Essentially, homes priced less than $700,000 are an incredibly hot commodity through much of Boulder and Broomfield counties. Well-priced and well-showing homes often have three or more offers just days after listing and the inventory is incredibly low.
But at some point – perhaps above the $900,000 mark – the market changes substantially, with homes selling at a much slower clip, and the available inventory giving shoppers the chance to find a home that really fulfills the majority of their expectations, said Joel Ripmaster, founder and president of Colorado Landmark Realtors, which specializes in the luxury home market.
“People are taking advantage of this, so that point has moved a bit,” Ripmaster said. “But the inventory levels for the higher price points are such that you still have selection.”
Ripmaster estimated that market inflection point was probably at $900,000 in July, an increase of perhaps $100,000 over the last six months.
“It’s a much more active market now (at the higher price points),” he said. In the first six months of this year, he said, there have been 21 sales of homes between $1 million and $1.9 million, a 26 percent increase in volume over that time period in 2012.
D.B. Wilson, managing broker at Re/Max of Boulder, said he believes the upper-tier market is rapidly tightening. Although the absorption rates, in terms of percentage of homes under contract, are lower in the higher-price ranges, they are also moving up, he said.
“As I look at Boulder County and single-family homes, there are 17 houses on the market under $150,000, 13 of which are under contract,” or 76.4 percent, he said. For homes between $200,000 and $249,000, that percentage is 64 percent.
The market remains tight until the $650,000 to $699,000 range, in which 36.4 percent of the homes listed were under contract. Between $850,000 and $899,000, that percentage slips to 30 percent, but between $950,000 and $999,000 the percentage climbs to 38.7 percent.
In the true luxury markets, that percentage is substantially less, but still shows significant strength, Wilson said. Between $1 million and $1.25 million, 35 percent of the listed homes are under contract, and between $1.25 million and $1.5 million, or 17 percent.
“I think that’s actually approaching an historical level,” Wilson said. “The other thing is when you are talking the $1 million to 1.5 million range, you are talking 2.8 percent of the total listings – so it’s a pretty small sample.
“The lower-priced stuff is kind of the engine that gets everything else started. Then you see these move-up buyers,” Wilson said. “I really think that’s what is happening this year.”
Beyond the numbers, the marked difference in inventory rates also has a dramatic effect on a buyer’s ability to find exactly what they are searching for in a home, Ripmaster said.
“As the existing home market dissolves, your choices dissolve,” he said. “The percentile buyer right now has to be $1.9 million and above. Above 85 percent you are going to find 85 percent of your choices – there’s no such thing as the perfect house.
“At the lower price points the percentile of finding exactly what you are looking for is a lot less,” Ripmaster added. “From $900,000 and under you are struggling – 65 percent. From there to $1.9 million, you probably get 75 percent.”
Even so, the market is still extremely enticing above the $900,000 level, experts said – enticing enough that the move-up market should be squarely in play this year.
“Are there good buys out there? Yes, there are,” Wilson said. “But you’ve still got to be realistic.
“You can shoot for the moon, but don’t shoot for Jupiter.”