2015 Luxury Real Estate Report

2015 Luxury Real Estate Report

As many of you know, this is the time of year when we are winding down, and I publish an “A Year In Review Luxury Real Estate Report.” We hope you will find this information helpful and some of the conclusions will be beneficial in your buying and selling strategies in 2016.

Let’s begin with a snapshot of the market as a whole (regardless of price). These numbers are based on January 1, 2015, through November 15th, 2015.

*Definitions: DSF = Detached Single Family. ASF = Attached Single Family i.e. condos, townhomes, etc. Absorption Rate = The speed at which homes are sold (absorbed into the market). The absorption rates quoted below include all of Denver and the surrounding suburbs. Absorption rates for your neighborhood could be lower or higher.*

Overall Sales Across Denver And All Surrounding Suburbs:

  • It appears as though it will be another record year for sales. So far, we stand at 52,380 sold properties (DFS and ASF combined). When the final November and December numbers come in, we believe the year will end around 58,000 or 59,000 total sales. Thus far, there have been 37,620 DSF sales, and 14,760 ASF sales.
  • Sales for 2014 were 57,135 total: 41,869 DSF, and 15,266 ASF
  • Sales for 2013 were 56,476 total: 44,739 DSF, and 11,737 ASF
  • 39,000 active listings came to market in 2015. 30,000 DSF and 9,000 ASF.
  • Total inventory remained low. The number of active listings on the market never got higher than 8,307 in the month of August. Since then, inventory has continued to decline and will continue through the remainder of the year into the beginning of 2016.

Luxury Statistic is broken down by $500K bandwidths. These statistics include Denver and all of the surrounding suburbs (the entire MLS).

$1,000,000- $1,500,000

  • There are currently 497 active properties on the market in this price range. The high water mark for active properties in this price range was in August.
  • There are a total of 1400 active listings in this price range in 2015.
  • There were a total of 1300 active listings in this price range in 2014.
  • There were a total of 1800 active listings in this price range in 2013.
  • There are 659 solds to date in 2015.
  • There were 579 solds in 2014.
  • There were 531 solds in 2013.
  • This data tells you that about 60 homes per 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 approximately eight months of inventory.

An important question in the $1,000,000 to $1,500,000 price range is, “Where are the majority of these sales occurring?”

254 in Denver, 46 in Greenwood Village, 34 in Castle Rock, 23 in Lone Tree, 22 in Highlands Ranch, 22 in Littleton, 19 in Cherry Hills Village, 18 in Englewood, and 18 in Boulder 

$1,500,000- $2,000,000

  • There are currently 282 active properties on the market in this price range. As you can see when you move just 500K in price range, the active properties dropped by 42.5%. The high water mark for active properties in this price range was during the months of June and July. 
  • There are 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.
  • There were a total of 710 active listings in this price range in 2013
  • There are 210 solds to date in 2015.
  • There were 191 solds in 2014.
  • There were 179 solds in 2013.
  • This data tells you that about 19 homes per month sell in this price range. The absorption rate in this price range shows approximately 14 months of inventory.

The majority of sales in the $1,500,000 to $2,000,000 price range are occurring in the following areas.

  • 86 in Denver, 23 in Cherry Hills Village, 22 in Greenwood Village, 12 in Englewood, 7 in Parker, and 7 in Castle Rock

$2,000,000- $2,500,000

  • There are currently 98 active properties on the market in this price range. The high water mark for active properties in this price range was during the months of June and July. 
  • There are 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.
  • There were a total of 290 active listings in this price range in 2013.
  • There are 59 solds to date in 2015.
  • There were 73 solds in 2014.
  • There were 61 solds in 2013.
  • This data tells you that about five homes per month sell in this price range. The absorption rate in this price range shows approximately 18 months of inventory.

The majority of sales in the $2,000,000 to $2,500,000 price range are occurring in the following areas:

  • 26 in Denver, 7 in Cherry Hills Village, 4 in Greenwood Village, and 4 in Castle Rock

$2,500,000- $3,000,000

  • There are currently 71 active properties on the market in this price range. The high water mark for active properties in this price range was during the months of June and July. 
  • There are 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.
  • There were a total of 240 active listings in this price range in 2013.
  • There are 35 solds to date in 2015.
  • There were 32 solds in 2014.
  • There were 35 solds in 2013.
  • This data tells you that about three homes per month sell in this price range. The absorption rate in this price range shows approximately 22 months of inventory.

The majority of sales in the $2,500,000 to $3,000,000 price range are occurring in the following areas:

  • 15 in Denver, 5 in Cherry Hills Village, and 4 in Greenwood Village

$3,000,000- $3,500,000

  • There are currently 40 active properties on the market in this price range. The high water mark for active properties in this price range was during the months of June and July. 
  • There are a total of 76 active listings in this price range in 2015.
  • There were a total of 53 active listings in this price range in 2014.
  • There were a total of 67 active listings in this price range in 2013.
  • There are 12 solds to date in 2015.
  • There were 9 solds in 2014.
  • There were 15 solds in 2013.
  • This data tells you that about one home per month sells in this price range. The absorption rate in this price range shows approximately 36 months of inventory.

The majority of sales in the $3,000,000 to $3,500,000 price range are occurring in the following areas:

  • 4 in Denver, 2 in Cherry Hills Village, and 1 in Greenwood Village

$3,500,000- $4,000,000

  • There are currently 26 active properties on the market in this price range. The high water mark for active properties in this price range was during the months of June and July. 
  • There are 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.
  • There were a total of 57 active listings in this price range in 2013.
  • There are 10 solds to date in 2015.
  • There were 12 solds in 2014.
  • There were 3 solds in 2013.
  • This data tells you that less than one home per month sells in this price range. The absorption rate in this price range shows approximately 28 months of inventory.

The majority of sales in the $3,500,000 to $4,000,000 price range are occurring in the following areas.

  • 5 in Cherry Hills Village, 4 in Denver, and 1 in Crested Butte

Conclusions:

1) We believe that 2016 will track fairly close to 2015 in the number of sales. However, we do not expect to see the same growth patterns in price appreciations that we saw over the last two years. We believe home values will begin to stabilize with more moderate increases.

2) We believe the FOMC (Federal Open Market Committee) will follow a very different interest rate policy in 2016. We anticipate a deviation from past performances of significant increases in one quarter, one half, or even greater percentages. We project small but systematic increases in order to remain under the radar and off the front page.

3) Ten years after the suburban sprawl began there has been an 180-degree shift in the market. The data shows that people are moving out of the suburbs and into the City and County of Denver. Sales in Denver this year were booming, and we are expecting more of the same in 2016. This translates to suffering home values for the luxury homes in Castle Rock, Parker, Sedalia and other suburban areas. Unfortunately, this also means that those homes not priced accordingly will take much longer to sell, costing home sellers more money.

4) The unemployment rate in Colorado is at about 4% right now, which is 1% below the national average of 5%. Job growth in Colorado remains strong, making it a national relocation hot spot. We anticipate this will continue in 2016.

5) The one important consideration for 2016 is that it’s an election year. Historically, we see people get very conservative during an election year, even more so in luxury real estate. People tend to put their hands in their pockets and make few major purchases until they know whom their elected officials are going to be and what direction they will take the country.

We think this just about sums it up. We hope that if nothing else, this data will give you a little insight into how many home sales are occurring each month in the various price points. It’s never as many as you think.

We hope that you have found this information useful. If there is anything you would like to discuss the market or your home, in particular, any one of our team’s expert advisors will welcome your call. We value your trust, and we thank you for your business. Have a blessed Holiday.

Sincerely,

Dan Polimino, Gary Lohrman & The Colorado Dream House Team

Dan Polimino is a Broker/Owner with the Colorado Dream House Team, Keller Williams Realty DTC. Contact the Colorado Dream House Team at 720-446-6325, Follow us on TwitterLike us on FacebookWatch us on YouTube,  Questions? 

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