Most news reports define the luxury real estate market as homes over $1 million, which seems rather arbitrary to us. Homes over $1 million in Central Denver, Cherry Hills Village, and Greenwood Village during the past 12 months account for 20% of all sales. Instead of assigning an arbitrary fixed number, we looked at the top 10% of the market by year, and here’s what we found:
As you can see, in 2012 the top 10% of the market began at $917,000. This year it starts at almost $1.5 million, and the average sale price for the top 10% has grown from $1,539,000 in 2012 to $2,252,000 today.
The median price is the middle price of the top 10%, or another way of thinking about it is, it’s the beginning price of the top 5% of sales. The distance between the median price and the average price shows that there are some very high end sales that skew the average price up. For example the top 1% of the market in 2018 starts at $3,350,000 and tops out at $8 million.
If your home value isn’t in the luxury market, you may find consolation in knowing that your home has probably appreciated faster than the luxury homes. Across all three measurements in the above graph, luxury prices have increased by about 50% during the past six years. Comparatively, the market as a whole for Central Denver, Cherry Hills Village, and Greenwood Village has increased by about 130%.