Letter: Real estate market caters to the wealthy
After reading the article, “2019 set market records” in the Steamboat Pilot & Today, I came away with some interesting tidbits.
- More than half of the available real estate listings in the city go for $1 million and above.
- “The one advantage that we have over almost every other mountain resort community in Colorado is that we have land.”
- The real estate market caters to the wealthy.
- The average price for all properties in 2019 went from $522,000 to nearly $651,000, the largest average price increase that has ever been recorded for Steamboat Springs.
- The average sale price for a single-family home is $1.3 million.
- Lack of inventory is one of the most pressing concerns for the Steamboat real estate market and one byproduct of low inventory is higher prices.
- “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.”
- Half of the buyers in Steamboat are from out of town.
- 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.
- “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 price of an average single-family home in Steamboat appreciated 17% in 2019.
Oddly, the term affordable housing never came up in the article, although it may have been alluded to. It seems that if one has enough wealth then any house is considered affordable.
The widely accepted definition of affordability is that the buyer pays no more than 30% to 35% of their income on their mortgage payment. The comments from the article seem to suggest we have enough land, so all we have to do is build more $1 million houses and affordable, single-family homes will materialize.
We have tried this approach for 20 to 30 years, and it has failed. Why would contractors take the risk of building affordable homes when more profit can be made catering to the wealthy?
Since we are in a tourist-based economy of speculative home building/selling we need to surmount those barriers by bringing land or funds to the housing market to create affordable single-family homes for local individuals and families. When will development support the very community it uses to make its sale pitch to its wealthy customers?
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