2016 Denver Luxury Market Report

2016 Denver Luxury Market Report

First, on behalf of the Colorado Dream House Team, let me say, thank you very much, to our amazing clients and friends. Without you, there would be no Colorado Dream House Team. It’s an absolute pleasure to serve you and help you with your buying, selling and investing needs. As I mentioned at our client appreciation party back in August, when we think about our clients we don’t see customers, we see good friends. We very much appreciate your confidence, trust, and business. Also, let us be the first to wish you a Happy Thanksgiving. We hope you enjoy the Holiday with your family and friends.

 

In preparation for this report, we spend a lot of time looking at the numbers for Luxury sales for the year to date. We not only look at where the overall market stands but we break down each price range in 500,000 increments. We also take a close look at how many active properties you are competing with at the present time, in what neighborhoods are the homes selling and at what rate are homes selling in your specific price range. We hope you will find this information valuable and you’ll use it to help with your buying and selling strategies in 2017.

 

These numbers are based on active and sold properties between January 1st, 2016 and November 1st, 2016. Definitions: DSF= Detached Single Family, ASF= Attached Single Family (i.e. townhomes and condos), absorption rate = the rate at which homes are sold (absorbed into the market). The absorption rates quoted below are for all of Denver and surrounding suburbs. Absorption rates for your neighborhood could be higher or lower.

 

Overall sales across Denver and all surrounding suburbs:

 

  • It looks like we are trending very close to last year. As we stand right now we are at 50,614 sold DSF and ASF. When the final November and December numbers come in I believe we will fall short of last years record number of 60,475.
  • Of the 50,614 sold properties DSF= 36,965 and ASF= 13,649
  • The price range with the most sales is between 300-350,000 with 7516 sales.
  • The biggest month for closed sales was June. This means the properties went under contract in April and May.
  • Total Sales for 2015 60,475 – 43,571 DSF, 16,904 ASF
  • Total Sales for 2014 57,135 – 41,869 DSF, 15,266 ASF
  • Total inventory remained low for the year. However, September had the most homes available to buyers at 9052. Compared to 2015 when the high water mark was 8,307 in August of 2015.

 

Luxury Statistics are broken down into 500K bandwidths. These are for Denver and all the surrounding suburbs.

 

$1,000,000 – $1,500,000

Actives

 

  • There are currently 581 active properties on the market in this price range. The high water mark for active properties in this price range was 596 in October. This tells us that the sales of these homes slowed considerably towards the end of the year and the majority of the sales occurred in 1st and 2nd quarter of this year.
  • There were a total of 1600 active listings in this price range in 2016
  • There were a total of 1500 active listings in this price range in 2015
  • There were a total of 1300 active listings in this price range in 2014

 

$1,000,000 – $1,500,000

Sold

 

  • There have been 755 sold in this price range year to date.
  • There were 761 sold in this price range in 2015.
  • There were 579 sold in this price range in 2014.
  • This data tells you that about 68 homes a month sell in this price range. This is the most active price range in the luxury market. The absorption rate in this price range shows about 8.5 months of inventory.
  • The most sales are occurring in the following areas:
    • 303 in Denver in 2016 – 254 in Denver in 2015
    • 52 in Castle Rock in 2016 – 34 in Castle Rock in 2015
    • 38 in Greenwood Village in 2016 – 46 in Greenwood Village in 2015
    • 30 in Boulder in 2016 – 18 in Boulder in 2015
    • 33 in Littleton in 2016 – 22 in Littleton in 2015
    • 28 in Parker in 2016 – 22 in Parker in 2015
    • 20 in Lone Tree in 2016 – 23 in Lone Tree in 2015
    • 20 in Cherry Hills Village in 2016 – 19 in Cherry Hills Village in 2015
    • 19 in Englewood in 2016 – 18 in Englewood in 2015

 

$1,500,000 – $2,000,000

Actives

 

  • There are currently 275 active properties on the market in this price range. The high water mark for active properties in this price range was over 300 in June and July. You’ll notice there is a 47% drop in the number of sales when you move just 500,000 dollars higher in price range.

 

  • There were a total of 680 active listings in this price range in 2016
  • There were a total of 630 active listings in this price range in 2015
  • There were a total of 520 active listings in this price range in 2014

 

$1,500,000 – $2,000,000

Sold

 

  • There have been 245 sold in this price range year to date.
  • There were 252 sold in this price range in 2015.
  • There were 191 sold in this price range in 2014.
  • This data tells you that about 24 homes a month sell in this price range. This means you have 24 qualified buyers at any one time that can and will purchase a home in this price range. The absorption rate in this price range shows about 11 months of inventory.
  • The most sales are occurring in the following areas:
    • 97 in Denver in 2016 – 86 in Denver in 2015
    • 12 in Castle Rock in 2016 – 7 in Castle Rock in 2015
    • 23 in Greenwood Village in 2016 – 22 in Greenwood Village in 2015
    • 11 in Boulder in 2016 – 7 in Boulder in 2015
    • 8 in Littleton in 2016 – 5 in Littleton in 2015
    • 4 in Parker in 2016 – 6 in Parker in 2015
    • 9 in Lone Tree in 2016 – 8 in Lone Tree in 2015
    • 24 in Cherry Hills Village in 2016 – 23 in Cherry Hills Village in 2015
    • 7 in Englewood in 2016 – 12 in Englewood in 2015

 

$2,000,000 – $2,500,000

Actives

 

  • There are currently 105 active properties on the market in this price range. The high water mark for active properties in this price range was July, August, and September.

 

  • There were a total of 260 active listings in this price range in 2016
  • There were a total of 220 active listings in this price range in 2015
  • There were a total of 210 active listings in this price range in 2014

 

$2,000,000 – $2,500,000

Sold

 

  • There have been 92 sold in this price range year to date.
  • There were 74 sold in this price range in 2015.
  • There were 73 sold in this price range in 2014.
  • This data tells you that about 9 homes a month sell in this price range. This means you have 9 qualified buyers at any one time that can and will purchase a home in this price range. The absorption rate in this price range shows about 11 months of inventory.

 

  • The most sales are occurring in the following areas:
    • 22 in Denver in 2016 – 26 in Denver in 2015
    • 9 in Castle Rock in 2016 – 4 in Castle Rock in 2015
    • 6 in Greenwood Village in 2016 – 4 in Greenwood Village in 2015
    • 15 in Cherry Hills Village in 2016 – 7 in Cherry Hills Village in 2015
    • 5 in Englewood in 2016 – 4 in Englewood in 2015

 

$2,500,000 – $3,000,000

Actives

 

  • There are currently 73 active properties on the market in this price range. The high water mark for active properties in this price range was September.

 

  • There were a total of 160 active listings in this price range in 2016
  • There were a total of 160 active listings in this price range in 2015
  • There were a total of 160 active listings in this price range in 2014

 

$2,500,000 – $3,000,000

Sold

 

  • There have been 37 sold in this price range year to date.
  • There were 41 sold in this price range in 2015.
  • There were 32 sold in this price range in 2014.
  • This data tells you that about 3 homes a month sell in this price range. This means you have 3 qualified buyers at any one time that can and will purchase a home in this price range. The absorption rate in this price range shows about 19 months of inventory.

 

  • The most sales are occurring in the following areas:
    • 10 in Denver in 2016 – 15 in Denver in 2015
    • 5 in Greenwood Village in 2016 – 4 in Greenwood Village in 2015
    • 2 in Cherry Hills Village in 2016 – 5 in Cherry Hills Village in 2015

 

$3,000,000 – $3,500,000

Actives

 

  • There are currently 30 active properties on the market in this price range. The high water mark for active properties in this price range was June and July.

 

  • There were a total of 72 active listings in this price range in 2016
  • There were a total of 71 active listings in this price range in 2015
  • There were a total of 53 active listings in this price range in 2014

 

$3,000,000 – $3,500,000

Sold

 

  • There have been 24 sold in this price range year to date.
  • There were 12 sold in this price range in 2015.
  • There were 9 sold in this price range in 2014.
  • This data tells you that about 2 homes a month sell in this price range. This means you have 2 qualified buyers at any one time that can and will purchase a home in this price range. The absorption rate in this price range shows about 12.5 months of inventory.

 

  • The most sales are occurring in the following areas:
    • 8 in Denver in 2016 – 4 in Denver in 2015
    • 2 in Greenwood Village in 2016 – 1 in Greenwood Village in 2015
    • 3 in Cherry Hills Village in 2016 – 2 in Cherry Hills Village in 2015
    • 3 in Englewood in 2016 – 0 in Englewood in 2015

 

$3,500,000 – $4,000,000

Actives

 

  • There are currently 32 active properties on the market in this price range. The high water mark for active properties in this price range was October.

 

  • There were a total of 60 active listings in this price range in 2016
  • There were a total of 51 active listings in this price range in 2015
  • There were a total of 42 active listings in this price range in 2014

 

$3,500,000 – $4,000,000

Sold

 

  • There have been 7 sold in this price range year to date.
  • There were 10 sold in this price range in 2015.
  • There were 12 sold in this price range in 2014.
  • This data tells you that less than a home a month sell in this price range. This means you have 7-12 qualified buyers a year that can and will purchase a home in this price range. The absorption rate in this price range shows about three years of inventory.

 

  • The most sales are occurring in the following areas:
    • 1 in Denver in 2016 – 4 in Denver in 2015
    • 2 in Cherry Hills Village in 2016 – 5 in Cherry Hills Village in 2015
    • 1 in Englewood in 2016 – 0 in Englewood in 2015

 

 

 

 

Conclusions:

 

  • The first conclusion that jumps out at you is the number of areas that had banner years in sales (i.e. Castle Rock, Castle Pines, Parker, and Boulder). What’s different about this is that the trend line for the previous years was that these areas were declining. They clearly outperformed the trend line in 2016. Meanwhile, traditional areas that have been very consistent like Cherry Hills Village in Greenwood Village were either down in certain price ranges or flat.
  • The second conclusion we can glean from this data is that the selling season is starting much earlier each year. The vast majority of these homes that sold got on the market by mid-March. And they were under contract or sold by the first of June. This last part tells us that the selling season is also getting shorter. The selling season used to be four months or longer and now it appears that the trend line is showing that the window for luxury homes is 2 to 3 months between mid-March in mid-June at the latest.
  • There’s no doubt that some buyers stood on the sidelines this year in the luxury market because they were afraid to make a move before the election. While the data may not prove that to be true we can tell you from personal experience that we heard that from many buyers. We also heard some financial planners were giving that advice to their wealthy clients. This election year was probably the worst that we’ve seen in the last 20 or 30 years. The contentious talk, headlines, and constant 24-hour media news flash made everyone nervous. We usually tell our sellers that all bets are off when it comes to predicting the market in an election year and this year was the worst we have ever seen.
  • There’s a possibility we could have a boomerang effect occurring right after the election seeing a large pool of buyers coming into the marketplace. For no other reason than the fact that the election is over and people are feeling less anxious. If this does not happen and the market continues to prod and plug along at a very slow pace then I think it will confirm that the market correction we were expecting in 2017 came six months early.
  • A balanced market in 2017 is not necessarily a bad thing. It means that sellers will have to be extremely realistic about their sale price. It may also require that sellers strategically adjust the sales price one, two or even three times based on what the market is telling them. The house will have to show exceptionally well and have the wow factor. It will be critical for sellers to hire a real estate team like ours that has exceptional marketing. Casting a wide net in reaching a large number of people is the name of the game. For buyers, this will be your best buying opportunity in the last four years. We do not expect home appreciation on the same trajectory it has been on for the last four years. A more modest appreciation of three or 4% is what we would predict. This will be a buying opportunity for you to purchase at incredibly low-interest rates while home prices may be flat or declining.
  • I know we have been predicting this for several years now but again we believe that the Fed will have no choice but to raise interest rates at some point in 2017. We saw just a slight bump in interest rates a week ago. They did the exact same thing at the exact same time last year. Again, it’s important to watch this key financial indicator. We also believe that inventory will continue to remain low but with more choice than we have seen in the last two or three years.

 

We hope this data gives you some insight into the market and some strategy about possibly what to expect in 2017. If nothing else it gives you some insight into how many buyers happen to be in the market for your home each month. It’s never as many as you think. That will conclude this luxury market report for 2016. We hope you found this valuable. If there is something you would like to discuss with us about the market or your home, in particular, we would welcome the call. Again thank you for your trust and your business. Have a blessed holiday.

Sincerely,

Dan Polimino, Gary Lorhman, & The Colorado Dream House Team.

Team@coloradodreamhouse.com, 720-446-6325 or www.coloradodreamhouse.com

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