.”
July, however, wasn’t the banner month for Signature properties like in June, when 112 homes in that price range traded hands. The drop off may have been for seasonal reasons.
“In my opinion, the Signature properties are the most vulnerable to seasonal adjustments,” Bauer said.
Still, he knows firsthand that is a popular price range.
“Over last weekend, I was showing a couple who might be moving here from Denver homes and that was the price range they were looking at,” Bauer said. “There seems to be a fair amount of interest in this product group.”
In the first seven months of the year, buyers paid $419.7 million for 495 Signature single-family homes, compared with $324.5 million for 384 during the same time period last year. That is about a 29 percent increase in transactions and dollar volume.
The dollar volume increase was even more for condos, but the number of transactions were small.
Buyers paid $29.5 million for 35 Signature condos in the first seven months of the year, compared with $21.4 million for 25 in the first seven months of 2011. That is a 38 percent increase in dollar volume and a 40 percent increase in the number of sales.
In July, buyers purchased seven Signature condos, compared with only one in July 2011.
S. Robert August, a local housing consultant, wasn’t surprised of the pick-up in the Signature price range.
“There is a tremendous amount of pent-up demand,” August said. “For a long time, all of the activity was in the below $400,000 price range. That is now changing. Families continue to grow. People get married, people get divorced. People are getting tremendous deals. You can get a foreclosed home that previously on the market for $3 million for $1.2 million or $1 million and sometimes less.”
He also said that the historically low interest rates also are fueling higher-end sales.
“For some people, buying a $1 million home with today’s low interest rate is not that much different from people buying $300,000 homes in the past, when mortgage rates were so much higher,” August said.