High prices, cash sales dominate Routt County’s real estate market in 2021
In an industry filled with upbeat professionals focused on making housing dreams come true, it is no exaggeration when real estate experts say home prices in Routt County are as expensive now as they have ever been.
“Prices are at an all-time high,” said Marci Valicenti, a real estate agent for 20 years and a 30-year resident.
“It’s the most competitive market that we’ve ever seen from a buyers’ perspective,” said Doug Labor, a local real estate agent for 24 years and general manager of Steamboat Sotheby’s International Realty.
Melissa Gibson, branch manager at Land Title Guarantee Co. in Steamboat, said the average residential price of a home in Routt County has increased from $568,000 in 2016 to $1.1 million in November 2021.
“Year to date, we are at an average residential price of $1,100,024 — a 27% increase over 2020 and an 85% increase since 2017,” Gibson said. “No matter how you dice the numbers, the average price is the one thing you can’t argue: Prices have increased dramatically.”
Of the 2,027 Routt County home closings processed in 2021 through November, local buyers represented 49% of closings, Front Range buyers 25% and out-of-state buyers 26%. Gibson said that ratio of buyers stayed much the same before and during the pandemic.
“The difference may be the number of people moving here and not buying as second homes,” Gibson said. “We are definitely seeing a big influx of people moving here from all over the U.S. — New York, L.A., Chicago, Florida and Texas — many wanting to make Steamboat home because they can work remotely. Because of this demand, our inventory has dropped to all-time lows, which has dramatically driven up prices.”
Labor clarified that the number of listings is the lowest since his mined data reaching back to 1995.
For inventory in 2021, Labor said the fourth quarter in the Steamboat Springs MLS data showed 305 total housing and land listings across Routt County, compared to 574 in fourth quarter 2020 and 945 in fourth quarter 2017. That represents a 68% drop.
Another Routt County real estate trend that continued in 2021 was an increase in the number of multiple cash offers by buyers and final cash sales.
“Because the market has been so competitive, cash offers are more attractive to sellers. More buyers are paying cash with some buyers intending to mortgage the property later,” Labor explained.
He’s not the only one who’s noticed that cash carries.
“Prior to 2020, some months did run closer to 60% financing and 40% cash on average, but some months were still a 50/50 split,” Gibson said. “It has definitely been more consistent 50% or more cash sales since COVID, with the last year seeing some months with 60% cash.”
Rebecca Gould, mortgage lender at Mountain Valley Bank in Steamboat, also agreed that 2021 continued to see a large segment of real estate transactions purchased by cash buyers.
“This trend squeezed out buyers who are utilizing financing for their purchase,” Gould said. “Particularly, the first-time homebuyers and buyers who have lower down payments simply could not compete as they watched prices increase over the year.”
The family-run Valicenti Team, through Colorado Group Realty, recently listed a condo in Steamboat with a set cutoff deadline of six days in order to limit the volume of offers to consider.
Cutoff deadlines were not a common practice in past years. However, the condo received 10 offers, six of which were cash, and went under contract on the sixth day, Valicenti said.
Realtors say the market is still the tightest for single-family homes.
Historically, multi-family homes including duplexes, townhomes and condos have been more available and affordable, but the local market has experienced declining housing inventory for years, brokers say.
Traditionally, areas in Routt County outside the city limits of Steamboat have been a better bet for modest buyers, but prices for single-family homes in the county subdivision of Steamboat II, for example, are breaking records.
Two recent sales of Steamboat II homes topped out at $850,000 in November and $910,000 in mid-December for a home originally built in 1981 with a remodeled kitchen and bathrooms, Valicenti noted.
Realtors continue to point potential buyers looking for more attainable options to Hayden, Oak Creek, Stagecoach and near Clark.
Valicenti said 2021 continued the COVID-encouraged trend in which “people realized that (their) home was never more important.”
Reprioritizing led home buyers to look for better outdoor spaces at home, more room for home offices and residences outside larger cities.
Valicenti said she worked with one family who came skiing in March 2020, “and they never went home.” The family stayed in their condo in Steamboat and sold their house in Florida.
Successful homebuyers in Routt County in 2021 had to be quick and decisive as homes sold much more quickly than usual. Buyers often competed against multiple offers, cash offers and some offers above asking price.
“There is a learning curve to this market. Buyers sometimes aren’t ready to do what it takes. They have to lose a few times before they understand what it’s going to take, especially in a multiple-offer situation,” Valicenti said.
Home prices are not anticipated to drop in 2022, but price accelerations could slow, Labor said.
Experts say limited inventory will continue to be a problem, with a complicating factor being most area home builders continue to focus on constructing higher priced homes.
“The current and foreseeable future of low inventory has and will continue to have an effect on our market and prices,” said Ulrich Salzgeber, CEO of the Steamboat Springs Board of Realtors.
Labor said a bellwether he uses to monitor the real estate market is absorption rate, which is the balance between supply of listings by sellers and demand to purchase by buyers.
In 2021 Labor recorded an unprecedented high absorption rate of 414%, which is the highest he has seen since 1995. That means buyer demand is the highest it has been in 26 years in Routt County, Labor said, noting the prior highest absorption rate was 194% in 2020.
Prior to the pandemic, the average absorption rate was a more balanced 74% for the previous 24 years, Labor said.
To reach Suzie Romig, call 970-871-4205 or email sromig@SteamboatPilot.com.
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