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Kentwood: Luxury home sales up 28.6%

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Highlights:

  • Kentwood Real Estate releases August luxury home report.
  • YTD, luxury sales hit $731.4 million.
  • Rising rates less of an issue for high-end home buyers.
Jim Rhye sold this home for $3.5 million.

Jim Rhye sold this home for $3.5 million.

Jim Rhye sold a home last month in six hours for the full asking price.

Here is the kicker. The house was priced at $3.5 million. The buyer paid cash.

“So far this year, I have sold 11, seven-figure sides,” said Rhye, a broker with Kentwood City Properties.

“That’s a lot.”

Indeed, a lot of luxury homes have been trading homes this year.

Luxury home sales in the Denver area rose by 28.6 percent in August from August 2012, according to a report released by Kentwood Real Estate.

The report, based on Metrolist data, showed the sale of homes priced at $1 million or more last month, outpaced the overall market, which showed a 20.3 percent year-over-year increase in closings.

Buyers bought 63 luxury homes in August in the counties of Adams, Arapahoe, Broomfield, Denver, Douglas, Elbert and Jefferson counties, according to Kentwood’s analysis.

In August 2012, buyers purchased 49 homes.

The dollar volume rose by 30.9 percent to $92.96 million last month, compared with $71 million in August 2012.

In the first eight months of the year, buyers paid $731.4 million for single-family luxury homes, a 41.7 percent increase from the $516.1 million in total volume during the same period in 2012.

Year-to-date, there have been 483 luxury home sales this year, a 42.1 percent increase from the 340 in the first eight months of last year.

Rhye, who specializes in high-end Denver markets such as Country Club and the 7th Avenue Historic District, has outperformed the market.

“Year-to-date, I am 50 percent over what I did in all of last year,” Rhye said.

The $3.5 million home in Country Club was his most expensive sale this year.

“We had four showing and the second person who looked at it made an offer at 5 p.m. and the seller accepted it at 7 p.m.,” Rhye said. The buyer is an oil man moving from the suburbs.

The sale price equated to $860 per square foot.

“The home only has about 4,000 square feet above ground,” Rhye said. “But it has such a premier location. I call it beachfront property.”

The new owner, he said, is going to remodel it.

“It is funny. People who pay this kind of money for a home want to put their own mark on it,” Rhye said.

High-end buyer profiles

A frequently asked question is: who are these people who have the kind of money to buy homes priced at $1 million or more?

“They’re all over the board,” Rhye said.

“I’ve had empty nesters who are moving from the suburbs, as well as people who already live in the neighborhood and want to upgrade,” he said.

“There are also people relocating here from other states.”

Rhye doesn’t sell many homes at the lower price range, “which I know has been slowing because of rising interest rates. At the upper-end, they are less effected by the interest rates. Five of my sales have been all-cash. They were all seven-figure homes.”

Rhye also recently sold a home for more than $2 million that had been languishing on the market for four years.

“You know, we have gone though a dead period, when nothing was selling, a peak period, when it was just crazy with multiple offers, and I think now we may be entering a stable period,” Rhye said.

He said it is “not a good thing,” when it takes four years to sell a home “and frankly, it’s probably not a good thing when you sell a seven-figure home in one day. Let’s hope that we are heading into a stable period, where supply and demand are more in balance.”

However, for the hot, high-end areas that Rhye specializes in, demand may continue to outstrip supply for a while.

“There just isn’t much inventory,” he said.

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.