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Kentwood: Luxury home sales soar

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Highlights:

  • Kentwood Real Estate releases luxury housing report.
  • Sales up 23.6% from a year ago, 50.8 percent from May.
  • Zillow ranks Denver 3rd best for negative equity with jumbo loan holders.
This 9,584-square-foot home with 5 bedrooms and 5.5 bathrooms, sold for $3.2 million in June.

This 9,584-square-foot home with 5 bedrooms and 5.5 bathrooms, sold for $3.2 million in June.

Luxury home sales in the Denver area soared in June, according to a report by Kentwood Real Estate.

 

The report showed that 89 single-family homes priced at $1 million or more closed last month, a 23.6 percent jump from the 72 in June 2012.

Sales of luxury homes were up a whopping 50.8 percent in May, when 59 seven-figure homes traded hands.

By contrast, the entire market showed a 13.5 percent jump in closings in June from June 2012.

“We are seeing a lot of homes under $2.5 million going fast and often at full price or even more,” said Rollie Jordan, a broker with Kentwood-Cherry Creek.

She recently had a bidding war on a home in Bonnie Brae priced at $1.5 million, which sold for slightly more than the asking price.

“And I thought I had it priced a little on the high side, to leave a little room for negotiations,” Jordan said.

Jordan also recently sold a home in Cherry Creek North for $2 million, close to its asking price.

The Kentwood report, which covers the “core” Denver-area counties of Adams, Arapahoe, Broomfield, Denver, Douglas, Elbert and Jefferson, showed than in the first half of the year, buyers paid $499.1 million for single-family homes priced at $1 million or above, a 37.9 percent from the $361.91 million in the first six months of 2012.

So far, well-heeled buyers have snapped up 331 luxury homes a 38.5 percent increase from the 239 in the first half of 2012.

For homes priced at $3 million or more, there are fewer showings and less demand, although Jordan is starting to see more interest in that price range, too.

“All my buyers could afford to pay cash, but most of them are putting mortgages on it, because money is still so cheap by historical standards and they can write it off,” she said.

Kentwood’s report, based on Metrolist data, shows that 40.5 percent of the listings between $1.25 million and $1.5 million are under contract and 27.5 percent of the home price from $1 million to $1.25 million are under contract.

Rollie Jordan

Rollie Jordan

By contrast, only 8 percent of the homes priced at $5 million or more are under contract.

Meanwhile, Denver-area homeowners with jumbo loans, those of $417,000 or more, rank as the third lowest in the nation as far as being underwater on their loans, according to a report by Zillow.

The first-quarter report shows that only 6.5 percent of the homes with jumbo loans have negative equity in the Denver area, down from 17.2 percent in the first quarter of 2012.

Only San Jose with 5.8 percent and Boston, with 6.3 percent, respectively, are doing better. The U.S. average was 20.6 percent in the first quarter, compared with 32.9 percent a year earlier.

“I think it is just because the market is so strong,” Jordan said.

“If you have a listing in the $500,000 or $600,000 range in Washington Park, Highland, Bonnie Brae or some other desirable neighborhood, it’s not unusual to have 10 offers,” she said.

Also, the high-end foreclosures and short sales of a few years ago, during the worst of the real estate crisis, have all but disappeared, she said.

On the other hand, there are still people who bought homes at the peak of the market who still owe more than their mortgages.

“I still have clients who are upside down,” Jordan said.

One of them owns a home in Cherry Hills Village that he could sell for $1.5 million, but he has far more than that into it.

“In that case, we are renting it,” Jordan said. “He gets $7,000 per month and that covers his first and second.”

He is living in another house he owns in another state, she said.

“He is going to continue to rent it until he can get the price for he wants for it,” she said.

And he had no problem getting someone to rent it.

“There is so little inventory out there, that the day I put the ad in Craigslist to rent it, I received three offers,” Jordan said.

In the market for a luxury home? Please visit COhomefinder.com.

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.