The developers of the luxury condominium project, Edgemont, used aggressive discounting on a limited number of units to create a sense of urgency among prospective buyers and put five vacation homes under contract this summer. Four of five have closed and the fifth would bring the aggregate value to more than $4 million.

Photo by Tom Ross

The developers of the luxury condominium project, Edgemont, used aggressive discounting on a limited number of units to create a sense of urgency among prospective buyers and put five vacation homes under contract this summer. Four of five have closed and the fifth would bring the aggregate value to more than $4 million.

Pending real estate contracts see growth in Steamboat

Incomplete sales for August paint rosier picture than July figures

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The Steamboat Springs Multiple Listing Service shows three pending sales in The Villas at Walton Creek, which has a mix of permanent residents and vacation home owners on Whistler Road.

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Resort Ventures West hasn’t been able to sell luxury condominiums at Trailhead Lodge this summer, but the more modest First Tracks project, originally built to provide affordable housing, has several sales under its belt with more pending. Developers say Front Range buyers look at First Tracks as a value opportunity with high-end amenities.

— Real estate deals typically don’t become public until the closing date. After all, it’s not a sale until everyone has signed a thick sheaf of papers, and title companies in Steamboat report a significant number of canceled appointments this summer.

Even after the contracts that have fallen out are taken into consideration, it’s the pending sales that are most telling about what’s happening right now in the market. For local Realtors with direct access to the Multiple Listing Service, it’s as simple as logging in. For the rest of us, it’s typically a guessing game.

“The number of pending contracts right now is 100 compared to 70 in the third week of July,” Realtor Jon Wade, of Colorado Group Realty, said Wednesday.

The 100 pending contracts have a combined value of $58 million, he said.

The news that pending contracts here were up 42 percent from a month earlier arrived on the same day that the National Association of Realtors released the grim news that national resales of existing homes were down 27 percent, representing a 15-year low in demand for single-family houses.

The 100 real estate contracts waiting to close in Steamboat this week (it’s safe to assume there are other pending contracts that are not listed with a Realtor) are not limited to single-family homes. But they are all the more interesting because they range from a mobile home in Fish Creek Mobile Home Park with an asking price of $52,500 to a property at Lake Catamount that had an asking price of $3.06 million, Wade said.

Just as it’s safe to assume not all pending contracts will close, it’s also a given that in many, but not all, cases, the sale price will be substantially discounted from the asking price.

Deep discounts yield results

Realtor Chris Wittemyer, of Pruden­tial Steamboat Realty, and developer Bob Comes announced at the end of May that they were dropping prices on 51 unsold lots at Barn Village at Steamboat by 50 percent. Now, more than two months later, Wittemyer confirmed that four lots are under contract to a single buyer.

He added that he’s not counting the deal as done until it closes, but he’s optimistic that now that the ice is broken, other sales may follow.

Comes and Wittemyer had observed during spring that only five building lots had sold in the preceding 12 months, convincing them that they’d have to bring their lot prices down to make them competitive with the reduced prices on lots that already have custom homes on them.

That means the smallest single-family lots at Barn Village, once listed at prices from $484,500 to $599,000, now are on the market for $242,250 to $299,950.

“It’s important to get these four because it might make other people realize this is a good time to buy,” Wittemyer said.

A strategy of reduced prices on the luxury slopeside condominiums at Edgemont paid off this summer, Director of Sales Mark Murrell said. His goal was to overcome inertia among buyers who seemed to have a strong interest in his project.

“We’re feeling pretty good about what we’ve done. We had a great summer,” Murrell said. “We’ve put five units under contract since June 22 and closed on four with another set to close (this) week.”

Murrell said the discounting strategy accomplished what it was intended to do.

“It built up a sense of urgency, and it helped us understand who was serious about making a decision,” Murrell said.

He began by dropping the summer prices on Edgemont condos as much as 10 percent from last winter’s prices and then announced that the next three to be placed under contract would see an additional 25 percent price reduction.

“We probably undershot the market,” Murrell said. “The first three sales were priced 30 to 40 percent off; it was substantial. We’re still getting the highest prices (per square foot) in Steamboat, but our objective was to capitalize on the interest we’d experienced throughout the ski season and find out who was real. If they were serious, they were going to react.”

Soon after the first two condominiums went under contract — a one-bedroom condo previously priced at $869,000 sold for $561,750, and a two-bedroom unit sold for $1.087 million — several buyers pursued another one-bedroom condo and one of them locked it up.

Murrell quickly offered three more condos at 25 percent off.

“We’re working through that now,” he said.

The most recent closing was a three-bedroom unit for $1.52 million, and the fifth is another three-bedroom unit scheduled to sell for $926 per square foot.

He expects that executives with developer Atira Group might consider a similar marketing strategy going forward, but it’s premature to talk about the details, he said.

“We’ll evaluate and decide where do we take it next,” Murrell said.

Wade and Wittemyer say their showing activity has increased this month.

Wade said three mid-range condominiums in The Villas at Walton Creek are under contract, along with a Quail Run unit not far away on Whistler Road.

Other contracts include a unit at Howelsen Place, he said, a large duplex on Après Ski Way, a $949,000 (asking price) home on Meadowbrook Circle and another home on Yahmonite Street in Old Town Steamboat.

Wittemyer said he’s seeing interest in rural land for the first time in two years. He has a contract on two properties along the Yampa River west of Steamboat and just upstream from the confluence of the Elk River at Riverbend Ranch.

Comments

greenwash 4 years ago

Do you really believe this info?The Seasons over....a handful of realtors want you to believe market is on a upswing.....Hardly...Prices need to continue and will continue to drop.Go to the courthouse and read all the 30+ forclosure postings.This is typical realtor BS.

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Scott Wedel 4 years ago

Doesn't even matter if it is true. The number of sales was 10 in another article today. Quick search of a real estate website shows more than 2400 listings. That's more than a 4 year supply of real estate inventory. A normal real estate market is considered bad if more than six month's of supply. An argument can be made that SB due to various resort factors can have a healthy real estate market with a year's supply of inventory. So regardless, we are a long ways from a healthy real estate market.

An increase from 70 to 100 pending contracts means nothing. An increase of 30 pending contracts could just as easily mean that some buyers are having troubles closing. And summer is supposed to be the prime sales period so there should be some hint of increased sales.

A developer that cuts the price of lots in half and then reports 3 months later that one buyer has put 4 of them under contract is not exactly great news.

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housepoor 4 years ago

no idea why the paper continues to comment on the real estate market, it sucks and it's going to suck for a long time, yet they continue to try to put lipstick on this pig a better article would be an interview with local bank executives and ask them when they feel lending standards might be eased, even a little.......or if they ever plan on lending on condos that have a front desk again......... or the percentage of salesrefi's that don't happen because the apprasial comes in to low(this might save some folks who have been forking over $400-500 for an appraisial that had no chance on being high enough to let them qualify, i guess the upside is at least the apprasiers are making money again) the community needs to realize that we can't count on it coming back anytime soon and that we have yet to hit bottom time to get back to the business of sking and tourism

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David Stone 4 years ago

Nationally,July was down 27%.The worst decline in recorded times.Why should Steam Boat think that matters would be looking up and optimistically at that.The Buyer determines the price and not the seller.We are all in for one very long and painful decline.This also holds true for the economy as a whole. David Stone

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ybul 4 years ago

Yet, inside every cloud there is a silver lining.

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