Steamboat Springs The week that just ended was a jittery one for prospective real estate buyers in Steamboat as the stock market did its best to imitate a Duncan Imperial yo-yo.
Nevertheless, Joy Rasmussen, of Colorado Group Realty, said clients still are arriving for their combined August vacations and property searches.
“I had a busy month in July with people coming out of the woodwork,” Rasmussen said. “I find that people typically come to Steamboat at least three times before they buy. When they come in winter, the clock is always ticking on an expensive ski vacation. You can see them check their watches. It’s when they come back in summer that they really invest time in looking for real estate.”
She has been showing property this summer to a diverse group of clients, including a couple from Houston seeking to buy a townhome or condominium at the mountain as a point of entry. They will live in it for several months while they look for a single-family home, then keep the first purchase to host guests and family members from the United Kingdom.
Another client from out of town is looking at $600,000 homes that were formerly priced at $1 million. He had initially looked at lower-priced properties but landed on the higher price point because he saw better value.
A third is looking at modestly priced townhomes close to the ski area with the intent of using an intermediary to help her divert 401K funds into Steamboat real estate without incurring a tax penalty. It’s a little-known tactic the client has used in the past to take retirement money out of securities and put it in real estate. The rental income from the townhome would be channeled back into the 401K, according to Rasmussen, who has done the same thing herself.
Finally, a fourth client is seeking to purchase the entirety of an unsold development, betting that when demand returns to the market, there will be an appetite for new construction.
Colorado Group Realty just released its 2011 mid-year report on the market, reflecting that total sales for the first six months of 2011 were just more than $170 million, up 18 percent over the same period of 2010.
One of the key findings of the report is that sales of distressed property in the Steamboat market are disproportionately affecting the lower end of the market. Of the 42 condo and townhome sales through the multiple listing service in the first six months of the year at prices under $250,000 were distressed. In contrast, just 11 percent of the sales greater than $500,000 were distressed.
The same trend was reflected in the sales of single-family homes. Of the 28 sales under $500,000, 54 percent were distressed sales. Twenty percent of the 26 sales greater than half a million dollars were bank-owned or under a foreclosure filing or short sale.
At first glance, the Colorado Group Realty research shows that the average selling price of single-family homes in Steamboat’s downtown and Fish Creek areas have declined significantly in the first half of 2011 as compared to the first half of 2010. However, the average for the 21 sales in the first half of 2010 were influenced by a single $4 million sale. The highest home sale in those neighborhoods during the first half of this year was $2.65 million.
Despite financing challenges, sales of condominiums and townhomes at the ski mountain represent the single largest chunk of Steamboat’s $170 million sales in the first half of the year. The $49 million attributable to the sale of 98 condos and townhomes is more than double the valuation of the 17 single-family homes sold at the mountain.
Rasmussen said she was telling nervous clients this week that the 650 point decline in the stock market this week represents opportunity for buyers who are willing to put an offer in front of sellers.
“This will be a period of unease for a lot of people,” Rasmussen said. “I tell them that sellers will be more anxious to make a deal than at any other time. You could submit a low offer and for some sellers it would be the first offer they’ve received. You don’t know what will happen until you make the offer.”
And if an institutional buyer can snap up an entire development for pennies on the dollar, that will reset prices for a segment of the resort market and potentially restore healthy churn to Steamboat’s overall real estate market, Rasmussen said.
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com