The luxury-home market in metro Denver is making a comeback, with sales this year already exceeding the total for 2011.
Sales of $1 million-plus homes in metro Denver totaled 540 last year, according to Metrolist, the metro area's multiple-listing service. Through September, such sales in 2012 totaled 542.
The improvement in the metro area's high-end housing market echoes a similar trend nationally.
"It has broadly been improving," Walter Molony, a spokesman for the National Association of Realtors, said of the luxury market. "If you look at sales by price range, we've seen noticeable increases in the upper price range."
Sales of homes priced between $750,000 and $1 million in August were up 19 percent over August 2011, Molony said, and sales of $1 million-plus homes were up 24.9 percent for the comparable period.
"Luxury-home sales have increased for two reasons," Molony said. "This end of the market is more volatile. A good performance in the equities market and a stock-market recovery are positive factors for the upper end. The other thing is, the availability of jumbo mortgages has improved. A lot of people still need mortgages in these price ranges. And, of course, interest rates are down."
Late last week, mortgage rates dropped near a previous low set earlier in the month. The average U.S. rate on a 30-year fixed-rate mortgage was 3.37 percent, according to a weekly report from mortgage buyer Freddie Mac.
Molony noted that the only price range where sales are down is less than $100,000, because the inventory has pretty well evaporated.
"Those homes are harder to find," he said.
Low inventory also is an issue in the high-end market.
"The last stat I saw," said Dan Polimino of Keller Williams Realty in Denver, "luxury inventory was down 47 percent from last year."
That translates to higher sales prices and homes being on the market for a shorter period.
"One of the things we're seeing is offers being pretty close to the asking price or exactly the asking price," Polimino said. "The buyer says he missed out on the home he wanted, meaning he got outbid. Now he's putting in an asking-price offer so he doesn't lose his second choice. We never would have heard that narrative in the last four years."
John Brimberry of Vectra Bank Colorado said although the entire market is up, "the luxury market tends to lag. But even so, it is improving as well. There's a lot of liquidity in the market and improved confidence, so a lot of people who've been sitting on the sideline can now sell their home or buy a nicer one."
Still, these are not the halcyon days of luxury-home sales.
"Luxury homes represented the last
segment of the housing market to get softer and recede in the downturn, and it probably will be the last segment of the market to make a full comeback," said Scott Webber, president of Fuller Sotheby's International Realty in Denver.In 2011, Fuller Sotheby's sold 92 homes in the metro area in the million-dollar-plus market. This year through September it sold 89.
Webber expects his company's sales to grow by as much as 25 percent this year compared with 2011.
While sales totals have been gaining momentum, Webber noted that prices still have a long way to go.
"Depending on how far out of the metro area you are, prices are down as much as 40 to 50 percent," he said. "And the luxury market is very much influenced by all of this political drama and business uncertainty. There is a lot of trepidation right now about moving assets around and spending money."
The Denver housing market bottomed out in March 2011, Polimino said. Now, he calls Denver "probably the No. 1 or No. 2 real-estate market in the country."
"I've told luxury buyers who want to get a steal or a screaming deal that they're about 18 months too late to the party," he said.
Patty Silverstein of Development Research Partners in Denver said sales of luxury homes tend to filter down and benefit the whole economy, with homebuyers making additional expenditures on furniture, fixtures, lawns and gardens.
"I think it's reasonable to suggest that a level of associated spending is directly related to the price and size of the home," she said. "Those people have more income, and that has a large multiplier effect on the community."
John Mossman: 303-954-1479 or jmossman@denverpost.com
On the market
Fuller Sotheby's current listings range from a $41 million, 6,320-acre ranch in Parshall in Grand County to an $86,000 condo in southeast Denver.
The company lists 221 homes priced at $1 million and above, including an $18 million, 32-acre ranch in Evergreen; a $7.9 million, five-bedroom, five-bath home in Boulder; a $7.85 million, eight-bedroom, eight-bath home in Beaver Creek; and a $7.2 million, six-bedroom, nine-bath home in Cherry Hills Village.
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