Summit County Colorado real estate market conditions
“What are property values doing in Summit County?†That’s the question people I meet today ask the most.
Both visitors and locals are curious about how the real estate market in Summit County is, since, overall, the U.S. market has been dragging for a while. People thought Summit County real estate would be suffering too, but it didn’t, until this year. From January through June of 2008, the number of sales decreased 38% compared to 2007, which is a sign that the national economy’s slowing has caught up to us.
Mostly, buyers are scared to purchase property in this economic climate, which is causing the number of real estate sales to decline. They’re waiting for prices to go down, but, meanwhile, sellers aren’t very willing to reduce the price of their homes — especially if they’re second-home owners; this group is historically unmotivated to budge much in price or provide other incentives to entice buyers. They tend to balk at low offers because they’re not financially pressured to sell immediately; they are usually financially secure enough to wait out any market lags.
Some areas of Summit County have been hit more than others by the downturn. For example, sales within Copper Mountain real estate have decreased almost 51%.
On the other hand, Wildernest, which is part of Silverthorne, and Silverthorne as a whole have only seen a 32% dip in sales.
Keystone, which had problems with more luxurious new condos than they could sell in the mid-1990s, came in second best out of towns in the county, seeing a decrease in sales by only 37%
The average percentage sales were off in Summit County was 38%, which is also how Frisco fared.
Property closings in Dillon lagged by 49%.
Though average sales prices have not gone down, many prices originally listed in the MLS have been cut. For the most part, sellers listed these properties too high in the beginning, expecting to get away with adding 10-15% to the last sale price of a neighboring property. While sellers have been able to do that in the past, those days are gone. Sellers must base their price on the last sale of a similar unit. The first five months of 2008 are still showing strength in terms of average sale price. Sellers are just not willing to sell their properties for a low price. In fact, I personally wrote a couple of low offers, and the sellers almost refused to counter them. There have been almost no foreclosures in Summit County recently; the market is still good, there is just more inventory on the market than usual (which is good for buyers), and the number of sales have dropped, I believe because of the mortgage crisis. In addition, some lenders are requiring buyers to put 20% down, which makes it more challenging for some buyers to purchase a property.
From January through May, 2008, the average Summit County single-family home sales price was $838,347 — compared to $798,889 in 2007. Of course, this only tells part of the picture, since the 2008 year-to-date average is only based on 190 transactions (and very high sales could skew the average), whereas 2007 saw 801 single-family transactions — so we have a ways to go before we can completely and accurately compare average sales prices in 2008 to 2007. Still, matching year-to-date 2008 to year-to-date 2007 numbers, sales prices are looking strong.
Historically, throughout the last 15-20 years, property sales have leveled out or dropped a bit, but overall, they have increased.
From 1997 to 2007, the average sales price in Summit County went up between 10% and 19% for seven of the 10 years. On average, it increased by 10% a year. The average sales price soared from $217,541 in 1997 to $552,305 in 2007. The average number of sales during that 10-year period is 2,246 properties.
Average sales prices in Summit County didn’t perform as well in the years after the Sept. 11, 2001 tragedy; the following year, 2002, the average sales price actually declined by 5.1%. By September of 2002, the Summit Daily local newspaper reported that the real estate market had shown the correction for a variety of reasons, including a national recession, more layoffs in the Front Range, the prospect of war with Iraq and a weak stock market. The next year, 2003, it rebounded, but only went up 4%. In 2004, it increased by 4.8%, and by 2005, the Summit County real estate market was back to normal, increasing by 12.4% in a year.
Ski resort property is even hotter when it’s hot, and a little cooler when it dips down, than the averages of all of Summit County properties.
Copper Mountain properties showed slowing from 4.20% decreases to 8.6% decreases in 2000, 2001, 2003 and 2005. (In 2002, the Summit County MLS listed more than a three-year supply of properties; 51 units sold that year, but 167 were listed.)
Copper Mountain real estate showed its biggest average sales price jump — 27.7% — from 1997 to 1998, after Intrawest bought Copper in 1997, with the intent of developing a grand village and building more condominiums (which it did). The number of units sold increased significantly in 2005; before that, the highest amount of properties sold was 68, in 2004. In 2005, 118 units sold for an average price of $298,748. In 2006, the average sales price increased by 21.5%, to $362,999, and in 2007, it jumped 14.9% to $417,262. Over a 10-year period, the average percentage increase in the average sales price was 6.78%. For a visual perspective, take a look at a chart of the last 10 years’ worth of sales. One shows Summit County real estate; the other shows only Copper Mountain real estate.
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Average Summit County Sales Price by Year
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Average Copper Mountain Sales Price by Year
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Judging from the amount of growth, the opportunities for recreation and the property growth — both in numbers and in financial value — people will continue coming to Summit County as a vacation destination for all seasons. Its proximity to Denver, right off Interstate 70, also makes it a popular choice. As a result, it’s a great time to jump on Summit County real estate, because it is experiencing a break from rapid spikes in price. It would be smart for buyers to take advantage of the opportunity while it’s still around. And, if you want to sell, simply price your property correctly, and watch it sell.
Thanks for the article. I’ve been following the summit county and surrounding areas market for some time now. Its interesting how even just a small decrease in the number of buyers can have a dramatic effect on house prices.
These properties can only go down so much until investors jump in.
Yeah its true! Sometimes the price of a property greatly depends on the number of buyers…
Thanks for sharing this valuable post.
-Audrey