How is the Denver market doing? Building on good news relayed this week by one of our nation's leading Economist, a new report on luxury homes sales in Denver shows sales up 26% over last year at this time according to insiderealestatenews.com. Why is this important and why are we seeing million plus dollar home sales of late? It is important because it shows high end buyers are getting back into the market andexhibiting confidence in Denver real estate that this level of buyer hasn't shown in the years past.
Another big reason for more luxury sales of late can be attributed to more money becoming available. One would think that with these super low interest rates, buyers would be scooping up these luxury homes as quickly as possible since the difference between a payment at 6% verse 4% could easily be over a thousand a month. The problem is that jumbo loans, those loans typically over $420,000 disappeared once the credit crunch hit.
The good news is that they are back. In the second quarter of this year, jumbo lending rose 30%. J.P. Morgan Chase home lending unit has increased jumbo lending by 146% in the first six months of the year and Wells Fargo has increasing their jumbo lending by 47.5% during the same time. Small, local banks are lending as well and tend to be the easiest to secure a jumbo loan.
What does all this mean? It means the wealthiest portion of Denver is regaining confidence in our market and now that money is becoming easier to obtain, it is actually being spent. A trickle down effect from the luxury market to the lower price markets has happened in the past, so here is to hoping history repeats itself.
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