The inventory of ultra-luxury homes – with sale prices of $2 million or more – is growing. The number of luxury homes in the Boulder Valley that cost $1 million or more totals 230, ranging in price from $1.039 million to $16.9 million. Most of those homes are in Boulder, a city known as a great place to live and with price tags that reflect that fact.
About two-thirds of the $1 million-plus homes are in Boulder, said Ken Radtke, a broker with Keller Williams Realty in Boulder. The remaining properties are on the plains and in the foothills.
While inventory overall is down, Radtke said, “I am seeing more people starting to put those high-end houses on the market. They’ve started increasing again.”
While confidence in the economy is a key factor, a more important one is the available of jumbo loans.
“The key factor is the jumbo loans,” Radtke said. “They were nonexistent a year ago. You could not get them. The jumbo loans are back again, and that’s a key factor in this market.”
Colorado Jumbo Mortgage Loans are those that exceed conforming loan limits established by the two government-sponsored enterprises, Fannie Mae and Freddie Mac.
In Colorado, if you require a mortgage loan higher than $417,000 backed by a single-family property, you will generally require a jumbo mortgage. However, if the property is located in certain high-cost areas in Colorado, you will need a jumbo mortgage for a loan amount higher than $729,750 on a single-family property.
Fixed-rate mortgages within conforming loan size limits almost always get a better rate than comparable jumbo fixed-rate mortgages.
In recent months, lenders have relaxed their grip somewhat as the market has rebounded and home prices have soared. More ways to get a mortgage are in the offing, mostly for borrowers with solid incomes and strong track records.
Interest rates are expected to continue increasing, with some analysts saying 30-year fixed-rate mortgages could hit 5 percent in the next 12 months. Despite those increases, mortgage interest rates continue to reside near historic lows.
In the first six months of 2013, 68 luxury homes were sold in Boulder, ranging from $1 million to $3.15 million, according to Bruce Royer, a broker with Re/Max Alliance in Boulder and author of a monthly market update.
During that same period, in Boulder County, 86 luxury homes were sold. In May alone, 24 luxury homes sold in Boulder County at an average sales price of $1,514,920, Royer said.
Although Colorado has seen a recent resurgence in sold luxury properties, there still is no shortage of buying opportunities, Royer said. In fact, it’s a good time to buy now since more sellers are putting their properties on the market and interest rates on jumbo loans are still low.
The Boulder market is mirroring the Denver metro area. Luxury home sales and the median sale price of those homes in metro Denver, which includes Boulder and Broomfield counties, nearly doubled the number of a year ago, according to a new report by Coldwell Banker Residential Brokerage.
The figures are based on Multiple Listing Service data of all homes sold for more than $1 million last month in metro Denver.
A total of 139 luxury homes in the region sold in July, up 90.4 percent from a year ago when 73 high-end properties changed hands. On a monthly basis, sales jumped 24 percent from the 112 transactions in June.
The median sale price of a luxury home was $1.3 million, even with the median price a year ago and off slightly from June’s median price of $1,317,482.
The upper end of the luxury market continued to be extremely strong in July with 22 sales over $2 million, more than double the 10 multi-million dollar sales a year ago and up from 16 the previous month.
Two other key market indicators improved as well, with homes selling faster on average and sellers receiving a higher percentage of their asking price compared to a year ago.
“The luxury market in the Denver metro area continued to roll in July with no real signs of slowing,´ said Chris Mygatt, president of Coldwell Banker Residential Brokerage. “Often, July can be a little slower period with summer vacations and other activities, but we just didn’t see that this year. Buyer demand remains extremely strong, and although inventory has gradually increased, there’s been no problem snapping up the additional listings.”
While low inventory continues to be a defining factor, it is less so in the luxury market. Despite tight inventory, every community in the Boulder area experienced increases in average and median home prices. The high-end market is showing signs of increased strength and stability.
Miles Kunkel, a broker with Re/Max of Boulder who specializes in high-end homes in Boulder, said average sales prices in the luxury market “have gone up considerably” in the second quarter of the year. In addition, the average days on the market for those properties has dropped to 51.
Boulder neighborhoods with the strongest sales include Newlands and the Chautauqua area. Mapleton Hill is starting to take off as well, he said.
New home construction has become a greater part of the economic landscape, with starter homes flourishing across the Front Range and some custom homes beginning construction in subdivisions that were stagnant for the past few years.
Kunkel pointed out that a rare infill development of high-end homes will be under construction in the city of Boulder. A 23-home development is planned at the former home of the Boulder Junior Academy at the foot of Mount Sanitas. Moonbeam Boulder LLC, a Boulder-based company, is planning the development of single-family detached homes for the 5.84 acre parcel at 2641 Fourth St. The development, named The Trailhead, is in the area where the historic Mapleton and Newlands neighborhoods meet the open space around Boulder’s borders. The Mount Sanitas trailhead is on the property.