Pending sales hold the line above century mark

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Pending sales in the Routt County real estate market through Oct. 7

— Trying to discern trends in the Routt County real estate market this autumn is like playing a popular pub game.

It could be compared to throwing darts at a board without knowing for certain where the bull's-eye is, one Steamboat Realtor said.

"The buyers who are throwing darts are choosing to do so because of these compelling prices coupled with low interest rates," said Anne Mayberry, a broker associate in The Vanatta Group at Prudential Steamboat Realty.

The trend in mortgage rates isn't difficult to pin down.

The Associated Press reported Thursday that the average rate on a 30-year fixed-rate mortgage was 4.87 percent, marking the second week in a row that rates had remained below 5 percent.

Ulrich Salzgeber, the incoming president of the Steamboat Springs Board of Realtors, found a folksy way to define the trend this fall as the number of pending sales remained above 100 for an extended period - the first time that has happened in 2009.

"I told the Chamber board that the tire kickers are now taking test drives, and some of the test drivers are now buying," Salzgeber said.

Mayberry said there were 111 pending sales, with only a few of the contracts in place for three large condo projects: Trailhead Lodge, One Steamboat Place and Edgemont. Transactions at the multifamily condominium projects, which are listed in house, most often don't show up until they close.

"Six to eight weeks ago, we broke through the 100 threshold," Mayberry said. "We were much below that threshold pretty much the entire year until mid- to late summer."

On a more serious note, Salzgeber said that the buying process has lengthened and that portions of it have flip-flopped from two and three years ago.

"The whole buying process is a longer period," Salzgeber said. "In the past it was, 'Get the property, get the property, get the property and then do your due diligence.' Now, buyers are doing their diligence ahead of time and then going to contract. They don't want to lock in too fast and then ask, 'What did I lose out on?'" in terms of price.

Of the 111 sales contracts pending, all but 22 were written in 2009. That leaves 22 that predate Jan. 1, Mayberry added, but the Board of Realtors has been diligent about scrubbing contracts that are no longer viable from the list.

Because there is constant churn in pending sales - transactions close, and new contracts must be written for the number to remain relatively constant - Mayberry sees encouragement in the statistic's staying above the 100 threshold.

"It's an indication of continued activity and not a slowing down," she said.

Unlike actual sales, which often aren't recorded until a month or more after the contract was signed, pending sales are more indicative of current activity. The weakness of watching that trend is that inevitably some contracts fall out without closing.

Sales closed through the Steamboat Springs Multiple Listing Service since the first of the year number 302, including seven in October.

Comments

Scott Wedel 4 years, 10 months ago

302 closings in 2009 is about 45 a month which is about 75% less than historical average. And Sept had 42 so no signs of recovery yet.

When the number of closings is still awful, guess what, realtors talk pending sales. Earlier this year we were told to wait for the pending sales at Wildhorse because they would show a busier local RE market once those started to close. When the promised blizzard turned out to be a light sprinkle, they now talk about pending sales.

I am more disheartened than cheered seeing that there are 100 pending sales, especially with 22 being more than 10 months old. With the stricter mortgage requirements including requests for second appraisals, it just takes longer to close so the number of pending sales should increase. Also, with the upcoming end of the $8K tax credit in which sound financial advice is to "put it in an offer and hope you can complete the purchase" the number of pending sales should increase. Hopefully, the number of sales will increase at least until the end of the tax credit.

And then comes the blizzard of foreclosures from all those that cannot sell.

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