26 Aug Jon Cartu Says: Uptick in luxury sales shows signs of promising real estate…
FRISCO — There’s no doubt the pandemic had a negative effect on Summit County’s real estate market, but a strong luxury market appears to be on the horizon.
For March and most of April, state public health orders prohibited showings and open houses. Economic uncertainty among buyers and sellers led to anxiety among Realtors, who didn’t know how long the situation would last. As a result, Realtors reported grim numbers in April and May.
The market experienced a 59% drop in gross volume in April 2020 compared with April 2019. In April of last year, there were 166 total transactions in the county compared with the 92 transactions in April 2020, according to Land Title Guarantee Co.’s April market report.
According to numbers from Summit Realtors, there were just 69 total real estate sales in May, a dismal number compared to the 178 sales in the same month of 2019.
Brooke Roberts, director of sales and marketing at Land Title, said she considered April to be the “dead month.”
“Everything that closed in April was from March,” she said.
March would be a better indication of luxury sales performance in the past year, Roberts said. Overall, the gross volume dropped 2% in March 2020 compared to March 2019.
As for luxury sales, 21 homes priced above $1 million were sold in March 2019 while 29 homes in the same price range were sold in March 2020.
Coming off April’s intense drop in sales, Realtors were worried about the future. However, Gov. Jared Polis signed the safer-at-home executive order May 27, allowing showings and, later on, limited open houses. Since then, the market seems to have begun to bounce back.
The results are “shocking,” Roberts said. In mid- to late June, she and other Realtors saw a large uptick in sales, especially for luxury homes.
May numbers are already promising for the real estate industry. Thirty percent of total sales in May 2020 were at or above $1 million, Summit Realtors President Dana Cottrell wrote in an email. In May 2019, only 19% of total transactions were at or above $1 million.
There’s a number of reasons for the success in sales, Roberts said. Primarily, people who can afford luxury homes are itching to get out of the cities where avoiding the virus is difficult.
“The luxury folks evidently still have the money,” Roberts said. “They didn’t lose their jobs, or they didn’t take a pay decrease, or they want to invest their money in real estate instead of the stock market.”
Places like Summit County have always provided an escape for professionals. However, this year is different. More and more employers are embracing the work-from-home lifestyle, and professionals feel they can do their jobs from anywhere.
“I think they’re focussing on the quality of life,” Roberts said. “They want to be in a ‘safer’ place where they have activities that are free, and they’re able to do with their families.”
If the trend in people wanting to live far from where they work continues, the market will strengthen, Cottrell said.