Are Denver's Upper End Brokerages feeling the sqeeze?

2007

I was taking a look at the Upper end (Million Dollar Plus Denver Single Family Homes) housing market for Metro Denver and comparatively speaking, Denver's Million Dollar Plus market has only seen a slight edge down in pricing of just three (3) percent. The three quarter total sold average in 2007 was $1,622,550 and it looks like only a slight price dip to $1,568,801 for the first three quarters of 2008. Compared to areas in California, Nevada and Florida and soon New York, Metro Denver Million Dollar homes have fared fairly well.

The big negative numbers are really in the Denver Single Family sales volume and total housing units sold. Over all, the change in total number units sold is down 24% over all and the total sales volume is down almost 35%. That could explain that over all, the total days on market (DOM) has decreased overall from 161 to 156 days on the market. The 3 Million dollar and above Denver Housing market seeing a huge decrease for total days on market.

So it seems like the home owner equity is hanging in there. However, what I wondered was how much the Real Estate brokerage fees have dumped as a result of the 35% decreases in total sales volume. I used the recent Real Trends statistical average brokerage transaction commission of 5.1% and came up with $16,091,231 worth of real estate brokerage commissions. There you have it, about 16M of commissions into thin air! Thats a lot of cash to be absorbed by the high end real estate business community.

Based on 20-30% splits and 6% franchise fees....a whole lot less full page color newspaper advertising and color magazine inserts. Funny, the market conditions may actually help these companies dump the ego ads and go to where the buyers really are.