There’s a glimmer of good news on the home sales front: the high-end market is picking up.
Between Jan. 1 and June 30, 14 homes priced at $1 million and up have sold in El Paso County. That’s compared to 11 homes sold at that price or higher in the same period of 2009.
In better news still, 391 homes priced between $500,000 and up were sold in the first half of the 2010, up 12.3 percent compared to the same timeframe last year, according to the Pikes Peak Association of Realtors.
The area’s highest-priced home was located at 2304 Stratton Forest Heights. The five-bedroom, five-and-a-half bath ranch, built in 2007, sold for $1.5 million, according to ReMax Properties’ managing broker Joe Clement.
As in many cases, the sellers had to reduce their asking price to find a buyer. The deal reflected a price reduction of almost $700,000, Clement said.
Of course, the supply of pricier homes is still high. As of June 30, there were 127 homes available in the million-dollar-plus market — about a six-year supply.
But brokers say those statistics don’t provide a fully accurate perspective on the luxury-home market.
“I have five contracts on my desk right now, all in various stages. Two are for over $1 million, two are over $600,000 and one is for less,” said Kevin Patterson of The Patterson Group.
Clement said he’s preparing to close a million-dollar-plus sale in early August, though he didn’t want to jinx it by talking about it.
Prudential Rocky Mountain broker Keith Hays said Prudential has sold 26 homes priced at $500,000 and up this year. He credits those high-end sales to “aggressive marketing combined with aggressive pricing by sellers.”
The effect is that business is picking up.
Marketing agents for the multimillion-dollar Broadmoor West Residences and Brownstones on the city’s southwest quarter also report interest is higher.
“We’re seeing more traffic, more showings, but it’s still hard to get a contract,” said Broadmoor Properties managing broker Michael Raedel.
In better times, his in-house brokerage team saw plenty of out-of-town visitors who stayed at The Broadmoor as part of corporate meeting groups. Today, at least 75 percent of hotel guests are leisure visitors — and they have more time than convention-goers to look around.
Most of those hotel-generated prospects are either looking for a second home or are retirees in search of a full-time residence.
The National Association of Realtors reported this spring that second home purchases were up by 7.8 percent nationwide.
“Many of the Broadmoor’s guests have been here before. They have the time to go deeper, to look around. … (With the economy still in recovery), they may be more interested in (Broadmoor Resort Community) condominiums in the $500,000-to-$600,000 price range,” Raedel said.
Patterson predicts it will be three to five years before the upscale market sees a full turnaround, while Hays is betting it could take up to seven years.
Either way, brokers say competition for buyers has never been higher. And some buyers are shopping bank-owned real estate first, hoping to buy at a discount.
A total of 2,079 distressed sales were recorded in the Pikes Peak region in 2009 and another 999 closed between Jan. 1 and June 30.
In this environment, custom builders will now build new for less than they would have charged three year ago, Patterson said.
“With the 10- to- 20-percent price reductions some million-dollar sellers are giving, buyers are basically buying the house and getting the lot for free,” he said.
The average custom-home sales price per square foot is down, from highs of $300 to closer to $200 per square foot.
So it’s still pretty challenging out there.