If you have followed my column for a while now, you would know that I represent a fair amount of luxury properties and their sellers. I hear a lot of rumors about the luxury market and given the economy, most of the information I hear is negative. Being both a journalist and a realtor, I decided that it was time to do the right thing and investigate the issue for myself.
Over the last several months, I have been hearing horror stories about there being 5 years, or 10 years, or 12 years of luxury property inventory on the market. After a little investigation, I did not find that to be true. Let me say that as of the day that I am writing this column, I am using data that was pulled from Metrolist, and then applied a simple absorption rate equation to determine the supply of inventory. As criteria, I looked at all the homes over one million dollars in a particular city, and looked at the sales from the last 12 months. With that disclaimer out of the way, here is what I have found.
Cherry Hills Village has less than two years’ worth of luxury homes on the market. Greenwood Village has less than two years of inventory on the market. Lone Tree has exactly two years’ worth of inventory, and Denver has only about 15 months. To some, this may seem like a large supply, but in reality, given the market, it’s not and here’s why. First off, total inventory across Colorado is very low right now and has been for the last several months. There are at least three good reasons for this: 1) Distressed properties are getting bought up. 2) Some people have decided not to sell their home. 3) Building new homes has slowed considerably over the last several years. There’s also another reason to be optimistic. We are just beginning our prime selling season. So while more homes will come on the market, more will also get sold.
Finally, I did find some market with more inventory than others. Overall, parts of Douglas County can have up to three and half years’ worth of inventory. It really doesn’t matter if you are in an area that has two years’ worth of inventory or three because in this market, every seller needs to be smart with their pricing. Your home will sell. You have to find a way to make your home stand out in the crowd.
Next week, we’ll talk about how you can make your home shine for every showing.