The Denver real estate market is hot! This year we have sold more homes each week than the number of new listings which replace them. Inventory is declining and prices are rising. The only exception is the luxury real estate market above $1m.
Overall, the market is still booming. Good homes sell almost immediately and often with multiple offers. That is particularly true of homes located in the better inner-city neighborhoods like Hilltop, Country Club and Cherry Creek. Elizabeth of The Hotz Group listed a home for sale in Platte Park priced at $399,000 last Friday. By Sunday, it had 31 showings and 3 offers. It went to a contract at full price.
Luxury homes there even sell quickly. One home just north of the Cherry Creek North shopping area just went under contract for over $600 per square foot immediately when it was placed on the market. Prices are being driven up in Denver’s better neighborhoods.
Closed sales of homes priced over $1m are down 28% from the January to February period of of 2013. Peter Blank of Kentwood City Properties says it’s due to a lack of supply, not a lack of demand.
That makes sense. The inventory of homes priced over $1m in Cherry Hills Village is at an historic low. There are only 46 active listings there in that category. That compares to over 200 listings for sale back in the bad old days of 2009. The absorption rate there is now 60 days. That means that if no new listings come onto the market and sales continue as they have over the last 2 months, the entire inventory of homes for sale will be exhausted.
In contrast, many good neighborhoods in the city at lower price points have absorption rates below 14 days. Still, the luxury real estate market is much better than it was in 2009. Absorption rates then fluctuated from 12-22 MONTHS!
So, this minor set-back for sales in luxury neighborhoods is not significant. But, luxury homes in the City have hardly dipped at all. Usually, home sales closer to the city core sell faster and this cycle seems to be no exception.
Luxury home sales in markets like Aspen and Telluride are measured usually with home sales above $10m. That’s ten times more expensive than Denver luxury real estate. We are still awaiting news of how those high-end markets are holding up in home sales compared to 2013. We will report it here as soon and