Boulder Countys luxury home market embracing auctions for quick sales

Jeffrey Long wants to move to California. He wanted to move four years ago, but he failed to find a buyer for his home north of Longmont in unincorporated Boulder County, situated on 5 acres overlooking Terry Lake. So he kept the house on the market for another year, hoping for a bite. Then another.

Now, Long has turned to a North Carolina-based auction marketplace for high-end homes, Interluxe. Next weekend, thirty prospective buyers will be previewing the property and preparing for a June 5 online auction that Long hopes will push the price past the $1.25 million minimum bid.

Auctions, most often associated with foreclosed properties, are becoming more common among the wealthy looking to widen the pool of potential buyers, reduce time on market and ultimately fetch a higher price for their multi-million dollar homes.

"At those price points, you need a global audience," said Kevin Byrne, the listing broker on the property at 9722 Meadow Ridge Lane. "It's like selling something on Craigslist, where a few local people might see it, versus eBay, where it's open to everyone in the nation looking for that exact product."

In a million-plus dollar home, a seller typically receives two or three firm offers through the typical listing process, Byrne said. Properties listed on Interluxe receive 11 bids on average, according to company President Scott Kirk.

"We treat auctions for luxury properties a lot like auctions have been treated for wine, art and high-end automobiles," Kirk said. "Agents want to be able to market to buyers beyond the physical border of the market."

Interluxe is also reducing the amount of time it takes to sell a property. The auction itself runs a week or less: an initial 24 hours and then extensions to allow subsequent rounds of bidding. All told, Interluxe properties go from list to offer in 45 days.

In Boulder County, homes in the $1 million-plus range averaged 102 days on market in 2016, according to David Carner of Boulder's Liv Sotheby's International Realty. That's up a bit from 2015's 87 days, but the five-year trend is toward homes selling faster.

"The luxury market is exploding," Carner said. "In 2016, Boulder County had 416 properties sold; an 18 percent rise over the previous year (352), so we're looking at more and more properties (being sold) in the million-dollar plus market."

Part of that increase is due to the overall high cost of housing. An average home in the city of Boulder tops $1 million, so a high percentage are automatically in the luxury category even though "a million-dollar house in Boulder can be quite small," Carner said.

Longmont's luxury market is very different from Boulder's, according to Byrne. The area is beset by a supply-demand imbalance of a different kind. With 30 current listings and a historic sell-rate of one per month, there is a 30-month supply of luxury inventory. A healthy market would be closer to six to twelve months.

"We've got to limit the supply," Byrne said. "If you don't have to sell your house, you shouldn't have it on the market."

Still, Carner and Byrne said many sellers see auctions as a last resort. The upfront costs can be too steep for many to stomach: between $20,000 and $50,000.

For Long, it was worth it. A new grandchild is waiting for him and his wife in California, where they will be moving after their home sells. With more than two dozen buyers scheduled to view the property next weekend, Young is hopeful a sale is imminent. His only regret is not signing up with Interluxe sooner.

"It's startling how much interest it's gotten," he said. No matter what price the house ultimately fetches, "it's a lot better than sitting on it and waiting."