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Kentwood: Condo market hot

Highlights:

  • Kentwood City Properties releases downtown condo report.
  • Report finds sales are up 10% in July.
  • Sales volume is up 13.2%
This 2,504-square-foot, 3-bedroom, 3-bath in downtown Denver sold in July for $1.225 million.

This 2,504-square-foot, 3-bedroom, 3-bath in downtown Denver sold in July by the PorchLight Real Estate Group for $1.225 million.

The downtown Denver condominium market is shaping up to be one of the strongest, if not the strongest submarket in the metro area.

Downtown Denver condo sales rose by 10 percent in July from July 2013, according to a report by Kentwood City Properties on Wednesday.

Earlier this week, Kentwood Real Estate, as reported by InsideRealEstateNews.com,  released a report showing that luxury home sales priced at $1 million or more were down 2.4 percent last month from a year earlier.

There was an even bigger drop in Cherry Hills and Greenwood Village, which saw a 12.9 percent year-over-year drop, according to Kentwood.

As a sign of how busy downtown brokers are, Dee Chirafisi, a broker, founder and owner of Kentwood City Properties, was showing properties to clients most of the day Wednesday and didn’t even have time to see the report generated by her company.

The analysis of Metrolist data shows that there were 44 condo closings last month, compared with 40 in July 2013.

The dollar volume rose even more.

Total condo dollar volume hit $20.312 million last month, a 13.2 percent jump from the $17.95 million in July 2013. The dollar volume rose even though the most expensive condo to sell last month cost $1.225 million, down 38.4 percent from the $1.99 million for the most expensive sale in July 2013.

Year-to-date numbers were even better.

In the first seven months of the year, their have been 248 condo sales downtown, a 13.8 percent increase from the 218 in the first seven months of 2013.

The closed dollar volume downtown hit $123.7 million, up 28 percent from the $96.6 million in the first seven months of last year.

“Those numbers sound right on,” Chirafisi said.

Condos also were selling faster.

In July, the average days on the market was 50 days, a 24.2 percent drop from 66 days in July 2013.

Dee Chirafisi

Dee Chirafisi

Year-to-date, average days on the market for condos was 66, down 24.1 percent form 87 in the first seven months of 2013.

Chirafisi said a lot of the credit goes to the massive redevelopment of the historic Denver Union Station.

“So much of this is driven by Union Station,” she said. “That is no surprise. Anytime you have a really big infrastructure this happens. When Coors Field was being built, this happened and downtown real estate was the strongest market.”

Lenders also have made it a bit easier to qualify for a non-conforming loan, which also has helped the market, she said, although there also are a lot of cash buyers.

Chirafisi said demand is so strong that her office is being bombarded not only with Denver residents, but investors and owner-occupants from the mountains and out-of-state.

“Other brokers are calling us every day saying they have clients who want to buy and want to know what is available,” Chirafisi said. “We tell them that their clients probably can’t buy a downtown condo with contingencies, because they will probably be competing with cash buyers.”

Sales would be even stronger if there were more condos to choose from, she said.

“People are coming down from the mountains and they can’t believe you can’t buy a new condo off a floorplan,” Chirafisi said.

“They say, ‘I see 30 cranes downtown. What are you talking about?’ I tell them that is an apartment building, that is an apartment building, that is an apartment building.

“They are are all apartment buildings. If we had two, new beautiful condo towers being built, we would have no problem quickly selling them out. It’s crazy out there.”

Brian Phettaplace, senior manager of economic development for the Downtown Denver Partnership, couldn’t agree more.

“The brokerage community is telling me it is a very, very tight market with a very restricted inventory,” he said.

“With no new construction, all we have is the resale market,” Phetteplace said.

“With the existing units being absorbed very fast, prices also are going up very fast,” he continued. “There have been multiple offers and bidding wars and when condos become available, they go very fast.”

He said the “general consensus in the development community” is no new condo towers are being built because of construction defect litigation concerns, even though there is plenty of demand for units.

“We are starting to hear some talk that a couple of condo projects may go forward,” even without the threat of being sued for what many in the development community believe have been frivolous and flimsy reasons.

Despite the lack of supply, he’s not surprised that sales are up 10 percent.

“Downtown is the place people want to be,” Phetteplace said.

“With everything going on with FasTracks and the Union Station opening, we are finding that people want to have access to transit and all of the amenities and entertainment opportunities that downtown Denver. People want to live and work in the walkable, enjoyable downtown.”

Interested in buying a downtown 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.