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Coldwell Banker: Record luxury home sales

Highlights:

  • Coldwell Banker releases luxury home report.
  • Luxury sales a record in 2013.
  • Salves volume tops $1.5 billion.
This Denver home sold in December for $4.375 million.

This Denver home sold in December for $4.375 million.

From the Boulder to Castle Rock, well-heeled buyers purchased a record number of luxury homes last year, according to a report released by Coldwell Banker Residential Brokerage.

Last year, buyers paid more than $1.5 billion for 1,010 homes priced at $1 million or more, according to Coldwell’s analysis of Multiple Listing Service data.

That is a 34.5 percent jump in the $1.14 billion in dollar volume in 2012 and a 33 percent increase in the 759 luxury homes purchased in 2012.

An earlier report by Kentwood Real Estate showed a similar trend, but fewer transactions and a smaller dollar total because it did not include Boulder.

“It is incredible,” said Chris Mygatt, president of Coldwell Banker Residential Brokerage in Colorado. “We have never seen this kind of frenzy in luxury home sale before. The strongest single market segment for 2013 was clearly the luxury home market, If you include sales of properties priced at over $500,000 – the top 10 percent of the market – we saw an increase of 44 percent year over year.”

Last year, buyers purchased 143 homes priced at $2 million or more.

“That is an average of more than 10 homes closing a month,” Mygatt said. “We never saw that kind of activity at the upper end before.”

Strong job market fuels sales

He said there are several factors driving the luxury housing market.

“First, it is jobs,” Mygatt said. “Colorado and Denver have very low unemployment rates. And we have brought a number of well-paying jobs to the market.”

The robust stock market also helped.

“Some people are feeling confident and comfortable enough to move some of their money from stocks into real estate,” Mygatt said. “Especially after a great year in the stock market like last year, some people thought it was a good idea to take some of their stocks off the table and use then money to buy their dream home.”

December also showed a year-over-year and a month-to-month increase.

There were 74 luxury home sales in December, up 15.6 percent from the 64 sales in December 2012. Sales last month also rose 12 percent from the 66 high-end homes that traded hands in November.’all homes sold for

The median sale price of a luxury home last month dipped to just under $1.34 million, down 4.5 percent from December 2012. However, the median price was slightly higher than in November, when stood at $1.325 million.

Other key market indicators were fairly positive last month.

Homes sold faster on average than the previous month and year ago levels and sellers received a slightly higher percentage of their asking price. But there were fewer sales over $2 million – eight last month compared to 13 in November.

Low inventory

Mygatt said he is expecting another strong year in Colorado’s luxury home market.

“We’re desperately in need of quality high-end properties in iconic neighborhoods that are priced sensibly,” he said. “Buyers have been frustrated by the lack of inventory of good, high-end homes along the Front Range.”

Mygatt said when Boulder and Larimer counties are included  “and, honestly, there aren’t that many million-homes in Larimer, but Boulder has quite a few,” there are only 674 homes on the market with at least seven-figure price tags, Mygatt said.

“Last year at this time, we had 860,” he said. “So demand is stronger, but we have 200 fewer homes to choose from.”

New homes to the rescue

He said luxury new home builders in 2014 will try to fill that gap.

“We are already seeing companies like Toll Brothers building more luxury homes,” Mygatt said. “And a number of luxury home builders that had been out of the market for four or five years are starting to return.”

In fact, some of those 674 homes that are available, “are homes that no one wants to buy,” Mygatt said. The luxury home buyer is the most discerning of any home buyer, he said, which bodes well for new homes.

“If someone is going to spend $1 million on a home, they aren’t going to settle,” Mygatt said. “Some people like to buy a home that has a state-of-the-art dishwasher that has never washed somebody else’s dishes or a top-of-the-line oven that has never been used. It is very appealing for some people to own a home that has never been lived in. They like being the first owner.”

Some key findings from this month’s Coldwell Banker Residential Brokerage luxury report:

  • The most expensive sale in the Denver metro area in December was a six-bedroom, four-bath approximately 10,000-square-foot home in Denver that sold for $4.375 million;
  • Denver boasted the most million-dollar sales with 24, followed by Boulder with 10 and Cherry Hills Village and Castle Rock with four;
  • Homes sold in an average of 112.6 days on the market, down from 157.1 days a year ago and 133.8 days in November;
  • And sellers received an average of 95.5 percent of their asking price, up from 94.2 percent a year ago and 95 percent the previous value in November.

Interested in buying 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.