Entry-level homes drive average price, unit volume for 2011
February 11, 2012
Steamboat Springs — Homes priced for less than $200,000, many of them small condominiums, dominated transaction volume in the Steamboat Springs Multiple Listing Service in 2011, but there aren't as many of those condos available for sale in the first quarter of 2012 as there once were.
Realtor Doug Labor, of Buyer's Resource Real Estate, who analyzes statistical data for the Steamboat Springs Board of Realtors, said this week that homes priced below $200,000 represented 36 percent of sales in 2011.
"I think a lot of people were chomping at the bit to own a home and couldn't do anything until now," Labor said.
The current supply of condos priced at $100,000 or below represents just a four-month supply, he added.
Acknowledging that the first quarter of the year typically is when the number of listings across the board is at its lowest ebb, Labor said just nine condos are listed for sale in the sub-$100,000 category. When compared with the 26 condos that sold in that price point last year, the nine translate into a four-month supply.
It's a theoretical number — all of them could sell this month — but it's a statistic that helps real estate professionals and property owners understand the status of a given residential property within the larger market.
There also is a limited supply of condos in the $100,000 to $200,000 price range, where 45 units sold last year. There are 39 condos in that range listed for sale, yielding a 10-month supply.
Will the relative scarcity of entry-level condos be enough to cause prices to rise?
The challenge in making that statement, Labor said, is the significant number of distressed properties that factored into last year's sales. In the case of the 26 sub-$100,000 sales, 16 were bank owned, he said. The 10 privately owned sales had to compete with those distressed properties, and until the number of bank-owned sales diminishes, it will be difficult to move prices up. On the other hand, if the scarcity of listings leads to some properties receiving multiple offers, sellers may take courage and refuse to yield on their asking price, Labor said.
Perception is everything
The general public, prospective real estate buyers included, tends to focus on the average price of a home here to gauge the health of the market, Labor said.
However, the preponderance of entry-level sales last year heavily influenced that average. After all, 52 percent of transactions were for less than $300,000 in 2011.
But when you chart the array of unit volume within different price ranges for 2011 and 2010 and contrast them with the peak year of 2007, Labor said, you notice a significant shift beginning at about the $800,000 price point.
The data reveals that higher-end properties have remained relatively consistent, in terms of the percentage of transactions they generate, while properties in the middle of the range have given up share to entry-level homes (see the chart published with this story on page 1A).
From $800,000 up into the $3 million range, there has been very little change from 2007 through 2011 in the percent of transactions represented by each of those price points. The notable exception is a sharp spike in the percentage of overall sales for homes at prices from $1 million to $1.25 million in 2010 when that price point grew from 4 percent to 9 percent of the total.
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com