The single-family luxury market – $1.2 million to $2 million – and the ultra-luxury market – $2 million-plus – markets are showing renewed strength. Although inventory levels are high, sales have been stronger over recent months. Luxury buyers appear to understand that the market has bottomed out; but because of the high inventory levels it continues to be a good time to buy. However, the feedback from luxury clients is that while inventory levels are high, the selection of quality homes with top finishes is very limited. They are not finding what they expect in much of what is being offered.
Louisville and Boulder continue to lead the market with strong sales at almost all price points. Both of these markets have lots of property under contract and limited inventory. Lafayette, Longmont and the suburban plains continue to see good sales activity below $750,000 and inventory is limited. Superior and Broomfield have strong sales below $500,000 with a shortage of listings. Sales in the suburban mountains have continued to languish with most of the activity below $500,000 and very weak activity at the upper price points.
Based on what is currently under contract, it appears that the balance of 2013 will be a bit slower, but still good. We expect higher interest rates to continue to impact buyers, because they reduce how much home a buyer can afford. Current rates are historically low, but many of today’s buyers were not in the market when 8 percent was considered an acceptable rate, thus they are cautious about moving forward with their purchase decision.
Will the market be better next year? Based on what we know today, it is not likely that 2014 will exceed this year’s sales volume. Higher interest rates, higher home prices and limited inventory will likely moderate sales activity. I anticipate that next year will be good, but just not as good as this year.
Should I buy or should I sell? It continues to be a seller’s market. Home prices have been increasing and the shortage of inventory has some buyers making their purchase decisions faster. Higher interest rates will have an impact on how much buyers can afford. The upside: Higher rates will slow how quickly home prices rise.
If you would like to sell, don’t wait. Now is the time. Go for it. It is not likely that the market will be better in 2014.
Buyers, if you want a new home, now is the time to act. Interest rates are historically low and home prices are rising. Don’t wait; the window of opportunity may not last much longer.
David W. Scott, principal broker at the Scott Group of Colorado Landmark, Realtors, can be reached at 303-588-8358 or email@example.com