2017 Denver Luxury Real Estate Market Report

2017 Denver Luxury Real Estate Market Report

 

By The Colorado Dream House Team

 

Hard to believe 2017 is in the rearview mirror, this year just seemed to fly by. We pray this coming Holiday weekend is filled with blessings, family, and joy. As many of you know who have been clients of the Colorado Dream House Team for some time each year we author this Luxury Market report to see how luxury home sales faired in 2017 compared to previous years. We also include some market information in our conclusions section and give you an idea of what to expect in 2017. On behalf of the entire Colorado Dream House let me say how much we appreciate you, your friendship and your business. We are a 97% referral based business and without you, we could not exist so thank you again for all you do.

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 2018.

These numbers are based on active and sold properties between January 1st, 2017 and November 17th, 2017. 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 it will be a banner year for sales throughout Denver. As we stand right now we are at 59,055 sold DSF and ASF. When the final November and December numbers come in I believe we will shatter last years all-time high of 62,886. I predict we will end around 67,000 or 68,000 homes sold.
  • Of the 59,055 sold properties DSF= 43,014 and ASF= 16,060
  • The price range with the most sales is between $300,000-$350,000 with 8711 sales.
  • The biggest month for closed sales was June. This means the properties went under contract in April and May.
  • Total sales for 2016 62,886 – 45,790 DSF, 17,096 ASF
  • 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 at record lows for the year. However, July had the most homes available to buyers at 11,897. Compared to 2016 when the high water mark was 12,071 in September.

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

$1,000,000 – $1,500,000

Actives

  • There are currently 590 active properties on the market in this price range. The high water mark for active properties in this price range was 801 in August. This tells us that the sales of these homes have picked up considerably towards in the last 60 days.
  • There were a total of 2000 active listings in this price range in 2017
  • 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 1068 sold in this price range year to date.
  • There were 963 sold in this price range in 2016
  • 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 89 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 6 months of inventory.
  • The most sales are occurring in the following areas:
    • 414 in Denver in 2017 – 303 in Denver in 2016
    • 72 in Castle Rock in 2017 – 52 in Castle Rock in 2016
    • 47 in Greenwood Village in 2017 – 38 in Greenwood Village in 2016
    • 77 in Boulder in 2017 – 30 in Boulder in 2016
    • 43 in Littleton in 2017 – 33 in Littleton in 2016
    • 34 in Parker in 2017 – 28 in Parker in 2016
    • 21 in Lone Tree in 2017 – 20 in Lone Tree in 2016
    • 18 in Cherry Hills Village in 2017 – 20 in Cherry Hills Village in 2016
    • 25 in Englewood in 2017 – 19 in Englewood in 2016
    • 31 in Highlands Ranch in 2017

$1,500,000 – $2,000,000

Actives

  • There are currently 271 active properties on the market in this price range. The high water mark for active properties in this price range was over 373 in July. You’ll notice the number of homes for sale drops by 50% when you move just 500,000 dollars higher in price range.
  • There were a total of 850 active listings in this price range in 2017
  • There were a total of 800 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 345 sold in this price range year to date.
  • There were 315 sold in this price range in 2016
  • 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 28 homes a month sell in this price range. This means you have 28 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 9 months of inventory.
  • The most sales are occurring in the following areas:
    • 129 in Denver in 2017 – 97 in Denver in 2016
    • 24 in Castle Rock in 2017 – 12 in Castle Rock in 2016
    • 24 in Greenwood Village in 2017 – 23 in Greenwood Village in 2016
    • 29 in Boulder in 2017 – 11 in Boulder in 2016
    • 19 in Littleton in 2017 – 8 in Littleton in 2016
    • 9 in Parker in 2017 – 4 in Parker in 2016
    • 9 in Lone Tree in 2017 – 9 in Lone Tree in 2016
    • 13 in Cherry Hills Village in 2017 – 24 in Cherry Hills Village in 2016
    • 9 in Englewood in 2017 – 17 in Englewood in 2016

$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.
  • There were a total of 320 active listings in this price range in 2017
  • There were a total of 290 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 117 sold in this price range year to date.
  • There were a 117 sold in this price range in 2016
  • 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 12 months of inventory.
  • The most sales are occurring in the following areas:
    • 47 in Denver in 2017 – 22 in Denver in 2016
    • 9 in Castle Rock in 2017 – 9 in Castle Rock in 2016
    • 8 in Greenwood Village in 2017 – 6 in Greenwood Village in 2016
    • 8 in Cherry Hills Village in 2017 – 15 in Cherry Hills Village in 2016
    • 1 in Englewood in 2017 – 5 in Englewood in 2016
    • 8 in Boulder in 2017

$2,500,000 – $3,000,000

Actives

  • There are currently 102 active properties on the market in this price range. The high water mark for active properties in this price range was August.
  • There were a total of 230 active listings in this price range in 2017
  • There were a total of 200 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 51 sold in this price range year to date.
  • There were 47 sold in this price range in 2016
  • 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 4 homes a month sell in this price range. This means you have 4 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 22 months of inventory.
  • The most sales are occurring in the following areas:
    • 13 in Denver in 2017 – 10 in Denver in 2016
    • 0 in Greenwood Village in 2017 – 5 in Greenwood Village in 2016
    • 9 in Cherry Hills Village in 2017 – 2 in Cherry Hills Village in 2016
    • 5 in Boulder in 2017

$3,000,000 – $3,500,000

Actives

  • There are currently 49 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 102 active listings in this price range in 2017
  • There were a total of 97 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 33 sold in this price range year to date.
  • There were 32 sold in this price range in 2016
  • 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 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 16 months of inventory.
  • The most sales are occurring in the following areas:
    • 7 in Denver in 2017 – 8 in Denver in 2016
    • 3 in Greenwood Village in 2017 – 2 in Greenwood Village in 2016
    • 6 in Cherry Hills Village in 2017– 3 in Cherry Hills Village in 2016
    • 1 in Englewood in 2017 – 3 in Englewood in 2016
    • 5 in Boulder in 2017

$3,500,000 – $4,000,000

Actives

  • There are currently 34 active properties on the market in this price range. The high water mark for active properties in this price range was July.
  • There were a total of 100 active listings in this price range in 2017
  • 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 21 sold in this price range year to date.
  • There were 12 sold in this price range in 2016
  • 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 1.9 homes a month sell in this price range. This means you have roughly a 15-20 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:
    • 6 in Denver in 2017 – 1 in Denver in 2016
    • 8 in Cherry Hills Village in 2017 – 2 in Cherry Hills Village in 2016
    • 0 in Englewood in 2017 – 1 in Englewood in 2016
    • 1 in Greenwood Village in 2017
    • 2 in Boulder in 2017

Conclusions:

  • There is no doubt this was a banner year in Luxury. Last year we predicted accurately that there may be a boomerang effect to start 2018. We believed that many people in the luxury space were sitting on the sideline during much of 2016 primarily due the contentious election. We thought that right after the election the luxury market would take off and it sure did. The city of Denver was the big winner with huge increases in luxury sales in all price ranges. Boulder was the second big winner not even showing up in some price categories last year, but this year bouncing back with impressive gains. Parker and Castle Rocks had big years in 2016 and we were watching the trend line to see if this would continue but it did not. It was more a usual or normal year in those two cities for Luxury sales. Cherry Hills Village and Greenwood Village were a mixed bag seeing some gains in certain price ranges while seeing some declines in others. Overall the areas are holding steady with no dramatic upticks and declines.
  • For the second year in a row, the selling season is starting earlier and earlier. We are advising all of our clients that are thinking about selling their home to be in the MLS NO LATER than the third week of March. 47% of all homes sold in the Denver metro area will be sold between the third week of March and the third week of June. If you are thinking about selling you cannot miss those three months. March through June is when all the buyers are out!
  • Modest gains are the prediction for 2018. Gone are the days of 8, 9, 10 or 11 percent gains year over year. A market cannot sustain double-digit gains year over year without the bubble bursting. Plan and expect a 1-3% gain in 2018 for Luxury property and 2-5% gain in non-luxury.
  • The inventory problem is not going away anytime soon. Across the Country, we are running into about a 900,000 home deficit every year. We predict low resale inventory will continue for at least the next three years. This is a circular problem meaning people will not sell their home if they can’t find a home to buy. We are urging our clients to buy first and then sell their home. Sounds easy but some people need the proceeds from their sale of the home for the purchase of the new one. To solve this problem we have partnered with a few lenders that are providing everything from short-term bridge loans and a painless home equity loans that can close in as little as 10 days. What we mean by painless is no appraisal, few documents, electronic signing and 10 days later you have the equity out of your home to use as a down payment on the next one. Call us for more information on how this can work for you. We have done this for a few clients and it’s work seamlessly.
  • There is a new sheriff in town and that means a new Federal Reserve Chairman. We decided this year we will not make any predictions on interest rates since we never seem to quite figure out what the Fed chair is going to do and a new chair makes it more of a crapshoot.
  • The biggest guess of all is going to be if we get a new tax plan what will it look like? Will we still have a mortgage interest deduction and if so how much? There are different plans in the House and Senate. How about the property tax deduction? Will that still be available as an incentive to homeowners? Will there be four tax brackets or seven? Will we really save money as an individual or will this just be a tax break for the corporations? All big questions for 2018 and how it may affect the housing market. Then there’s health care, which is a whole another discussion.
  • The positives for Denver in 2018 is that people still want to work and live here to the tune of a net gain of about 50K a year. That’s impressive and few cities can boast the same type of gains. We will all be anxiously awaiting the announcement from Amazon. Will they pick Denver as their second North American headquarters bringing 50,000 jobs with them and an influx of 5 billion dollars? We sure hope so as does the cities that are on Amazon’s short list.

We hope this data gives you some insight into the market and some strategy about possibly what to expect in 2018. 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 2017. 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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