This home at 3220 Zuni St. in Highland is priced at just over $1 million. It is listed by Dee Chirafisi of Kentwood City Properties.

Almost one out of every four homes sold and closed in the metro area in 2009 took place in Denver. And almost 30 percent of the homes sold above $1 million were in Denver.

An analysis of Metrolist data by independent broker Gary Bauer shows that 10,010 homes closed in the Denver area last year, accounting for 23.8 percent of the 42,027 home sales in the metro area last year. Arapahoe County was No. 2, with 8,230 single-family homes and condo closings last year.

That may not be too surprising.

“Denver usually seems to get the largest percentage of the buyers, except during the time when Douglas County was really growing like gangbusters,” Bauer said. During much of the 1990s, Douglas County was the fastest growing counties in the U.S. and is still one of the fastest. (Indeed, I remember writing a story at the Rocky Mountain News during the ’90s that Highlands Ranch in Douglas County accounted for one of five out of every new and used-homes sold.)

Denver Mayor John Hickenlooper said that given Denver’s size, Denver’s showing last year isn’t startling.

“Denver accounts for 22.2 percent of the metro area’s population,”  Hickenlooper said. “So we are doing a bit above that for home sales, but not much more. Denver is right about where it should be.”

Hickenlooper did say that a Realtor-friend recently mentioned to him that sales activity seems to have picked up recently.

Corey Wadley, a broker and co-owner of Nostalgic Homes in West Highland in northwest Denver, said that a lot of buyers are drawn to certain Denver neighborhoods because they think homes will retain their values more than suburban counterparts.

“In the Highland neighborhood, for example…our prices held stable during this recession,” Wadley said. “I think the biggest factor is homes  being able to hold values. There’s only a finite amount of new stuff in a place like Highland. I think also there is a uniqueness about Denver neighborhoods. You can walk street-by-street and see how the housing stock changed from different eras and from additions, renovations and even some scrape offs.”

Perhaps what was most surprising about Bauer’s report, is that Denver also dominated the $1 million and over price category. The 131 single-family homes and condos that sold and closed last year in Denver accounted for  28 percent of the 471 homes sold in that lofty price range. Arapahoe County, with 95  homes selling at $1 million or more and Douglas County with 67, accounted for 20 percent and 14 percent of that market, despite a number of high-end enclaves.

“That is a bit surprising,” said Chris Mygatt, president of  Coldwell Banker Residential Brokerage Colorado. In the past, he said, the vast majority of homes in that price range were in Arapahoe County,  because of the concentration of  huge homes in Cherry Hills and Greenwood Village.

“What I think what this is showing is a societal change,” Mygatt said. “It speaks to the idea that people who have a significant amount of money who are down-sizing or right-sizing, who are deciding  they do not need a half acre or an acre of land.  It’s never been more fashionable to be frugal.  Let’s face it:  Someone who is buying a million-dollar home is not spending their last million dollars on it. But they don’t want the expense of watering a giant lawn or keeping it clean, even if they can afford it. ”

He said the move to Denver from the suburbs is a trend he sees continuing. Mygatt said there are “too many 6,000-square-foot homes,” in the suburbs, and they will be increasingly difficult to sell.

“The smart developers are now building a very well-designed, very efficient 3,500-square-foot home instead of  a 6,000-square-foot home,” Mygatt said. “And the new homes are very, very green. ”

“That’s great,” about Denver, said Christina de Barros, of RE/MAX Masters. “It is a little surprising given that Arapahoe County has Cherry Hills and Greenwood Village and Douglas County has Castle Pines Village. ” Cherry Hills, for example, had 46 home sales of more than $1 million last year, while Cherry Creek in Denver, had seven, she said. And Boulder County (although not most of the city of Boulder), had a total of 126 home sales above $1 million, for 27 percent of that market, making it Denver’s closet competitor.

Some well-heeled buyers were picking up screaming, high-end deals last year, said Susan C. Mathews, a broker with Fuller Sotheby’s International Realty.

“There were a lot of foreclosures, or more likely short sales, in places like Hilltop and Crestmoor,” Mathews said. “I saw homes that were originally priced at $2.25 million and up selling for $1.4 million or $1.5 million. And that was good. It helped us get some of this inventory off the market.”

She said high-end deals can still be found, but there are not as many as there were in 2009.

“I think consumer confidence is returning,” Mathews said. “People are not as afraid that prices are going to continue to drop if they buy now. I do think we are past the bottom.”

Wadley said that in northwest Denver, homes priced below $450,000 are selling, but it is tougher to move ones above that range.

“But Jenny (Apel,his wife and co-owner of Nostalgic Homes) did sell a William Lang mansion off Lowell (Boulevard) last year for $950,000,” Wadley said. “And I think that when homes that do sell in places like Cherry Hills for above the $1 million mark, they have been heavily discounted from their original asking price.” In fact, he said he thinks a lot of those ultra-expensive suburban homes are being sold at a loss.

Bauer said that one reason Denver dominates the luxury home market, is that empty nesters, who are  at the age and income level who can afford seven-figure homes, would rather live in an urban area than in a suburban community.

“I think part of it is the aging of the population,” Bauer said. “Many people are still working, and want to be closer to where they are working, which is often downtown.  They are down-sizing and their children are grown. For a large percentage of the population, Denver offers a chance to be close to the sporting facilities, theater, and everything else in downtown and LoDo.”

He pointed to Janet Elway as an example.

“With these $1 million-plus homes, people really want something special,” Bauer said. “Janet Elway went from a giant home in Cherry Hills to a Denver home in Belcaro.”

Source: Gary Bauer

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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Still, many Realtors contend that doesn’t really capture  what is  happening in the market.

They argue that interest in homes that most people buy – those below $300,000 – is quite robust. And if it were not for the huge drop in values among the most expensive houses, the Denver-area market would be extremely strong.

“I am always afraid when someone reads an article showing an overall gain, or a peak, or a loss in the Denver metro area, they think that is what they are going to find in every neighborhood,” said Corey Wadley, a broker-owner of Denver-based Nostalgic Homes.

He said that reports looking at an overall market do not take into consideration that different market exist at different price points.

“First-time home buyers read it is a buyer’s market, and think the can throw a wet noodle at the wall and it will stick,” Wadley said. “But it is not a buyer’s market in the areas around downtown Denver under the $250,000 price point. People in the trenches can tell you that we are looking at multiple offers at these price points below $300,000 or $250,000. The overall numbers for a metro area do not really tell you much in relationship to homes people are looking to buy right now.”

He said in northwest Denver example, where Nostalgic Homes is headquartered and does two thirds of its business, home prices appreciated last year for those priced $300,000 or below. Developers of luxury spec homes – those without buyers – in northwest Denver had to drop their prices, because of extremely high carrying costs, making the market look weaker than it really was for the majority of buyers, he said.

If you removed the luxury housing market from the statistics, which has seen huge slashes in prices, the rest of the market would look pretty solid, said Jeff Bernard, principal of Bernard Real Estate Analytics and a broker with RE/MAX Alliance.

“I really believe so,” Bernard said. “The luxury housing market is experiencing a pretty amazing crash. I would think that is the only thing that would really be hurting the overall Denver residential real estate market…I don’t want to sound trite, but it really is almost a street-by-street market. There are certain aggregates than you need to look at when we start drilling down into the market. I think the $300,000 and below is a very healthy market. It is a ticking time bomb in the $750,000 to $1 million and beyond market. I would say that is really a black hole out there, although it is a small percentage of the market.”

Economist Patty Silverstein, principal of Development Research Partners, said she has not paid as much attention to the sales in price point like many Realtors have, but she believes that they are probably correct that the luxury housing market is a drag on the overall market.

“The higher-end housing market seems to have more swing to it,” she said

Bernard said the $8,000 tax credit for first-time home buyers helped the overall Denver housing market last year.

“I know that from first-hand experience,” Bernard said. “I helped my daughter buy her first home last year. She was looking in the $210,000 range and we saw the prices increases, as people bid up the prices on those homes.”

He said at the low-end, first-time buyers not only are competing against owner- occupants like themselves, but also against investors who plan to fix them and flip them, or rent them.

Bernard and Wadley said that the extension of the $8,000 tax credit to the end of April, as well as a $6,500 tax credit for some current homeowners, should drive traffic in the first few months of this year. Wadley said he is surprised by how many people who unaware of the tax credits, especially the one for existing homeowners. He said he is encouraging people to start looking now, rather than waiting until February, and risk not getting their home under contract in time to take advantage of the tax credits.

Early signs are promising, Wadley said.

“If we judge it by open house traffic, the interest out there is huge so far this year,” Wadley said.

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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