Steamboat Springs real estate market continues trend of positive statistics
October 21, 2013
Land Title measures cash sales in Routt County
In response to an inquiry from a real estate agent, Melissa Gibson, branch manager at Land Title Guarantee Company, started recording what percent of sales in Routt County were made with cash.
August was the first month the figure was available for Routt County’s real estate market, and it showed that 52 percent of sales were cash purchasers. In September, 46 percent of sales were cash purchases.
While seemingly high, those figures reflect a nationwide trend toward more cash purchases of homes following the Great Recession.
National estimates for the amount of cash purchases as of July range from 31 percent from the National Association of Realtors to 57 percent from a Goldman Sachs report. Both numbers are cited as all-time highs.
Gibson said it’s hard to pin down what type of buyer is driving the trend in Routt County.
As a resort market that’s attractive to second homeowners, she said, the area has typically had a lot of cash transactions. The increased burden of securing a loan following regulatory changes to the mortgage market also could make cash sales more attractive to those who can afford it but otherwise would secure a loan.
Because she only recently started keeping track of the figure, Gibson was not able to say whether the past two months represented a significant increase for Routt County.
Steamboat Springs — The real estate market in Steamboat Springs has been on the slow road to recovery for some time. Indicators such as a favorable sell-through rate, increases in transactions and dollar volume and the falling number of foreclosures have been aligning behind an improving outlook.
A search of Routt County records Monday afternoon showed only two notices of election and demand, which signify the start of the foreclosure process, had been filed in October. The monthly high for the year so far was 18 NEDs recorded in May. There have been 113 NEDs recorded to date this year compared with 203 by the end of October in 2012.
"You can’t stabilize until distressed (sales) stop driving the market," said Jon Wade, of Colorado Group Realty.
Distressed sales, where a property is offered at a discount because of circumstances such as foreclosure, can affect the perception or actual value of comparable market price homes.
With fewer distressed properties in the marketplace, prices should stabilize at a market rate that more accurately reflects current values.
"Where we are in the process depends on the part of the market," Wade wrote in his Third Quarter report.
A rush of activity in single-family homes under $500,000 in Steamboat Springs during the past year has largely depleted inventory in that segment. Wade said that will force buyers who can't afford to move up in price to look in the county.
In his report, Wade wrote that 81 percent of homes under $500,000 are in the county as are 69 percent of homes listed for less than $1 million.
At the current rate of sales, there is nine months of inventory for single family homes between $300,000 and $600,000, according to Wade.
Wade also cited the $1 million to $1.3 million range for single family homes as one to watch, with 10.7 months of inventory left at the current pace of sales.
About 55 percent of buyers to date for the year were from outside of Routt County, with 12 percent of buyers from the Front Range. The Case-Shiller Home Price Index lists Denver among the hottest real estate markets in the country.
Potential buyers who've either taken advantage of appreciation along the Front Range or have watched the market turn could help lift prices in Steamboat, as typically affluent second homeowners have a greater ability to move upmarket when searching for a property.
A report from Land Title Guarantee Company states that the median single family home price as of September 2013 is $485,000, up 18 percent compared to 2012. The dollar volume is up about 14 percent and the number of transactions is up 11.75 percent for the same time period.
The total effect of the positive indicators and statistics has been that more people are comfortable to join the market, Wade said.