Steamboat Today: Running out of space

Archive for Sunday, February 4, 2007

By Tom Ross Sunday, February 4, 2007

Steamboat Springs — Doug Labor recalls a client who came to town in late December looking for a three- to four-bedroom house offering a den and 3,000 to 4,000 square feet. He couldn't find what he wanted in his price range.

It sounds like a familiar story until you consider the clients were willing to spend as much as $1.6 million.

"They were looking for a functional house," Labor recalls. They are set on Steamboat, and I showed them six to seven homes."

Frustratingly, he couldn't match them with a home. It's indicative of changes in the market - both in price and inventory.

Labor is a Realtor with Buyers Resource Real Estate in Steamboat. He also is the official keeper of statistics for the Steamboat Springs Board of Realtors.

The Steamboat market enjoyed a record year in 2006 with properties on the Steamboat Springs Multiple Listing Service producing sales of $676 million compared to $605 million in 2005. When the total number of sales was tallied, Steamboat's market crested $1.1 billion.

Yet, there are prospective homebuyers with $1.5 million to spend, who cannot find what they want.

The median price of residential property here was up 27 percent to $337,961, with condominium sales outnumbering sales of single-family homes.

The median price of a single-family home last year, representing a home price that was exactly in the middle of the range, was $660,000. That compares to $650,000 last year.

However, if you plotted the entire range, one could expect to see a large number of sales clustered right below that median price.

Part of the challenge with single-family housing inventory inside the city limits, Labor said, is the scarcity of new product, and that shortage is driven by a limited supply of building lots.

The number of land sales here last year was down 46 percent from 97 in 2005 to 53 in 2006. At the same time, the median price of a land purchase rose from $415,000 to $477,500, Labor said.

"It just puts more pressure on existing product," Labor said.

Norbert Turek, with Elk River Realty, said the upward pressure on single-family housing is a result of two very different factors.

First, he said, Steamboat is essentially landlocked, and largely by its own design. A commitment to containing urban sprawl, which Turek confesses he enjoys, is cutting off new subdivisions.

The second trend involves people in the building trades in Steamboat who acquire properties and remodel them as part of their business plans.

"End users (permanent residents) here aren't competing with the second-home buyers. They're competing with contractors," he said.

Turek said it's not out of the question that Steamboat will stop growing.

"You can't have a town that's 95 percent built out and not have prices going up like crazy," he said.

The first 32 of 41 new single-family building lots in Wildhorse Meadows were snapped up this fall and closed by the end of the year or shortly after at prices close to $500,000.

The last filing in the Sanctuary was on the verge of selling out this month.

Additional lots will come on the market in Steamboat Barn Village, and Ski Time Square Enterprises has plans to develop a new subdivision near the Sheraton Golf Course offering 17 lots.

"That might be the last great subdivision that can happen in Steamboat (city limits)," Labor said.

Turek pointed out that it has been six years since West End Village, the last workforce housing subdivision in the city, was approved. Lots there sold for less than $100,000.

How long before the phenomenon of people purchasing modest houses to tear them down to acquire a building lot becomes commonplace?

In a tear-down situation, Labor said, the price of the lot with a structure on it becomes the land price. So, if you bought a very modest Old Town home for $400,000 and demolished it, you would probably need to build a structure valued at three times that amount to achieve a good business proposition.

Based on those numbers, new single-family homes on small lots in Old Town would soon approach values of $2 million.

- To reach Tom Ross, call 871-4205

or e-mail tross@steamboatpilot.com

nightbird ( anonymous ) says...

This article confirms what Scott Ford's editorial highlighted. We are running out of space and the law of supply and demand will preclude future working families' ability to live here.

"The first 32 of 41 new single-family building lots in Wildhorse Meadows were snapped up this fall and closed by the end of the year or shortly after at prices close to $500,000."

This I guess is great news for the developer. But it should not be viewed as good news for the community.

I am all for the free market, however, government intervention with the creation of urban growth boundaries has created a serious shortage of supply and this action has short circuited the free market. This situation was created by the well-intended and widely supported government policy and it must be resolved by an equally well-intended government action. We should not fool ourselves into the belief that the free market will resolve this problem on its own unless the urban growth boundries are relaxed.

Simple put this is a land use issue. We need to preserve land for affordable housing just as we have preserved land for open space. Just as we preserve open space with the goal of future generations being able to enjoy it we need to preserve land for affordable housing so future working families can raise their kids can stay in the community. I agree we do need to do this before it is too late.

February 6, 2007 at 12:06 a.m. ( permalink | suggest removal )

bigdog ( anonymous ) says...

I know, why doesn't the government just confiscate property from the 'rich' landowners and give it the the 'deserving' public. Maybe you should consider moving your sorry butt to Valenzuela .

Government, the answer to all of our ills....

February 6, 2007 at 5:38 a.m. ( permalink | suggest removal )

nightbird ( anonymous ) says...

Oh Big Dog
No need to make this discussion personal. If you are interested in an honest dialogue great! If not, that is OK, it is your choice. So if you want to continue please tone down the babble. Focus on the facts. This means no more comments about my "sorry ass" and suggesting I move Venezuela. I will not insult your intelligence if you agree to reciprocate. Deal?

We have an affordable issue simply because as the citizens of this town (us) wanted to preserve open space and agricultural landscapes. The urban growth boundaries have created a shortage of available "dirt" for housing within the city limits and the immediate area. As a result over time the available building lots were developed and housing inventory declined and the price of what is available has skyrocketed as demand increased.

Without the urban growth boundaries housing subdivisions would be spreading like weeds in the south valley and west of Steamboat Springs. If that were allowed to happen we would not have an affordability issue because inventory and price would be in balance. We would also have a valley floor full of subdivisions.

The challenge here is that we need to take a longer-term view. Just as we made the decision to preserve open space to protect for the future, we need to do the same with land for affordable housing. Do you view the affordable housing issues as a land use issue or as something else?

February 6, 2007 at 4:27 p.m. ( permalink | suggest removal )

kielbasa ( Matthew Stoddard ) says...

My heart is bleeding for all the $1.5 million spenders who can't find a 3000 to 4000 sq. ft. home that works for them. Where's my violin?

February 6, 2007 at 4:29 p.m. ( permalink | suggest removal )

bigdog ( anonymous ) says...

Nightbird, I am tired of most everyone wanting the government to solve their issues. We are a free society only as long as we are self sufficient.

As to the "land" issues, i see it as a supply & demand issue. If there is not enough supply, the price goes up. If people are wanting cheaper land, then they need to go to a market that has a greater supply. If the government steps in and "gerrymanders" with the supply, it will create a false and unsustainable economy.

Sorry for the soap box speech.

February 7, 2007 at 6:47 a.m. ( permalink | suggest removal )

id04sp ( anonymous ) says...

"We have an affordable issue simply because as the citizens of this town (us) wanted to preserve open space and agricultural landscapes. "

Well, you got what you wanted. Lack of forethought in the past has resulted in massive profits for "outsiders" who came in and took advantage of a tight market.

Congratulations on the "view." Instead of having to drive 2 or 3 miles out of town to see it, now lots of people have to drive in a couple of hours from other places to see it because they will never be able to afford to live here.

February 7, 2007 at 7:02 a.m. ( permalink | suggest removal )