The Denver metro area’s luxury real estate market experienced tremendous growth over the past decade. In 2022, 876 properties sold for at least $2 million— a 700% surge since 2013.
The average price for all homes in the Denver metro increased by 121 percent from $306,00 to $678,000 in that decade and redefined what’s considered a luxury home.
Sales of homes priced at $2 million or more exploded during the pandemic, says Collen Covell with Milehighmodern.
“People could work remotely. They had come here for vacation and when they didn’t have to be in the office, they could buy here.”
Jill Schafer with Kentwood Real Estate says several areas, including Cherry Hills Village, Greenwood Village, Boulder, Denver, and Castle Pines, generate the most high-dollar sales.
Schafer says limited availability caused by development restrictions caused Boulder home prices to explode.
Those restrictions pushed more luxury development north into Longmont, Lafayette, Mead, Niwot, and Water Valley in Windsor, she says.
Who are Denver’s luxury buyers?
Covell divides Denver’s luxury buyers into two camps.
Half relocate from more expensive markets on the East or West Coasts and have money to spend.
The rest are Denver area buyers who experienced significant life changes, such as retirees who raised their kids in the suburbs but now want a smaller, more luxurious home in Cherry Creek or younger families with a second or third child who need a bigger house with a large yard.
Schafer says that Denver’s economy remains strong and diversified, with oil and gas, telecommunications, biosciences, and medicine employees earning high salaries.
“We have high rates of college educated people who tend to make more money.”
Rising interest rates don’t deter luxury buyers
Stuart Crowell with LIV Sotheby’s International Realty says Denver’s luxury marketing is mainly impervious to rising interest rates and inflation.
“The days on market has held pretty steady,” he says. “We haven’t seen much softening at this price level. Sellers are willing to wait longer to get their price.”
Because most luxury buyers are cash buyers, they aren’t as affected by fluctuating interest rates, Schafer says.
“Many of these buyers have money because stocks went up during COVID and buyers weren’t spending money on other items,” she says. “Now they realize they can work anywhere and are willing to spend more on second homes.”
What luxury buyers want
Like homebuyers at other price points, luxury buyers want to purchase properties they can use immediately without waiting for renovations.
“Luxury home buyers want a move-in ready home. They want all the features you see in new construction,” Schafer says.
Covell says older luxury homes that need to be updated will likely sit on the market longer, and buyers may demand more concessions.
“During the past couple of years, sellers got used to not having to make everything bright, shiny and new,” she says.
“Now you really have to make the house shine. Buyers have more choices and are willing to take more time to find what they want. They either want new construction or remodeled homes that feel new.”
The news and editorial staffs of The Denver Post had no role in this post’s preparation.
Source: Read Full Article