Nowhere to call home: Buyers struggle in Steamboat’s ‘unprecedented’ real estate market
Already low inventory and high demand has been accelerated by COVID-19 and being allowed to work from home
STEAMBOAT SPRINGS — Ed Allbright remembers when buying a house in Steamboat Springs only cost $400,000 or $500,000. Enter the overly affluent — and over the past year, remote workers — and the average price of a home with an 80487 zip code now hovers over $1 million.
That’s troubling for Allbright, who recently relocated to Steamboat to begin a new career. He’s not looking for something at a bargain basement price. He’s searching for something reasonably affordable, in the $600,000 to $700,000 range. Still, he’s come up short.
The median price of a single-family home in Steamboat has gone from $476,000 at the market’s low point in 2012 to $1,077,500 in 2020. In less than a decade, it’s increased by 126%.
The high prices have been driven by record-low inventory, and people relocating en masse to partake in what Steamboat has to offer. That move has forced buyers to reinvent the purchasing process — to market themselves to any potential sellers and take more risks. It’s a paradigm shift for the local real estate market.
“It is definitely a challenge now,” said Jon Wade, owner of The Steamboat Group. “We are having a fair amount of success reaching out for client needs and looking for matches in buyer and sellers’ goals.”
Those goals vary widely between properties, but mainly for buyers, who are often motivated enough to buy without contingencies, make purchases fully in cash, engage in fierce bidding wars and even spend money on marketing for themselves. Some efforts have proven futile, because Steamboat has some of the most limited inventory in the nation.
How we got here
Steamboat has pretty much always been expensive, but in the years prior to the pandemic, the local market was very gradually trending upward in price.
“I look back to 2007, and we had a really nice mix of luxury and affordable housing and everything in between available for people to purchase,” said Doug Labor, associate broker and general manager of Steamboat Sotheby’s International Realty downtown.
The average purchase price across all types of properties in Routt County was $571,000 in 2009, and at that time, there was quite a bit available on the market. Activity on the local market started improving, and the amount of listings hit an all-time high in 2010 with 2,175 properties available, according to data from the Steamboat Multiple Listing Service, or MLS. Then, in 2011, listings and prices took a dive as the market reacted to the Great Recession.
“We were coming out of the basement of the Great Recession, and the listings just started getting pecked away at where we had more people buying than selling,” Labor said. “It was a very steady, very linear progression in sales or degression in listings.”
Listings dropped a bit more in 2018 and 2019, with about 1,100 total listings available in 2019. There was more product in 2017 to 2019 but demand was still present. What happened in 2020, with the onset of COVID-19, was that exponential demand hit the already slim pickings on the market and escalated sale prices.
“If COVID wouldn’t have occurred, we probably wouldn’t have hit that number without it,” Labor said of the median sale price for a Steamboat home in 2020.
Stephanie Rodriguez and her family moved to Steamboat on July 2, 2020. Her husband, Jeff, is able to work from anywhere as long as there’s an internet connection. His aunt has a home in Routt County, which often brought the family to the area. As they kept coming more and more, they decided to sell their Denver condo and buy a home in Steamboat.
“We were just checking out the area and thought we’d put an offer in on a house,” Rodriguez said.
The couple had looked at three homes before finding the one they loved in the Silver Spur neighborhood just outside Steamboat’s western city limits.
They put in the offer, but it wasn’t accepted. Within the following week, their real estate agent contacted them with good news: the house was theirs. The other person hadn’t put down their earnest money.
“It was kind of on a whim, and it worked out,” Rodriguez said. “It was a whirlwind. The houses were going really fast.”
There was one property Rodriguez was sure they wanted while touring the local neighborhoods, but by the time they got back home to Denver, ready to put in an offer, the home had been sold.
The morning that their current four-bedroom home — complete with an ice rink in the backyard — hit the market, the Rodriguezes jumped into their car and wasted little time making the drive to Steamboat to check it out. After their offer was ultimately accepted, the family of four had two weeks to get the house ready and were up here within a month.
Gabe Strom hasn’t been as lucky, but not from a lack of trying.
Hailing from Chicago, Strom used the U.S. Postal Service to market himself to potential sellers in the area. He mailed out postcards with a charming photo of himself, his wife and young daughter accompanied by a plea for someone to sell them their home.
“We’ve had a good response,” Strom said. About a dozen people have responded to his mailer, yet he’s still without a Steamboat home. “We just haven’t found the right house yet.”
Strom is in a relatable position for many. He’s not super wealthy — he owns a publishing business and his wife works in corporate America — and his budget is just shy of $1 million for a three- or four-bedroom, medium-sized home.
“We’re just like the locals — looking for a house under a million dollars,” Strom said.
But what he continually has been forced to realize is sellers of those types of properties are seeking around $1.2 to $1.5 million as a sale price.
Strom came to Steamboat on a recommendation from a friend from Fort Collins. His friend suggested he skip the Front Range and, “if you want good schools go to Steamboat.”
“’You’ll have world-class, basically everything — snowmobiling, skiing, mountain biking,’” he recalled his friend saying.
That’s the lifestyle that has attracted him and his wife here.
But until the COVID-19 pandemic struck, his wife was tied to their Chicago home. Now, her firm works remotely. At that point, they were faced with a question: “If you could move anywhere, where would you go?”
For the Stroms — and many just like them — that answer was Steamboat.
Migration of remote workers
John Bristol has been tracking the issue of remote workers and their impact. He’s attempting to determine what lies ahead, but it’s difficult.
“I’m hearing lots of stories, and some of them are conflicting, as well as the data,” said Bristol, Steamboat Springs Chamber economic development director.
To better understand the shift, the Chamber, along with Routt County and the city of Steamboat Springs, is participating in a Mountain Migration Study being conducted by Northwest Colorado Council of Governments.
“We know there are remote workers and remote students that have moved to Colorado’s mountain communities, but the questions are how many of them are there, will they stick around for the long-run and transition to become full-fledged location-neutral workers and learners,” he explained.
The hope is that the study will shed light on the subject as well as the impacts there are or will be on communities both economically and socially.
While remote workers have always existed, COVID-19 made the ability to work from home much more prevalent, Labor said.
“People figured out they could work out of their house in the Houston suburb as easy as in Steamboat Springs,” Labor said.
“The pandemic likely sped up their transition timeline to relocate to a residence they owned, or a rental, or to make a purchase,” Bristol added.
An influx of new residents would undoubtedly have an effect on the local economy, depending on how long they intend to stay combined with their spending patterns.
“For example, someone moving into a second home may choose to go ahead and make a few small upgrades, a shorter-term renter may be more focused on lifestyle and outdoor goods purchases, and maybe, a new homebuyer is going all out to outfit their new home and remote office, unless they’re simply moving their things in,” Bristol explained. “These spending decisions and resulting economic activity is mostly reflected in our tax receipts.”
‘No houses left in Steamboat’
“We’re just like the locals. We’re not rich people from California that are coming here with trust fund money. We’re just regular people with jobs,” Strom said. “I think this is unprecedented. I’ve got friends all across the country that are brokers and (Steamboat) is tough.”
Right now Strom and his family are living in a home belonging to a friend of a friend, who is set to move in this summer. That has left the Stroms with a tight deadline of finding a more permanent residence before the Fourth of July.
“My wife is pretty discouraged right now,” he admitted.
The other day the couple went to see a home for sale in the Whistler Park area near Steamboat Resort. His review of the home wasn’t spectacular, unlike its price tag.
“It was an average, three bedrooms, two bathrooms, small, no backyard, and they’re building this giant house next to it,” he said. “They want $1.1 (million).
“Price is what you pay, value is what you get,” he said as a justification for potentially increasing their spend if they found the right house. “But ideally, we don’t want to. We just want a place to raise our kids.”
While his postcard did attract some attention, nothing has panned out just yet. He said many of the responses to his postcard have been from empty nesters. They’re people who have been here for 30 years, raised their children here and now just want to go to Arizona or somewhere warm.
Strom is now considering turning his attention to purchasing land to build on. But the costs involved with that are at a premium, as well.
“There’s no houses left in Steamboat — that should be the story,” Strom said.
Buyers are so desperate to find a home they’re even abandoning contingencies once meant to safeguard their purchase.
Labor said he’s seen buyers forego a survey, an appraisal or even an inspection in order to make for a quick purchase.
“Having fewer contingencies than normal puts the buyer at risk,” Labor said.
Cash sales have also increased. About 50% of home purchases in Steamboat have been made in cash in 2020, according to Labor. Cash sales remove contingencies of having the buyer qualify for a mortgage and for the home to appraise for the contracted price per the mortgage.
Facing the reality
“I think it’s going to continue on its current path,” Labor said of the high prices and low inventory. “I don’t see anything that’s going to change in our inventory. “I feel that the demand is still going to be up there and increase. Knowing that this is happening and the desire and markets have been strong in more expensive markets — like Vail, Aspen and Telluride — if people get priced out of markets there, they’ll probably begin to look at Steamboat Springs, too.”
Allbright used to be a Steamboat local. His children went to school here, but in the economic recession of 2008, he was forced out of the market and into the Denver area.
In mid-2020, when he found a new job in Steamboat, he used a tactic similar to Strom’s to find a seller. He placed an ad in the Steamboat Pilot & Today, complete with a photo of him and his wife and a message of what they were looking for in hopes someone would reach out. It didn’t pan out, unfortunately.
“The history used to be that you find a job first and then find a home second,” he said. “But with COVID-19 allowing a lot of people to work from home, apparently that has reversed the roles, and you have to find the house first.”
He’s tried to be innovative in his approach to finding a new home, now mostly relying on a real estate agent, community connections and word-of-mouth. In the meantime, he managed to find a rental property, so he could live close to his new position with Mount Werner Water.
“The competition is still really fierce,” he said. “That’s a major problem at the moment. There aren’t enough houses for the people that want to move here, whether it’s a rental or actual purchase of a house.”
Competition is so intense that Labor believes a list price is a thing of the past.
“You weren’t competing with other offers like many buyers are doing now,” he said. “We’re at a point where there’s no such thing as a list price — it’s not as meaningful now than what it was a year ago.”
Allbright’s ideal budget is in the $600,000 range, “but that’s probably not realistic,” he admitted, so he’s been trying to stretch up to $700,000 to $750,000.
“We recognize that a lot of people want to come here,” he said. “It’s just frustrating to not be able to find something with a diligent search.”
Allbright wants to stay in Steamboat to be tight with the community. He said he enjoys community service, volunteering and being involved with his church.
“The best part of this community is the people, their attitude towards life and friendliness,” he said. “That’s not changing. But the demographics of the community is changing. People are still friendly, but they have different viewpoints on things and the divisions that we see that have been growing over the course of 10 to 15 years continue to widen and people have difficulty bridging those divisions. That’s a sad commentary in general across the whole United States.”
Allbright said he will continue to be persistent, a little bit stubborn and try to keep a sense of humor.
“That’s an important component to all this — a sense of humor,” he said. “That’s important for everybody to have, not just people hunting for houses.”
To reach Bryce Martin, call 970-871-4206 or email bmartin@SteamboatPilot.com.
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