Routt County real estate market up 4.2 percent to $441.5 million as of September
November 25, 2015
Steamboat Springs — The end of September marked the end of the third quarter in the Routt County real estate market, and Melissa Gibson, of Land Title Guarantee Company, reported that, while September dollar and transaction volume couldn't quite match the ninth month of 2014, year-to-date gross dollar volume is up 4.2 percent compared to last year, increasing to $441.5 million, and transactions are up 3.7 percent.
"September was another good month, with $58.9 million in gross sales and 133 transactions," Gibson wrote in her monthly market analysis. "This is off compared to last September, but you may recall that (September 2014) included two large sales of almost $30 million."
The third quarter year-to-date dollar volume of just over $441.5 million marks the highest total since 2008, when it was more than $597 million, according to Land Title's research. A year later, the recession had cut Q3 volume by more than half.
Realtor Jon Wade, of The Steamboat Group and Colorado Group Realty, recently observed some notable similarities between the 2014 and 2015 markets thus far. During both years, the local market got off to a slow slow start in the spring, but turned the corner into positive territory in June. And uncannily, there were 175 pending sale contracts at the beginning of July in both 2014 and 2015.
"Looking forward, the signs are positive, with 192 pending contracts," Wade wrote for his Nov. 11 market report.
Wade said Wednesday home values are showing strong increases up to prices of $1.5 million. However, for single-family homes within the range of $1 to 2 million, year-to-date transaction volume is down from 18 sales in 2014 to 11 in 2015, even as the average price within that range has grown from $1.36 million last year to $1.6 million in 2015. That can be attributed to people moving up to more expensive homes, as well as an increasing proportion of sales topping $1 million attributable to new product.
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However, total dollar volume in the range just over $1 million has fallen from $24.5 million to $17.6 million as of early this month; Wade attributes that trend to a shortage of homes in what he describes as a sweet spot between $1 million and $1.3 million.
"In the previous year, virtually all of the volume had been in that range," Wade said. "A good portion of the location neutral (professionals) I bring here are in that range."
Wade said he thinks new constructions in subdivisions such as Steamboat Barn Village and Wildhorse (the Range) could generate new product in the sweet spot of just over $1 million. However, he also believes rising values this year could result in more existing homes coming on the market, and buyers may be more open-minded as to what will meet their wants and needs.
"A home that was $900,000 in the spring is probably worth over $1 million now," he said. "It needs to be a good home that makes sense, but it doesn't have to be a perfect home anymore. There is a definite shortage in this range, and people are willing to do a more significant remodel than in the past."
Gibson reported one of the most active price ranges for residential transactions, both in September and throughout the year, has been housing between $300,000 and $500,000. The 32 sales within that range in September accounted for 37 percent of transactions, and with an aggregate value of $12.2 million, they accounted for 27 percent of dollar volume. Year-to-date, the 187 sales in that range accounted for 29 percent of transaction volume and $71.15 million in sales, or 22 percent of the total.
Wade said if one were to look back over three years at a variety of sales in that range, one would likely find the category of housing that can be bought for $400,000 or $500,000 has undergone significant change.
Three years ago, home seekers could get a fairly good selection of houses in town. Now, it's almost certainly out of town.
“It went to townhomes with garages in town, and now it's almost limited to condos in that range," he said