Written by Gretchen Rosenberg, President and CEO of Kentwood Real Estate
In Colorado’s overheated real estate markets, one notable sector that has benefitted from our current frenzied climate is the luxury sector. Two years ago, homes over $1 million were plentiful and sellers often had to reduce their price to get an offer. Our supply shortage was primarily in the mid-to-low-tier price ranges. At the time, we generally saw 4-6 months of inventory on the high end, providing buyers time to make their decision.
As people today are focusing on a revised set of housing needs, many are turning to the upscale housing sector for the space and features that will fit a new lifestyle. In a recent Luxury Market Report, the Institute for Luxury Home Marketing (ILHM) said:
“In a snapshot of 2020, despite the devasting effects of the coronavirus pandemic, the luxury real estate market has seen one of its strongest years since 2008. In comparison to experts’ predictions in early 2020, it is remarkable how significant demands for property type, location, and amenity preferences have changed amid the pandemic.”
Our Colorado lifestyle has provided those seeking Denver real estate and Fort Collins real estate with a new opportunity to work from home and a growing interest in having extra space for things like virtual school, working out, and a designer kitchen to cook more meals at home. The desire to own a home that can meet these needs continues to increase. Additionally, record-low mortgage rates are creating opportunities for homebuyers to stretch their legs into higher price points or even expand their real estate portfolios. The ILHM report continues to say:
“Experts believe that the demand for exclusive residential properties outside the metropolitan areas will continue well into 2021; even with the introduction of vaccines, the pandemic is far from over.
For those who have moved to the suburbs and beyond, moving back to the city full time is unlikely while the work from home trend remains. Many of these affluent homeowners are now making their secondary properties their primary residences for the foreseeable future.”
If you’re interested in buying a home this year, it’s helpful to understand that our Colorado luxury home market is finding buyer interest nearly as intently as our mid-tier market is. Be prepared to put your best foot forward when making an offer. Sellers should look to maximize their pricing by placing effort on the prepping and staging of the residence prior to putting it on the open market.
Javier Vivas, Director of Economic Research at realtor.com, notes:
“Interestingly, markets, where new supply is improving the fastest, tend to be higher priced than those that have yet to see improvement, suggesting sellers are more active in the more expensive markets.”
Good to Know
With rates still bouncing along the bottom, it’s good to know that you can buy more by leveraging your purchase. If you’re hoping to buy the luxury home of your dreams, this could be the year you achieve that goal.
At Kentwood Real Estate we’re especially equipped to handle the purchase and sale of any luxury residence along the Front Range. We stand ready to help guide you through the complexities of our current real estate markets. Search for your next home at Kentwood.com and let us know how we can help!