Ten years ago, homes that sold for one million dollars or more represented 3% of the central Denver market (map). Today, they represent 32% of the market. It’s irrational that journalists and Realtors continue to use this arbitrary price point as the benchmark for the “luxury market”. You would be hard pressed today to purchase even a lot in East Wash Park for $1 million. Obviously, as homes appreciate even more, the percentage they represent will continue to grow and the benchmark will become even less relevant.
Defining the luxury market as a percentage rather than a hard number makes more sense and will stand the test of time. We divided the market of sold, central Denver homes from the past year into tenths and charted them. For fun, we added what the market looked like 10 years ago.
Today the top ten percent of the market starts at $1,730,000, or $1mm more than ten years ago. If 10% seems too stringent of a definition for the “luxury market”, then perhaps 20% is a better metric, which currently begins at $1,325,000. Whichever percentage is right, using a percentage rather than a hard number is far more logical and relevant.
For those of you who are detail oriented and/or just curious, we posted the “Keeping up with the Joneses” chart (click here) on our website that shows the market by percentage point. If you have an idea of your home’s value, you can see where it compares to the rest of the market. Of course, if you are not certain about your home’s value, we are happy to provide you with a line item adjusted comparative analysis.