Did you know that WK Real Estate was the area’s first real estate firm to become a member of Luxury Portfolio International® (LPI), the marketing program for distinctive properties with Leading Real Estate Companies of the World? As such we are part of a global network that enables us to provide unprecedented exposure and marketing reach for some of the most distinctive homes in our local area.
First quarter 2020 data for Boulder and Broomfield counties indicates that the local luxury market started the year strong. 2019 was a record-breaking year and that momentum carried into the first quarter of 2020. Sales of properties priced over $1 million were the highest first quarter sales on record at $241 million. There were 43% more units sold in Q1 2020 compared to the same quarter in 2019 totaling 36% more in overall sales volume for properties over $1 million.
WK Real Estate earned the distinction of the highest first quarter transaction since 2015 with the $7.4 million sale of Flapjack Farm by associates Liz Benson and John Hoeffler. As of this writing there were 10 active properties over $5 million. One of those properties, priced at $6.75 million, is under contract and went under contract after only 7 days on the market! The highest priced current active listing is in Longmont at $9.85 million and has been on the market for 481 days.
Looking at 2020 first quarter data, absorption rates tell us what the Boulder/Broomfield area market can handle in terms of luxury market inventory, and it’s really a tale of two markets. In the first quarter homes over $1M sold at a rate of 48.7 homes per month, with the majority of those sales in the $1-2M range and sold at a rate of 39 homes per month. The average home in that range took 3.7 months to sell, while homes priced from $2-3M took a little longer to sell averaging 5.5 months on the market. Keep in mind that anything under 6 months is considered a seller’s market, and 6-7 months is considered a neutral market.
The tough tale in our local market story is for those homes priced over $3M which, according to first quarter stats, took an average of 16.7 months to sell. This metric reflects a market segment where buyers have considerable control. Further proof of this is in the statistics for the month of April 2020 where there were 30 homes total put under contract, 27 or 90% of those in the $1-2M price band, only 3 or 10% of those in the $2-3M price band, and none over $3M.
The shockwave of the coronavirus pandemic hit the Boulder and Broomfield luxury markets much as it has elsewhere. For the month of April, our market felt the full impact of the stay-at-home orders as significant restrictions were placed on home marketing and selling activities. Compared to the same month in 2019, new luxury listings were down almost 52% and properties put under contract were down over 63%. Industry experts predicted that most markets would fall 50% or more across all price points.
There are many reasons for luxury markets to stagnate across the country right now. As industries contract jobs are lost, and stock market declines impact income and wealth accumulation. Lending criteria have also changed. The pandemic has especially affected areas with a high concentration of luxury listings, such as New York, parts of California, and other regions. Luxury listings continue to move slowly in those markets as we observe people exercise more restraint when it comes to luxury purchases overall.
Luxury retailers feel that the sentiment now is to be less ostentatious with consumption, more tasteful, and shift emphasis to those things that make us feel secure and contribute to a more comfortable lifestyle. In a recent interview with Stephanie Anton, President of Luxury Portfolio International (LPI) the Editor-in-chief of Luxury Daily Mickey Alam Khan predicted that affluent consumers would increasingly seek wellness amenities, homes as sanctuaries of health and vitality and would flee to second homes for lifestyle reasons.
Colorado as a state could see demand for “remote luxury”, especially in our second home markets. Michael Bloomberg just closed on the purchase of a home on the Western slope near Meeker for $44.67M. The estate sits on over 4600 acres of prime land for hunting and fishing, and offers a 19,000 square foot home as well as extensive guest quarters, a heli-pad and a four-hole golf course. The Boulder home priced at $6.75M that recently went under contract in just 7 days on market is small by comparison, but is described as a tranquil oasis in the city on an acre of lushly landscaped land with pool, separate guest house, and many other wellness amenities.
The Wall Street Journal reported on April 29, 2020 that the pandemic has not stopped some wealthy homeowners from listing their homes. While some such as spec builders do so out of necessity, others see this time as an opportunity to capitalize on a market with limited supply. Listing agents can use this quiet time to blast out exceptional, unique marketing to a captive audience. Zillow reported that listings over $10M were down 24.5% between March 1- April 22, 2020 compared to last year but online traffic jumped this April. People have had the time and opportunity to think about their current surroundings, consider how those surroundigs might not measure up to a new lifestyle that involves more working from home, the need for additional room for family members, and green or outdoor space as a respite.
The challenge for real estate professionals that list high end homes is how to activate people’s senses to fully experience online all that a home has to offer. Fortunately, at WK Real Estate we have many additional digital resources available for our high-end luxury listings through our affiliation with Luxury Portfolio International® (LPI). WK Real Estate received a number of honors at LeadingRE’s 2020 conference in Las Vegas, including one for luxury marketing. Through LPI WK offers fully narrated LuxeTour videos, beautiful property brochures and postcards that can be shared digitally, and additional re-targeting banner ads specific to luxury consumers. Additionally, LPI syndicates WK’s distinctive listings to websites across the globe, reaching viewers from 200+ countries and regions, providing unprecedented world-wide exposure.
Across the board statistics from April 2020 show there is a continued need for buying and selling in the Boulder and Denver metro area. We are still in a seller’s market even in the luxury segment, albeit under $3M. Buyers seriously looking to up-level their surroundings should not view this as a time for low ball offers. Whatever the need, WK Real Estate is here with expertise, experience and resources for the buyers and sellers in all price points, bringing your unique and best life home.
