- High-end homes sales soared in 2012.
- Average price of luxury homes were stable.
- It’s not just low-end homes that are selling, like at the beginning of the housing crisis.
Independent real estate broker Gary Bauer drilled into the Denver area’s high-end home market in three ways: luxury homes priced at $1 million and above; Signature homes, priced at $750,000 to just under $1 million; and homes priced at $500,000 or more.
“They all showed basically the same trend,” Bauer said.
Last year, a total of 670 luxury single-family homes sold, a 33.5 percent increase from the 502 in 201. Step down to the Signature properties and there was a 33.8 percent jump, with 847 trading hands, compared with 633 in 2011. There were 3,922 home sales of at least $500,000, a 33.5 percent from the 2,937 in 2011.
Total dollar volume in each three price strata showed similar percentage gains. Bauer’s report is based on Metrolist data from the 11 counties of Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park. An earlier report by Kentwood Real Estate, which focuses on the core counties in the metro area and does not include Boulder, Gilpin or Park counties, showed a similar trend.
For the luxury market, total sales hit just over $1 billion, up 32.7 percent from the 763.2 million in 2011; buyers paid $718.5 million for Signature properties, a 34.4 percent jump from the $534.7 million in 2011; and the $500,000-plus market hit $3 billion, 33.7 percent more than the $2.3 billion in 2011.
December also was a strong month for high-end homes.
There were 60 sales of $1 million or more single-family homes in December, a 76.5 percent jump from the 34 in December of 2011.
December sales, in fact, bucked the usual seasonal month-to-month downturn.
There were five more luxury homes sales in November than in December.
Part of that reason, according to Bauer, is that many consumers wanted to close on home sales before the new year began.
Lenders, title insurance companies, appraisers and others worked long hours through the holiday season to close as many homes as they could in the final months of 2012, he and others said.
Overall, home prices were relatively flat in 2012 compared with 2011.
Typically, in any housing market downturn, the high-end homes are the first to fall and the last to recover.
“I would say that was true during this last cycle, with one exception,” Bauer said.
“I think more high-end homeowners did workouts with their lenders that allowed them to stay in their homes a little longer, maybe through a one-year leaseback program,” Bauer said. “Every situation is a little different.”
Buyers, however, last clearly were more interested in buying luxury homes than the had in the past two or three years, he said.
“There wasn’t a lot of price appreciation, but it shows how the market has shifted,” Bauer said.
He expects the high-end housing market to remain strong in 2013.
“From talking to other brokers, I think this trend will continue this year,” Bauer said. “I think as long the economy continues to show signs of improving, demand will remain strong.”
However, the biggest lesson from his trio of reports is showing how the market has shifted from the dark days of the housing crisis that began in late 2008.
“When the downturn started, it was only homes at the low-end that were selling,” Bauer said. “Now that people are convinced that the worst is over, we are seeing home sales increase at the higher price points, too.”
Also, there are not as many low-end homes available in the past. For example, in 2009 there were many homes on the market available below $100,000, but many of those have been snapped up by investors or owner-occupants. Increased demand for lower-priced homes has driven up their values.
As with the overall market, there increasingly is becoming a shortage of homes priced from $500,000 to more than $1 million, Bauer said.
“The high-end supply is falling,” he said.
Still, there are still seven-figure foreclosures and short sales on the market, he said.
“What 100 percent surprises is me is when I look at the distressed properties each month, there are still distressed homes priced in the $1 million range. It is just part of the ecosystem.”
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. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.