Steamboat Springs A shaky economy and eroding consumer confidence in the face of terrorist attacks have combined to cut the dollar volume of Steamboat real estate sales in half during the first nine weeks since Sept. 11.
David High, President of the Steamboat Springs Board of Realtors, said dollar volume of properties sold and/or put under contract between Sept. 11 and Nov. 6 this year was $39.5 million this fall compared to $85.5 million for the same period in 2000. This year's dollar volume was generated by 134 listings compared to 281 a year ago.
"Our bottom end is actually doing fine," High said, but it's a different story for home sales in the mid-range and high end of Steamboat's market. High is a Realtor with Steamboat Village Brokers.
The greater Steamboat market, which stretches to Steamboat Lake in the north, currently has 65 single family homes listed for $1 million or more, according to the Multiple Listing Service. Of that total, 29 are between $1 million and $1.5 million. The remaining 39 are priced at more than $1.5 million.
The upper end of the market has been quiet this fall, High said.
Realtor Cameron Boyd of Prudential Trimontane Real Estate said if you add condominiums to the mix there are 74 residences currently on the market at $1 million or more.
"I always look at how many million dollar buyers are coming on the market," Boyd said. He's been encouraged in the last three to four weeks to see some of the high end properties showing.
However, Boyd agreed that the number of homes represents a several year supply.
In calendar year 2000 the Steamboat Multiple Listing Service saw 24 sales of more than $1 million. Thus far in 2001, only 11 properties greater than $1 million have closed. Boyd said he's aware of 13 pending sales, all of them at the ski-in, ski-out Antlers project that would put this year's sales right on pace with last year.
The most vulnerable sellers in the high end of the market can sometimes be contractor/developers with brand new spec houses. They face converting a construction loan into a permanent mortgage. In the case of a $3.5 million home, a developer could easily be looking at a $10,000 monthly mortgage payment, High said.
Although some people might expect to see high-end sellers dropping their prices, especially on spec homes, that isn't always the case, High said. For one thing, a significant portion of the cost of a home represents hard dollars. And some spec home developers actually raise their costs over time to make up for their carrying costs.
High said he knows of one case where a local developer raised the cost of a multi-million dollar home over the course of two years to offset costs, and ultimately received the higher price.
"I can never tell the motivation of (sellers) until I put a contract in front of their faces," High said. "I'm oftentimes very surprised."
High sees signs that home sellers in the middle of the market understand they will need to be patient in today's economic climate. Homes listed in the range of $400,000 to $500,000 aren't selling right now and owners of those homes are beginning to seek alternative sources of cash flow.
"We're seeing these people wanting to rent," High said. "It's an indication they understand (their Realtor's inability to sell their home" is a function of the market."
High recently returned from a national convention of Realtors in Chicago. He said mortgage rates that have dipped below 7 percent are creating significant sales activity in other regions of the country, but trends in cities like Indianapolis don't necessarily transfer over to a resort town like Steamboat, where second home sales are such a large part of the market.
One segment of the local market that does seem to be stimulated by low interest rates is the lower end of the spectrum. High noted that a condominium at Walton Village recently sold for more than $92,000. That represents a new ceiling for the small condos in that project, High said.
The Mountain Vista Townhomes, between Fish Creek Falls Road and Hilltop Parkway, also seem to be selling well with prices in the low $200s, High said. Developer of the townhomes, Tamarack Views LLC, closed four units last week at prices ranging from $199,000 to $224,400.
Old Town Steamboat can be a real estate market unto itself.
"Downtown always seem like it's strong," Boyd said. Currently, 22 homes in Old Town, including Brooklyn and Fairview, are actively listed. Another nine homes are under contract.
"I think it's pretty good that nine of 31 homes on the market are under contract," Boyd said.
Boyd said he believes the greatest demand in Steamboat right now is for homes priced below $400,000. Heritage Park and Silver Spur Estates subdivisions just west of the city hold the potential to fill that demand, Boyd said. Silver Spur, 1 mile west of the city limits off County Road 42, has just over 40 single family homes, all of them built within the last year.
The 46 lots in the first phase of Silver Spur sold out and the 42 lots in the second phase are available. They range in price from $74,500 to $90,000.
Boyd said he sees many signs that sellers in Steamboat are being patient, especially those who have listed second homes. Rather than dropping prices, he expects them to hang onto their properties and enjoy them until the market comes back to their asking prices.