Along with many other Denver area residents I have enjoyed visiting the annual Parade of Homes, supported by the Home Builders Association of Metro Denver. As a Realtor®, I am of course professionally interested in the products, styles, and vision offered by some of the areas best custom home builders. Therefore I noted with interest the announcement in today’s newspaper of the 2009 Parade of Homes. The 2009 event will be held at McKay Shores, a high end development in Broomfield, a suburb northwest of Denver. Home prices from 1 million to 1.5 million, down somewhat from recent years. Reading the announcement led me to a curiosity moment. Knowing that million dollar plus homes are not flying off the shelves, I looked at the sales of homes in the 2007 and 2008 Parade of Homes, and then at the current available inventory of similarly priced homes.
Oops!
It appears that the very cool, extremely well designed and well built custom homes showcased in both the 2007 and 2008 Parades are not selling well. Some of the 2007 homes are now owned by the banks that financed them, and I am told that showing activity on the 2008 Parade is very slow. Seems we like to look, but do not (or cannot) want to buy.
There are 1,940 homes for sale in Metropolitan Denver priced between 1 and 3 million, the recent target prices for the Parade homes. 38 such homes sold in the past 30 days. That amount of inventory divided by that amount of sales indicates a 4.25 year supply of homes in the 1 to 3 million price range.
A much as I enjoy visiting new million dollar homes, I must question the wisdom of next years Parade. What banks are going to finance the construction, especially in light of sales at the past 2 events? Which builders really want to showcase their product, risking the embarrassment of their best not selling?
Why?
While it is probably too late to alter the 2009 event, I respectfully offer a thought on future events. Build really nice showcase products that are obtainable by the above average buyer. Make them very functional, use the best products, make them green and energy efficient. 2000 to 3000 well designed square feet, with space for 2 cars and some toys (and a plug for electric cars). With a four year supply of million dollar homes, the building community may need to rethink.
Written by Larry D. McGee, Denver Realtor - Visit Website
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Ann Connelly 10.27.08 at 9:44 am
I agree with you about the Parade of Homes. My own neighborhood has an oversupply of brand new houses with price tags of well over $1,000,000. I blame some of the builders, sellers, agents ( they know who they are) who encouraged this kind of trend for their own profit. No thought was given to the integrity of the neighborhood or what would happen if those new megamansions did not sell. Now, even pre-owned homes aren’t selling and when they do, it will be for far less than one would hope for. We certainly need some kind of market price correction in my neck of the woods. I would move to Park Hill in a minute, if I could sell my own home (which won’t be possible for quite some time). You can tell I have a serious problem with what is happening here.