- Gary Bauer releases luxury home market.
- Luxury homes are priced at $1 million or more.
- YOY sales up 35%.
Denver-area luxury home sales rose by 35 percent in 2013 from 2012, according to a report by independent broker Gary Bauer.
And sales activity for single-family homes priced at $1 million or more jumped a whopping 80 percent last year from 2011, according to the analysis by Bauer.
“The luxury market has taken off,” Bauer said.
Last year, there were 903 sales of single-family homes priced at $1 million or more, compared with 670 in 2012 and 502 in 2011, Bauer’s report shows.
The dollar volume trend showed similar gains.
Last year, buyers paid $1.373 billion for luxury homes, while they paid $1.013 billion and $763 million, in 2012 and 2011, respectively.
In 2012, 76 condos sold for at least $1 million each, a 29 percent increase from the 59 in 2011. Sales volume last year was double the 38 in 2011.
Bauer’s report covers the 11 counties of Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park. His analysis is based on data from Metrolist.
The luxury market has undergone a sea change from the national collapse of the housing market that started in 2008.
Many formerly well-heeled people who bought a McMansion at the top of the market, found themselves under water. That is, their mortgage was worth more than the property.
“You don’t have to go back too many years and the advice was to do a workout arrangement where you would do a sale-leaseback for a year, so when you sold the home (for a loss) it was a taxable event,” and the owner could write-off the loss,” Bauer said.
In many cases, banks would later sell high-end foreclosed homes for a huge discount to the price paid at the top of the market.
Indeed, a number of real estate brokers say that some luxury homes even today would sell less than what some buyers paid at the peak of the market.
Bauer doesn’t know if the luxury market set a record last year, as the overall market did, as he only started tracking the high-end market in late 2010.
A number of homes that previously sold for $1 million or more, are now what Bauer calls Signature Properties – those selling from $750,000 to $999,999.
“The luxury market is one piece of the overall market,” Bauer said.
“The market initially recovered with a huge demand for the low-end of the housing market,” he said.
As homes priced below $100,000 were gobbled up and prices began to rise, they became far and few between.
“Then we started seeing the move-up houses starting to rise in value,” Bauer said.
The average price of a luxury home that sold last year was $1.52 million.
Bauer said he suspects there is still some softness with homes priced at $4 million, $5 million and up.
In any market, the more expensive the home, the fewer the buyers, of course.
“But the number are saying, anything less than $2 million is kind of the sweet spot.”
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