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Kentwood: Luxury home sales soar in May

Highlights:

  • Kentwood Real Estate releases May luxury home report.
  • Sales of homes rise 44%
  • Condo sales soar 67%

 

This 12,808-square-foot, 6-bedroom, 6-bathroom home in Denver sold last month for $4.8 million.

This 12,808-square-foot, 6-bedroom, 6-bathroom home in Denver sold last month for $4.8 million.

Luxury home sales in the Denver area soared in May, shows a Kentwood Real Estate analysis of the high-end housing market.

Last month, buyers snapped up 88 single-family detached homes priced at $1 million or more, a 44.3 percent increase from the 61 luxury sales in May 2013, according to the Kentwood report.

The dollar volume rose even more.

The closed volume for luxury single-family homes in May was $143.84 million, 63.3 percent higher than the $88.05 million in May 2013, according to the report based on Metrolist data that does not include Boulder.

Luxury homes also sold considerably fast.

The average days on market was 103 in May, a 52.3 percent drop from 214 in May of last year.

In the first five months of the year, there have been 263 luxury single-family home sales, an 11.4 percent increase from the 236 through May of 2013.

“It is quite impressive. May was a banner month,” said Julie Winger, a broker with Kentwood Cherry Creek.

One thing that has helped the market is financing for high-end homes, she said.

“Jumbo rates are lower than conventional loan rates right now,” Winger said. “I think buyers are taking advantage of what are incredible financing deals for expensive homes.”
Also, she said sellers who had been on the fence, now believe that luxury home prices are not going to rise much more.

“I don’t think we are going to see much more price escalation and sellers are realizing that now is an optimal time to sell,” she said.

A year ago, she said a lot of luxury home owners hesitated putting their homes on the market, because they felt if they waited, prices would rise.
That has happened, but the big price increases are probably are over.

“I don’t think they are going to fall, but I don’t think they are going to rise as fast as they had,” she said.

Also, some well-heeled buyers may be taking some profits out of the stock market and putting the money into high-end bricks and mortar.

“The stock market has been at recent highs, too, but I think people still remember what happened (when stock prices crashed),” and may think there is less volatility and risk in owning a seven-figure home than equities, she said.

Year-to-date, closed volume is up 15. 3 percent, rising to $410.12 million from $355.6 million.

Julie Winger

Julie Winger

The average days on the market through May was 124 days, a 39.2 percent decline from 204 in the first five months of last year.

While the numbers were much smaller, the luxury condo market showed even bigger year-over-year gains.

There were five luxury condo sales last month, a 66.7 percent increase from the three that closed in May 2013.

The total condo dollar volume showed a similar jump, rising 66.9 percent to $9.8 million, compared with $5.872 million.

Currently, there are 726 luxury single-family homes and condos on the market. Kentwood, with 118 of the listings priced at $1 million or more, has a 16 percent share of the luxury housing market.

This time last year, there were a total of 641 luxury homes on the market, 13 percent fewer than today.

“If you look at the MLS on a day-to-day basis, quite a few million dollar homes are coming on the market, but the well-priced ones are selling fast,” Winger said.

Will the trend continue?

“I wish I had a crystal ball,” Winger said. “I’m not sure we are going to see another incredible month like May. But with some more supply coming on the market, giving buyers more choices, it’s possible strong sales could continue for a couple of more months.”

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.