Denver Luxury Home Report 2013
Given the active inventory and the rate at which homes have recently sold, if no other homes came on the market, it would have taken only four months to consume November’s available inventory of detached single family homes over $850,000 (the top 10% of Denver’s market by sold price). The graph above shows how well the luxury market has performed this year compared to 2012. National Association of Realtors calculates that 6 months of inventory is a balanced market; under 6 months is a seller’s market.
Improving numbers across the board
The improved absorption rate is not only being driven by lower inventory, but by higher demand. 31% more luxury homes sold this year than in 2012, and the bargaining power of sellers on average increased 2.4% as buyers gobbled up homes that were on the market for almost half of the time compared to the previous year. As a result the median price increased 4.3% to $1.1mm.
The luxury home market in Denver took the brunt of the hit from the downturn in our economy and will recover much slower than the lower priced market. We expect to see continued gradual improvement through 2014. That’s great news, but we still have a ways to go as the median price for homes over $850,000 in 2007 was $1.22mm.