2019 real estate market sets records for Steamboat — but it’s not good news for modest earners
There are only 24 single-family homes under $1 million for sale right now in Steamboat
STEAMBOAT SPRINGS — It’s unrealistic to find a single-family home in Steamboat Springs for under $300,000, according to local industry experts. That’s partly because nearly more than half of the available real estate listings in the city go for $1 million and above. And those that are cheaper are mostly small condominiums.
But that doesn’t mean it can’t change.
“The one advantage that we have over almost every other mountain resort community in Colorado is that we have land,” said Ulrich Salzgeber, CEO of the Steamboat Springs Board of Realtors.
That land provides for mixed developments to pop up, such as the future West Steamboat Neighborhoods and recent Sunlight community.
For the time being, though, it’s looking as if the local real estate market will continue to cater to the wealthy, especially after setting multiple high-dollar records in 2019.
“After nine straight years of a higher supply than demand, over the last three years, the market has seen the opposite with more demand than supply,” explained David Baldinger, Jr., broker and owner of Steamboat Sotheby’s International Realty. “With supply not meeting demand, one would expect prices to increase, which is seen by the sharp increase in average price.”
The average price for all properties in 2019 went from $522,000 to nearly $651,000, the largest average price MLS, or multiple listing service, has ever recorded for Steamboat. The 2019 median price was $419,000, also the highest on record. The average sale price for a single-family home is $1.3 million.
“The Steamboat real estate market is complex and extremely varied, based on a multitude of factors,” Baldinger said.
There was “significant movement” in home sales in 2019, according to Salzgeber. Those sales were either from people with ski condos aging off the slopes or people simply deciding the market was still good to sell. But it’s his belief that since many of those occurrences have been absorbed, they won’t be as aplenty in 2020.
According to the Steamboat area MLS, which lists all homes for sale as entered by real estate agents, there were only 276 active listings at the end of 2019. That’s the lowest it’s been by far, according to Steve Goldman, CEO of Colorado Group Realty in Steamboat.
Lack of inventory is one of the most pressing concerns for the Steamboat real estate market. One byproduct of low inventory is higher prices.
“It’s like avocados — if they have a bad season and they don’t farm as many avocados out in a year, the price of avocados goes up,” Salzgeber said. “That’s what we’re seeing right now.”
It’s the same situation in most other Colorado resort markets and across the country.
Part of the reason, Salzgeber said, is the higher costs attributed to homebuilding.
“Some builders are at less risk building a million-dollar home because there’s more profit margin built in than building a $300,000 or $400,000 home,” he said. “There’s more profit; there’s less risk.”
There also aren’t too many contractors currently working on homebuilding, he explained. That has to do with overwhelming regulations on the construction industry, he said. “They get stricter every year.”
“Steamboat is a very desirable place and a lot of families want to make it home, but there’s not a lot of great options,” Goldman admitted.
Half of the buyers in Steamboat are from out of town. They’re looking to buy something different from what single families want, he explained.
“You have a very big group that is looking for a luxury house or you have a lot of people who are just looking for a ski condo,” Goldman said. “The locals, they’re looking to raise families here — they’re really looking for under the $1 million price range that doesn’t really exist.
“The locals are the ones who are struggling the most,” he added.
Currently, there are only 24 single-family homes under $1 million for sale in Steamboat. Condos are available in Steamboat in the $300,000 range, but they offer far less space in addition to reoccurring homeowner association fees. Those looking for a reasonably priced single-family homes are forced into the Hayden, Oak Creek and Stagecoach markets, he said.
While homes under the $1 million mark become harder to find, luxury home sales have increased. In 2019, there were 150 home sales over $1 million, which is up from 100 sales just three years ago. There’s also excess supply in homes selling for $2 million and above, so those buyers are getting good deals, according to Goldman.
At the same time, the price of an average single-family home in Steamboat appreciated 17% in 2019.
“I continue to see younger families trying to move here, and of course, the challenge is how do we make sure that the people who work here in town have the ability to live here,” Salzgeber said.
2020 outlook and other factors to consider
Overall, the local real estate market in 2020 and 2021 look as if they’ll be relatively similar to 2019, according to Goldman. That’s barring any huge impacts to the economy.
The 2020 election will have an effect on the year’s housing market, according to Salzgeber.
“Generally, in an election year, the market slows down,” he said.
Recession fears haven’t really played into the higher home prices, according to Goldman.
While the start of 2019 saw supply increasing, price appreciation slowing and homes staying on the market for longer, everything changed in the last four months of 2019 and activity picked up, Goldman said.
November and December saw twice as much volume as the previous couple years, he said.
“Interest rates went way down, the stock market began racing upward at the end of year, so I think recession fears got pushed aside at the end of the year,” he said. “But they could come back quickly.”
Goldman predicts sales volume to be up 5% in 2020 with home prices going up by another 5% to 10%.
To reach Bryce Martin, call 970-871-4206 or email bmartin@SteamboatPilot.com.
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