Home sales in the Denver and Boulder metropolitan areas in a price band just below $1 million — what independent Realtor Gary Bauer calls Signature Properties — surged in October.
A report released today by Bauer on homes priced from $750,000 to $999,999, showed that sales soared by 69 percent on a year-over-year basis. The dollar volume was up by 70.6 percent.
Last month, buyers bought 71 Signature single-family homes, compared with 42 in October 2011. Sales also jumped by 16.4 percent from the 61 that traded hands in September. Typically, for seasonal reasons, sales slow on a month-to-month basis during the fall.
“October was a very, very good month for Signature homes,” Bauer said. “It was really strong.”
Indeed, it was stronger than he had anticipated.
One reason, he said, is that a trend seems to be growing in which young families put their children in the school of their choice and don’t immediately worry if their home is close to the school.
In the past, parents often would move to be in a better school district or closer to the school, but increasingly Bauer has noticed people choosing the school first.
“I don’t know what you would call this group of people and I don’t have a name for this type of buyer,” Bauer said. “In the past, people tended wanted to be in their new home before the start of the new school year, but now many people don’t seem to be worried about that.”
That also helps to explain why sales picked up from September.
“We are operating outside of historic norms,” Bauer said.
Also, he said he has been told that an increasing number of investors are starting to snap up homes in the Signature price range. “I haven’t confirmed that, but a number of people have told me they are seeing that happen.”
Investors are likely being drawn to this price range for the same reason as owner-occupants.
“Many of these homes would have traded at $1 million or more at the peak of the market,” Bauer said, so buyers see value in them.
Another factor that may be boosting sales in this price range is consumers shifting their investments from equities to housing. The stock market took a beating right after the presidential election and some people may see buying a home as a safer investment, as well providing the benefits of home ownership that are not purely financial.
Well-qualified home buyers also can take advantage of mortgage rates still hovering around historic lows.
“If you listen to many of the experts or read some of the recent (investing) literature, there is a lot of conversation about moving away from just the stock market to diversify your investments,” Bauer said. “One of the first alternatives is housing. I would say some of that is going on, but how much remains to be seen. We will have to wait to see if it is really taking place.”
In October, buyers paid $60.1 million for Signature properties, compared with $35.2 million in October 2011 and $51 million in September.
The average price per square foot for a single-family home was $267, up 6.4 percent from $215 a year earlier and a 1.5 percent increase from September. The average price per finished square foot was $201 in October, a 5.8 percent increase from $190 in October 2011 and up 1.5 percent from September.
Year-to-date, 715 Signature single-family homes have sold, a 30 percent increase from the 550 in the first 10 months of 2011. The dollar volume of $606.6 million, is 30.6 percent higher than the $464.6 million in the first 10 months of 2011.
Meanwhile, three Signature condos sold in October, compared with two in October 2011.
Through October, 56 Signature condos have sold, 69.7 percent more than the 33 during the same period in 2011. During the same period, the dollar volume for condo sales rose 69.3 percent to $47.7 million, from $28.2 million, through October. Bauer uses Metrolist data on home sales in 11 counties — Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park. The top five counties for Signature sales in October were Denver, Arapahoe, Boulder, Douglas and Jefferson.
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