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How is the market? An Explanation of the Summit County Real Estate Market

Posted in: Buyers, Sellers
By Cornerstone
Jun 3, 2009 - 3:33:17 PM

As they say, all real estate is local, and we are no exception.  The Summit County real estate market is unique for many reasons. 

Here are a few:

  • Summit County is made up of over 75% National Forest and public lands, leaving less than 25% of the county as private property for real estate development.  Our county government estimates that we will run out of land to develop, and become "built-out" within the next 5-7 years.  That means that we cannot grow indefinitely, leading to oversupply.  Most of the new construction that is happening is luxury ski-in-ski-out properties, and large homes.  While there are some more "affordable" new developments, it is almost impossible to get into any new residential unit for under $500k.  This means that our supply of relatively older and less expensive homes is fixed.
  • Directly related to supply is demand.  While demand has certainly slowed with the current economy, there will always be a demand for what Summit County has to offer.  We are less than 2 hours from a major hub airport, and even closer to most of the Front Range ( Denver, Colorado Springs, and all the surrounding communities).  It is a major advantage to our market to have such a large population so close, and that factor keeps us stronger than more isolated resort communities.  In addition, our closest metro area is a city with a highly desirable lifestyle that is expected to continue to grow, and possibly prosper even more as the "energy economy" grows, as Denver is already a leader in the sector.
  • Over two thirds of our property owners are second home owners, and this number is growing.  The segment of society who can afford a second home is very likely to be financially stable, and therefore very unlikely to go into foreclosure, or get into a situation where they are so desperate to sell that they will sell for under market value.  While this DOES happen and there are good deals out there, it is not widespread and so does not flood our market with deeply discounted properties.  This is proving to be true even now in our market.   The worst things that can happen to a real estate market are oversupply and a high foreclosure rate, forcing the prices down.  In 2010 there were a total of 148 properties that completed the foreclosure process.  This is out of 26,0000 properties in Summit County, for a rate of 0.5%.
  • Industry analysts believe, based on their data, that the ski industry is relatively stable even with low consumer confidence, as long as we have good snow. Many people who enjoy skiing will make it a priority to go every year even when times are tough - many people feel they NEED a vacation.  As the cost of living and traveling gets more expensive, we are in a great spot to reap the benefits of competition, again because our location near a major metro area and airport make us more affordable and accessible than say, Crested Butte or Telluride.  So while we are all along for the ride, Summit County ski resorts and real estate will probably be able to weather the storm better than others.

So what is the outlook?

For all the reasons listed above, our market has weathered the storm relatively well.  We have seen sales volume and the number of transactions drop by about 60% the last few years, however our inventory has still remained well under 10% on average.  Luckily most of our sellers do not need to sell and are either keeping their prices steady or withdrawing and waiting until the national market recovers.  However we have definitely seen some significant price drops and great deals.  As we see the stock market and consumer confidence index creep upwards slowly, we are hopeful that our local real estate market will recover eventually but it is impossible to predict how long it will take.  In the meantime, there are some great opportunities for buyers to get the mountain property they've been looking for at prices we haven't seen in 2-3 years.  We won't know that we've finally hit the bottom until it is definitely coming back up.

We track the Summit County Real Estate market statistics monthly, and also include a list of Good Deals with an interactive Google Map as part of our Summit Scoop email newsletter.

 

   



Cornerstone Real Estate Company


23110 Hwy 6 #107
Keystone, CO 80435

111 A Lincoln Avenue
Breckenridge, CO 80424

970-513-8200 Office
866-441-0112   Toll Free
 


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