The real estate market is undergoing changes as interest rates rise and inventory drops. The submarkets are even more dynamic, often varying significantly by price point and location. If you’re interested in buying or selling in Boulder’s luxury market, I’m here to help you understand factors that you may want to take into consideration. The luxury market in Boulder is one of the most stable in the nation, showing resilience every step of the way. For a deeper understanding of how the luxury market as a whole is faring, here are some insights:
It’s Still a Seller’s Market
According to data provided by the Institute for Luxury Home Marketing, all metrics suggest that the luxury market remains advantageous to sellers. This is primarily due to the lack of inventory, which continues to persist across most areas of the country. Interestingly, demand for homes is also down. Sales are nowhere near the level that we saw in the first quarter of 2022, which was likely the peak of the market for both demand and price. As we settle into the new normal, we can expect markets to behave differently by location. In areas where buyers are impacted by rising interest rates, demand is softening. Affluent areas with a higher percentage of cash buyers are less affected by the current economic conditions, and we’re seeing demand surge.
Luxury Home Building Trends
High-end buyers are increasingly interested in homes that offer an experience. Across the nation, luxury homes that are selling for the highest prices are ones that offer the following elements of design:
- Passive design. Passive building design principles emphasize energy efficiency combined with exceptional quality. Homes built with passive design utilize the property’s natural sources of energy, such as air pressure differences and sunlight.
- Biophilic design. Biophilic design is a trend that seeks to unite nature and humans. Think: ample green space, natural light, and natural finishes. This architectural approach is becoming highly sought after in numerous spaces, including both residential and commercial settings.
- Sustainability. Homes that are sustainably built have a leg up on the competition, as buyers in the luxury market are often environmentally conscious. Properties with a reduced carbon footprint and features such as natural or recycled materials are dominating this market in all corners of the country.
Interior Design Trends
In my series on luxury home design trends, I covered many of the interior design choices I’m seeing here in Boulder. Many of the same interior design principles are popular in the luxury market at large, including:
- Natural light. There’s an undeniable link between access to sunlight and mental and physical health. An abundance of natural light isn’t just aesthetically appealing–it’s also helpful for enhancing wellness.
- Air quality. Post-COVID, an increasing number of buyers are prioritizing air quality. Quality ventilation and air monitoring systems are in high demand, and will likely continue to be.
- Noise exclusion. In both the attached and detached markets, noise exclusion is a key element of interior design.
- Multifunctional spaces. In the luxury market, it’s not uncommon for each room to have a specific purpose. However, upper echelon homes are increasingly equipped with open and integrated spaces that are multifunctional.
- Smart home technology. It comes as no surprise that luxury homes are making the most of emerging smart technology. Data shows that properties with cutting edge features such as voice control, smart appliances, advanced surveillance, and air quality monitoring receive the most attention.
When comparing the year-over-year data, there’s some good news for both buyers and sellers. Here’s an overview of the luxury market on the whole, comparing August 2022 and August 2023:
- New listings are up. In a direct comparison between August of this year and last year, there were 1,498 more listings in 2023.
- Sales are down slightly. In August 2023, the luxury market saw 764 fewer sales than the same month in 2022.
- Median sale price is up. Despite the softening prices in the average market, luxury home prices are holding steady and even climbing a bit. Comparing the data from August 2022 and 2023, this year’s prices rose $70,500.
- Days on market rose just slightly. It’s a negligible difference, but homes stayed on the market an average of four days longer than the same time period in 2022.
The Bottom Line
Here in Colorado, we enjoy some of the best luxury homes in the nation. Three of the four markets with the highest median sales price are located in our state, including Aspen ($13,400,000), Telluride ($7,500,000), and Vail ($5,375,000). Here are the stats for Boulder County:
- The median list price for single-family homes sits at $2,150,000. The median sold price is $1,595,000. Single-family homes are considered a seller’s market.
- For the attached market in Boulder County, the median list price is $926,950. The median sold price is $895,350. Our attached market is also considered a seller’s market.
Times may be changing, but the luxury market in Colorado remains incredibly strong. Many areas of our state (Boulder included), benefit from limited inventory and a highly qualified buyer pool. Although Colorado’s market remains exceptionally strong, the luxury market is holding strong in many other areas, as well. The official market type for luxury homes nationwide is a seller’s market, with a 31.19% sales ratio. It’s also encouraging that high-end homes are selling for an average of 99.08% of list price. If you have any questions or would like an experienced realtor in your corner, I’d love to help.