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Looking Back at 2018

 

As I do every year, I try to give our clients the best and most up-to-date information about the Luxury Market. This is the time of year when I look back at 2018 and see what has happened in Luxury sales in and around Denver. It’s my hope you can use this information to strategize your real estate needs. Below is the 2018 Luxury Market Report.

We not only look at total sales in and around Denver, but we are very detailed in breaking down the price ranges in 500K bandwidths. Probably the most valuable information in this report is detailing the exact cities and sub-areas where most sales are occurring. For example, we had been hearing stories about how some residents in Castle Pines Village and Castle Rock have been having a hard time selling their homes this year. When we looked at the stats for just Castle Rock, we noticed they were right. Sales were either down from 2017 or flat in most luxury price ranges from 1 million to 4 million in Castle Rock.

There are many other insights in this report and you may want to look deeper than just your price range or city. Don’t forget to look at the conclusions we share at the end of the report.

2018 Denver Luxury Market Report

The Colorado Dream House Team

 

The times they are a changing and so is the market. Although we are not in a buyers’ market, yet it is on its way. The five years of a full-blown seller’s market appears to be over. I say appears because anything can happen and does in real estate. All indications are that a small correction in the market is either already here or will be here as early as this winter or as late as next fall. Now I know that covers a lot of ground and you may think I have covered all my bets in that statement. We just don’t know and if you run into anyone that says they do know what the market will do they’re probably guessing like everyone else. We’ll have to see how Wall Street; the banks and consumer react to a divided Congress. If a stalemate happens between the democratically led house and republican led senate occurs and nothing gets done you can bet the economy will slow down. This is why many people believe the correction is here or coming. With that said sometimes the best predictor of what to come is what has happened in the past so let’s take a look at what happened in the luxury market in 2018.

Before we dig into the number let me say on behalf of the Colorado Dream House Team, we wish you and your family a very Happy Thanksgiving. We pray this weekend is a blessing to all. Let me also say how much we appreciate our clients past and present. We are grateful for 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 2019.

These numbers are based on active and sold properties between January 1st, 2018 and November 15th, 2018. 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:

  • Sales were strong through the first 7 months of the year but then tailed off from August to present day. As we stand right now, we are at 61,981 sold DSF and ASF. When the final November and December numbers come in, I believe this will be the first year we decrease in sales in the last 5 years. I predict we will end around 68,000 or 69,000 homes sold.
  • Of the 61,981 sold properties DSF= 45,451 and ASF= 16,530
  • The price range with the most sales is between $350,000-$400,000 with 9174 sales. This is up from last year when the most sales were 300K-350K.
  • The biggest month for closed sales was June. This means the properties went under contract in April and May.
  • Total sales for 2017 71,086 – 52,057 DSF, 19,029 ASF
  • Total Sales for 2016 62,886 – 45,790 DSF, 17,096 ASF
  • Total Sales for 2015 60,745 – 43,571 DSF, 19,904 ASF
  • Total inventory remained at record lows for the third year in a row. However, August had the most homes available to buyers at 12,821. Compared to 2017 when the high-water mark was 12,777 in July 2017.

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 669 active properties on the market in this price range. The high-water mark for active properties in this price range was 750 in September. This tells us that the sales of these homes have picked up in the last 60 days.
  • There were a total of 2200 active listings in this price range in 2018
  • 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

$1,000,000 – $1,500,000

Sold

  • There have been 1532 sold in this price range year to date.
  • There were 1378 sold in this price range in 2017
  • There were 963 sold in this price range in 2016
  • This data tells you that about 139 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 5 months of inventory.
  • The most sales are occurring in the following areas:
    • 474 in Denver in 2018 – 414 in Denver in 2017
    • 64 in Castle Rock in 2018 – 72 in Castle Rock in 2017 *
    • 48 in Greenwood Village in 2018 – 47 in Greenwood Village in 2017
    • 151 in Boulder in 2018 – 77 in Boulder in 2017 *
    • 66 In Littleton in 2018 – 43 in Littleton in 2017
    • 45 In Parker in 2018 – 34 in Parker in 2017
    • 37 In Lone Tree in 2018 – 21 in Lone Tree in 2017
    • 20 in Cherry Hills Village in 2018 – 8 in Cherry Hills Village in 2017*
    • 31 in Englewood in 2018 – 25 in Englewood in 2017
    • 46 in Highlands Ranch in 2018 – 31 in Highlands Ranch in 2017

$1,500,000 – $2,000,000

Actives

  • There are currently 336 active properties on the market in this price range. This is up considerably from this time last year. The high-water mark for active properties in this price range was 385 in September.  You’ll notice the number of homes for sale drops by 50% when you move just 500,000 dollars higher in price range.
  • There was a total of 880 active listings in this price range in 2018
  • There was a total of 850 active listings in this price range in 2017
  • There was a total of 800 active listings in this price range in 2016

$1,500,000 – $2,000,000

Sold

  • There have been 458 sold in this price range year to date.
  • There were 440 sold in this price range in 2017
  • There were 315 sold in this price range in 2016.
  • This data tells you that about 42 homes a month sell in this price range. This means you have 42 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 8 months of inventory.
  • The most sales are occurring in the following areas:
    • 132 in Denver in 2018 – 129 in Denver in 2017
    • 17 in Castle Rock in 2018 – 24 in Castle Rock in 2017 *
    • 31 in Greenwood Village in 2018 – 24 in Greenwood Village in 2017
    • 65 in Boulder in 2018 – 29 in Boulder in 2017 *
    • 16 in Littleton in 2018 – 19 in Littleton in 2017
    • 18 in Parker in 2018 – 9 in Parker in 2017 *
    • 9 in Lone Tree in 2018 – 9 in Lone Tree in 2017
    • 19 in Cherry Hills Village in 2018 – 13 in Cherry Hills Village in 2017
    • 9 in Englewood in 2018 – 9 in Englewood in 2017

$2,000,000 – $2,500,000

Actives

  • There are currently 134 active properties on the market in this price range. The high-water mark for active properties in this price range was July with 165.
  • There was a total of 350 active listings in this price range in 2018
  • There was a total of 320 active listings in this price range in 2017
  • There was a total of 290 active listings in this price range in 2016

$2,000,000 – $2,500,000

Sold

  • There have been 165 sold in this price range year to date.
  • There were a 155 sold in this price range in 2017
  • There were 117 sold in this price range in 2016.
  • This data tells you that about 15 homes a month sell in this price range. This means you have 15 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:
    • 60 in Denver in 2018 – 47 in Denver in 2017
    • 10 in Castle Rock in 2018 – 9 in Castle Rock in 2017
    • 8 in Greenwood Village in 2018 – 8 in Greenwood Village in 2017
    • 12 in Cherry Hills Village in 2018 – 8 in Cherry Hills Village in 2017
    • 1 in Englewood in 2018 – 1 in Englewood in 2017
    • 23 in Boulder in 2018 – 8 in Boulder in 2017 *

$2,500,000 – $3,000,000

Actives

  • There are currently 96 active properties on the market in this price range. The high-water mark for active properties in this price range was June with 125.
  • There was a total of 230 active listings in this price range in 2018
  • There was a total of 220 active listings in this price range in 2017
  • There was a total of 200 active listings in this price range in 2016

$2,500,000 – $3,000,000

Sold

  • There have been 102 sold in this price range year to date.
  • There were 63 sold in this price range in 2017
  • There were 47 sold in this price range in 2016.
  • 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:
    • 32 in Denver in 2018 – 13 in Denver in 2017 *
    • 10 in Greenwood Village in 2018 – 0 in Greenwood Village in 2017 *
    • 10 in Cherry Hills Village in 2018 – 9 in Cherry Hills Village in 2017
    • 9 in Boulder in 2018 – 5 in Boulder in 2017
    • 7 in Castle Rock in 2018 – 3 in Castle Rock in 2017

$3,000,000 – $3,500,000

Actives

  • There are currently 55 active properties on the market in this price range. The high-water mark for active properties in this price range was June/July with 71.
  • There was a total of 130 active listings in this price range in 2018
  • There was a total of 102 active listings in this price range in 2017
  • There was a total of 97 active listings in this price range in 2016

$3,000,000 – $3,500,000

Sold

  • There have been 41 sold in this price range year to date.
  • There were 48 sold in this price range in 2017
  • There were 32 sold in this price range in 2016
  • 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 14 months of inventory.
  • The most sales are occurring in the following areas:
    • 13 in Denver in 2018 – 7 in Denver in 2017 *
    • 3 in Greenwood Village in 2018 – 3 in Greenwood Village in 2017
    • 8 in Cherry Hills Village in 2018– 6 in Cherry Hills Village in 2017
    • 0 in Englewood in 2018 – 1 in Englewood in 2017
    • 4 in Boulder in 2018 – 5 in Boulder in 2017
    • 2 in Castle Rock in 2018 – 2 in Castle Rock in 2017

$3,500,000 – $4,000,000

Actives

  • There are currently 48 active properties on the market in this price range. The high-water mark for active properties in this price range was June with 51.
  • There was a total of 88 active listings in this price range in 2018
  • There was a total of 100 active listings in this price range in 2017
  • There was a total of 60 active listings in this price range in 2016

$3,500,000 – $4,000,000

Sold

  • There have been 21 sold in this price range year to date.
  • There were 26 sold in this price range in 2017
  • There were 12 sold in this price range in 2016
  • This data tells you that 2 homes a month sell in this price range. This means you have roughly 2 qualified buyers a year that can and will purchase a home in this price range. The absorption rate in this price range shows about two years of inventory.
  • The most sales are occurring in the following areas:
    • 7 in Denver in 2018 – 6 in Denver in 2017
    • 3 in Cherry Hills Village in 2018 – 8 in Cherry Hills Village in 2017 *
    • 1 in Englewood in 2018 – 0 in Englewood in 2017
    • 0 in Greenwood Village in 2018 – 1 in Greenwood Village in 2017
    • 2 in Boulder in 2018 – 2 in Boulder in 2017
    • 1 in Castle Rock in 2018 – 1 in Castle Rock in 2017

Conclusions:

  • So, what do we make of this year’s Luxury Market? If you are scanning the report and you see a * next to any city that indicates that the area either had a significant increase or decrease in sales. For example, we were hearing antidotal stories about sales struggling in Castle Pines Village and Castle Rock in the Luxury Market and some of the statistics we see above bear that out to be true. Fewer sales in the one to two million range for sure in Castle Rock and sales are flat in the even higher price ranges. Denver and Boulder continue to be on a tear gaining the most luxury sales for the second year in a row. Typical luxury strongholds like Cherry Hills Village and Greenwood Village had a good year and predictable with the three-year trend line. You read in the opening paragraph about how sales were down beginning in August and through the date of this report. Luxury was hit even harder with a 44% drop in sales from September to October. Even after the election sales really did not pick up. Typically, consumers get conservative in an election year so sales dropping off in the three months leading up to the election is nothing new. If the market doesn’t respond strongly in the next 45 days this will be the first year in 5 years, we see a decrease in sales in the metro area. We’ll have to see how that impacts luxury.
  • For the third 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. Almost 50% 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!
  • Our prediction for 2019 is as follows: Slow start in Jan, Feb, and March. We’ll have a pretty good spring/summer selling season, but it will not be as good as in years past. Once we get into late July and early August there will be a market slow down across the US. This will be a slight correction in the market. Could be as much as 10% or as little as 2%. I know that’s a bit of broad range, but my crystal ball is a little foggy at the moment. When selling your home this year choosing the right Realtor will be more important than ever. Great marketing will make the difference in whether you get the highest price in the shortest amount of time. Teams like ours that sell 70-100 homes a year is who you want to list your home with. Full-time real estate professionals like the Colorado Dream House will make all the difference in the world. Gone are the days of sticking the sign in the yard and getting an instant offer. We may even see homes sit on the market for a while which then may trigger one or two price reductions in order to get them sold.
  • Inventory has been a big problem for the last four years or more. Last year we talked about inventory being an issue for years to come not only in Denver but around the nation. Active available homes will still be a problem in 2019 but not as bad as in years past. This will be the first-year buyers will see some relief and some choices in the market. If you are a buyer pay close attention to the early parts of April and May with inventory reaching its peak in June. Luxury inventory should follow a similar trajectory as the last two years.
  • The Federal Reserve has been saying they are going to raise interest rates one more time before the end of the year, but now I think that is up in the air. Given the results of the election and split government, I think Fed Chair Jerome Powell may back off the one more rate hike promise. Some among the Fed believe the economy will slow down as a result of split government and adding another interest rate hike may bring the economy to a halt. Other economic factors like the tariffs with China will surely play a role in 2019 although the tariffs are hurting the Chinese economy to a much greater extent than the US economy. Italy’s potential bankruptcy, the UK’s split from the EU and general unrest in the middle east will all play a role in the overall big picture. All of the above-mentioned affect real estate.
  • The positives for Denver are the continued population growth, low unemployment, diverse job sector, and foreign investment. Many foreign investors according to Bloomberg news are looking at second-tier cities like Denver, Dallas, and Philadelphia as better long-term investments instead of large metros like NY, Chicago, Miami, and LA because those cities are so overpriced. Denver is still netting around 30,000 residents a year making it a top destination for people looking to move. I predict the mass exodus will continue out of California (last numbers I heard were about 100,000 a year leaving California) and into the western states. Places like Reno, Salt Lake City, Phoenix, and Denver will continue to see a population boom along with jobs, consumer spending and a big need for real estate. Although Amazon did not pick Denver as its second headquarters don’t be too disappointed, we’ll fair just fine without them.

 

We hope this data gives you some insight into the market and some strategy about possibly what to expect in 2019. 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 2018. 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