With luxury home sales in the Denver area skyrocketing since autumn of last year, there is a very important question left to ask: when will the area run out of real estate? According to a recent article by the Denver Business Journal, that limit might be coming sooner than some people realize. Then again, it might be further away than even experts suspect. Here’s a look at some of the possibilities and some guesses into the future of Colorado’s luxury market.
The luxury real estate market saw an increase in home sales throughout the last quarter of 2014, with the months of October, November, and December all posting a higher number of sales than the same months a year earlier. Furthermore, the sales didn’t decrease as normal when the holidays approached, marking a break from the norm. This high-selling trend has continued into 2015, with 33 luxury homes sold in January. That marks a raise from 29 luxury properties sold in January 2014. With so many homes already sold and luxury real estate representing such a significant investment, some experts are wondering how much space there is left in the Denver area for these sales.
How Many Homes are Left?
The biggest fear that Denver-area realtors have is a simple matter of numbers. If there are so many luxury homes in the region getting sold, that means that those houses that have just left the market aren’t likely to see a change of hands again anytime soon. If that’s the case, there will simply come a time in the near future when there won’t be many properties to sell. Before coming to a conclusion on that, though, you have to consider what the properties are being used for. Not all luxury homes get bought with the intention of becoming permanent homes for the new owner. These homes might be purchased as rental or part-time properties or even as speculative real estate for buyers trying to play the market.
How Much Space is Left?
The other thing to consider is whether the interest in luxury properties will continue even after the available properties have been bought up. If there is demand, it’s quite likely that an increased supply might follow. This could come in the form of people buying land and then building their own luxury homes or in the form of an existing neighborhood or subdivision creating more properties to appeal to would-be luxury homeowners. One of the many natural resources that Colorado has is land, and that isn’t likely to change in the near future.
The exact nature of the changing Colorado market is impossible to nail down, although it is certain that people who have been waiting for an opportunity to buy a luxury home in the Denver area should probably act sooner than later if they hope to take advantage of a currently available property. Just because the existing houses are starting to run out, however, doesn’t mean that supply will stay small. If people are interested in luxury living in Colorado, the region will almost certainly change to accommodate that desire.