Mountain-resort home sales in July lowest in years
September 8, 2011
Denver — Real estate sales in Colorado's mountain-resort communities were gaining steam through most of this year, continuing a steady rebound from the market decimation of 2008 and 2009.
Then came July.
July sales in Pitkin, Eagle, Summit, Routt and San Miguel counties were the lowest in years, potentially derailing a resort real estate market tracking toward recovery.
While the mountain counties still are ahead in year-to-date sales, the dismal July — the lowest month for sales in any month in the past six years in Pitkin County — could burst the optimistic bubble that drives Colorado's mountain real estate industry.
Brokers offer a potpourri of issues that plagued the market: the European financial crisis, domestic squabbling about debt and unease about the country's crawl out of the recession.
Bob Ritchie, a longtime Aspen broker who still moves the high-end homes that remain immune to any downturn, thinks the weather played a major role in the July drop, which left Pitkin County's sales volume that month a mere quarter of the total volume posted during the county's booming July 2007.
A two-month delay from signing to closing means most of July's deals were first forged in May, when the high country was wrestling with 300 percent snowpack and cold, rainy weather.
"May was the most miserable month we've ever had here," Ritchie said. "We sell crystal-blue Colorado sunshine. When it's snowing and muddy and there's no skiing, you just can't sell a thing."
Aspen — particularly the tony downtown and west end — saw its average single-family home price climb in July, from $5.99 million in July 2010 to $6.60 million.
"Well-located, newer construction and unique, over-the-top beautiful properties continue to sell at premium prices," Aspen-area broker Tim Estin said.
But Pitkin's downvalley communities, such as Carbondale and Basalt, have endured steep drops in value. Carbondale in July saw its average home price drop 75 percent from the previous July.
Routt County's July saw sales volume drop to the lowest mark for the month in at least eight years. And the county's 79 real estate sales in July are a 63 percent decline from July 2010 sales.
A difficult financing environment also is contributing to the dip.
"Getting loans is the biggest problem. In my 25 years of doing this, I have never seen it so brutal in getting a loan," said Stan Urban, of Land Title Guarantee Co.'s Steamboat Springs office. "Most of these homes are second homes, and banks just are not lending."
The financing challenge is illustrated by the increasing number of buyers who pay cash for Routt County homes. Almost half of the transactions that closed this year involved cash, a balance never seen before in Routt.
Summit County posted its worst July in at least eight years, with a mere $35.6 million in sales. Yet the county still is tracking 6 percent ahead of last year, after marking strong annual gains in the first four months of 2011.
"There just wasn't any buyer confidence at all until midsummer," said Ann Marie Ohly, owner of Dillon's Omni Real Estate Co.
But with average prices tumbling in Summit's Breckenridge, Dillon, Copper Mountain and Silverthorne markets as well the growing number of bank-owned and distressed properties on the market, Ohly expects the county's number of transactions to climb but not sales volume.
"There are so many great deals out there; we are seeing a lot more buyers in the last couple months," she said.
Telluride too is seeing a rally from the July nadir. San Miguel County saw 14 deals generate a stark $15.1 million in July. Early August numbers suggest sales volume will come close to $40 million.