Almost twice as many people toured the Denver Parade of Homes that ended on the Labor Day weekend than last year, top housing officials said today.
“The traffic through the parade about doubled from last year,” said Jeff Whiton, president and CEO of the Home Builders Association of Metro Denver, the sponsor of the parade, which showcased homes throughout the metro area.
“I’d say we had close to 100,000 people go through it this year, while last year it was in the low 50,000s,” Whiton said.
The parade was the largest in its 26-year history. A total of 28 builders showcased 72 homes throughout the metro area. Homes ranged in price from $182,650 to $1.25 million.
The number of homes on the tour was only 12.5 percent higher than the previous record of 64 homes in 2011. The parade began on Aug. 9. For the third consecutive year, it was a “scattered” showcasing homes from Longmont to Castle Rock and Aurora to Central City. The parade was free this year, while in past years, when the parade was held in a single community, there was a charge.
“We would have had even more homes in it, but a number of new-home communities were just coming on line and couldn’t be ready in time for the parade,” Whiton said.
A shortage of resale homes, a demand for the latest in design and green features, and low interest rates all played roles in such a huge increase in traffic this year, Whiton said.
The number of resales on the market is down more than 40 percent from a year ago. As previously reported by InsideRealEstateNews.com, in the first seven months of the year, builders in the metro area have pulled 48 percent more permits than during the same period in 2011.
“I think the builders have been very responsive in bringing the kind of homes to the market that consumers want and that has been very well-received,” Whiton said.
“We are seeing strong growth throughout the region in a variety of price points, Whiton said. “I think more folks are looking to a new approach to homes. People are finally able to sell their resale homes and are able to move-up to a new home.”
He also said mortgage rates hovering near historicl lows are are driving people to new homes, and spurred people to drive to the parade homes.
“These are just generational low mortgage rates and they are here at a time when we seem to be seeing a little bit of improvements in the value of real estate,” allowing consumers to sell their existing homes, Whiton said.
Earlier, some home building officials had predicted about 70,000 people would visit the parade this year.
“We exceeded the projections by a huge margin,” said local housing consultant S. Robert August.
August said that preliminary figures indicate that this year’s parade could be the largest ever, depending on how attendance is measured.
“I think we had in excess of 100,000 adults attending the parade and if you count the kids, this could have been one of the biggest ones ever – if not the biggest, it probably is the second or third largest,” he said.
According to the HBA, the largest ever was in 1995 in Polo Reserve and Meadowbrook in Littleton, when the event drew 141,326 visitors. The second largest was in 1998 in Lowry, when 131,577 attended. Both of those tallies included children, August said, who has been instrumental in marketing, promoting and advertising the vast majority of the parades in the area since they were launched.
This year, a lot of the high-end communities, such Shea Properties’ BackCountry in Highlands Ranch, and Celebrity Custom Homes in Lone Tree, did exceptionally well in drawing people, August said.
“All of the builders I talked to were very upbeat and were very bullish,” August said.
However, not everyone on the tour is looking to buy a home, he said.
“A lot of people are looking for remodeling ideas,” August said. “This a chance to see the latest and greatest features. A lot of people will take those ideas homes and incorporate them into their existing homes. I think we are going to see a big jump in remodeling homes this fall.”
However, it is a goal of many consumers to eventually buy a new home, he said.
“People buy a new home for its design and energy saving features, but other factors in that equation include the school district and the proximity to employment centers and shopping,” he said. “For a lot of people, when they consider everything, they would rather live a new home than a resale home.”
At the lower-end of the new home market, the tight apartment market is helping new homes, he said.
“Apartments are just about at capacity,” August said. “A lot of renters aren’t going to stay renters for two or three years. They will save their money and buy a home as the economy improves and they become more secure in their jobs.”
With rising rents and mortgage rates so low, the after-tax cost of owning a home may be very close, or in some cases, less expensive, than renting, he said.
Independent real estate broker Gary Bauer, who likely will release a report later this week on the resale market based on Metrolist data, said the surge at the parade is great news.
“This is really great to hear,” Bauer said. “I think a lot of people will always want to own a new home. We never had the over-building of new homes as some other markets, but at the same time in Denver we are not afraid to scrape an existing home and replace it with a new home when the demand is there.”