- Kentwood reports $36.8 million in luxury home sales in February.
- Luxury sales are up 7.4% from February 2012.
- Year-to-date, luxury sales are $10 million higher than in 2012.
On Sunday, Jim Rhye held an open home for a 9,825-square-foot priced at $2.195 million in Country Club.
More than 200 people came to see the six-bedroom, seven-bathroom home at 100 Gaylord St., which was designed by famed Denver architect Burnham Hoyt, who among other things designed such landmarks the amphitheater at Red Rocks and the State Capitol Annex building.
“It was amazing,” said Rhye, a broker with Kentwood City Properties. “You would have thought it was a home tour, not an open house.”
“To have more than 200 people to show up for an open house for a $2.2 million home is just incredible.”
While some people surely were there to simply gawk at the Tudor-style mansion, Rhye is finding that increasingly it it is not just “lookey-loos” but people eager to pull out their check books for seven-figure homes who are in the marketplace.
A report by Kentwood Real Estate released today backs up what Rhye and other brokers are seeing on the streets…as well as on the avenues, parkways and cul-de-sacs where expensive homes are found in the Denver area.
In February, buyers closed on 27 homes priced at $1 million or more in the core counties of Adams, Arapahoe, Broomfield, Denver, Douglas, Elbert and Jefferson counties, according to an analysis of Metrolist data by Kentwood. That is a 7.4 percent increase from the 23 sold in February 2012.
The single-family homes last month sold for a total of $37.84 million, a 6.9 percent increase from the $34.5 million a year earlier.
The average days on the market fell 7.1 percent to 249 from 260.
In the first two months of the year, well-heeled buyers paid $80 million for 57 luxury homes, compared with $70.3 million for 48 homes during the same period in 2012. That is a 19 percent increase in transactions and and a 14 percent increase in dollar volume.
Rhye said the report reflects what he is experiencing as a broker.
This is he best high-end market he has seen in his nine years in the business.
“The luxury market has really taken off,” Rhye said. “I sold $14 million in homes last year and that was a pretty good year for me. This year, year-to-date I have already done $6.5 million, which is combined closings and what is in production. That is pretty incredible to be almost half way where I was in all of 2012 this early in the year.”
Rhye is focusing on selling high-end homes.
“The bulk of what I do is where you find the seven-figure homes, in places like central and southeast Denver. I sell homes in places like Country Club and Cherry Creek and Belcaro. I don’t do much in the suburbs.”
What he has found that prices are up 10 percent to 15 percent from where they would have been priced a year or two earlier.
“You are getting less for the money,” Rhye said. “Today, for $1.5 million you will probably get around a 3,000-square-foot home in Country Club that might need a little bit of work.”
He said that he hopes that prices don’t continue to rise at such a rapid clip.
“What I am really hoping is that prices stabilize,” Rhye said.
Still, in some cases high-end homes still are priced below where they when the market had peaked in 2006 and 2007.
However, high-end house hunters don’t have much to choose from, so the demand is driving up prices at the high-end, just like it is at lower price points.
“There just isn’t much supply of high-end homes out there, which has really moved it from what was a buyer’s market to a bit of a seller’s market,” Rhye said.
Kentwood notes there are 499 active single-family homes priced at $1 million or more on the market and 107, or 21.4 percent of them, are under contract.
There are 38 luxury condos on the market, six of which are under contract.
Rhye said that buyer’s appetite for homes is moving up the food chain.
“It started with low-end homes really on fire, than the homes priced under $400,000 were on fire, and now there is a hot market for anything at $1.5 million or under,” Rhye said.
“It would be nice to see activity start to pick up in the $2.5 million to $5 million range,” he said. “It’s still a bit softer at those higher price points.”
Buyers are taking advantage of still low jumbo rate mortgages for expensive homes, he said.
“The higher the price, the less important are rates,” Rhye said. “But with rates so low, some people who can afford to pay cash are getting mortgages, because they can make more money on the money they don’t put into their home.”
In some cases, well-heeled buyers will pay cash and then get a loan after closing.
“All cash is a great negotiating tool,” Rhye said. “I had one buyer who paid $3 million in cash for a home in Country Club and after it closed, he put a $2 million loan on it.”
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.