A few days ago I opined on my concern about the Denver luxury housing market. Granted my observations are anecdotal i.e. speaking with peers, eyeballing http://www.REColorado.com and looking at statistics including new listings versus those under contract and closed.
Well it seems the issues are worldwide. In yesterday’s Wall Street Journal there was an article about luxury home sellers dropping their asking prices. Granted, Denver does not have many listings in the $5M and up range, however our high-end market is witnessing an increase of listings.
The City of London, one of the most sought after markets of investors worldwide looking to shelter their Yuan, Ruble
s, Rand, Rupee’s and other currencies is also witnessing a slump in the upper echelons of the market. The following article from Bloomberg illustrates this as developers are offering 20% discounts for bulk purchases.
I also work in the New York City marketplace and I have noticed the upper-end of the market senses nervousness. Granted with the average sale in Manhattan hitting $1.7M, the upper-end is truly upper however most new developments are courting the deluxe and luxury buyer yet inventory seems to be providing a glut in the market as demand softens.
Denver is a unique market. We are NOT a world capital city. Our housing market usually does not gyrate the way some similar post-war city markets have including Las Vegas and Phoenix. We have a very stable employment base, a diversified economy and an enviable lifestyle. However we cannot assume events in other markets will not impact our local and regional marketplace.
Again time will tell and I am not suggesting we need to buckle up as the downturn is coming. Instead I hope some rationality comes back to the market and we avoid the snowball effect of increased inventory leading to a glut along all price-points.