Steamboat supply tightening for single-family homes for working households
May 4, 2013
Steamboat Springs — Steamboat Springs' real estate market still is in recovery, but single-family homes that are attainable for working families are not abundant.
Kathy Steinberg, of Prudential Steamboat Realty, recently brought the buyer to a split-level home across Maple Street from the Spring Creek natural area just east of Steamboat Springs High School that sold for $544,000. When her clients expressed strong interest in the 2,606-square-foot home, she urged them not too hesitate too long.
In part because her clients were intent on purchasing a home close to schools as well as their employment in downtown Steamboat, they looked at only four homes.
"It was the most normal house we'd looked at," Steinberg said. "I told them it's not going to come up again and have this many things in its favor. It has recreation trails right near by, and what they are looking at is open space."
The house looks across the street without any homes between it and the native trees and shrubs along Spring Creek. It's just a few steps from the popular Spring Creek Trail, which can take a hiker to the flanks of Buffalo Pass in one direction and to Old Town Hot Springs via a gentle path in the opposite direction.
A search of current listings showed 18 homes in Steamboat Springs city limits or the nearby western suburbs like Heritage Park priced from $300,000 to $500,000, a price range where many two-income, working-class families often need to be in order to qualify for a mortgage.
That represents a big price range, and breaking it down, there are currently four single-family homes listed below $400,000. The highest priced is a 520-square-foot cabin on Thornburg Street on the edge of Old Town with a list price of $399,000. One of its advantages is that it's on a 0.36-acre lot, which is larger than typical for some areas of the downtown neighborhoods.
Three others comprise 1,200 square feet. Two are in the River Place neighborhood in Dougherty Lane on the city's southern limit and close to the Yampa River Core Trail. The two-story homes are priced at $369,000 and $399,000. A third is on Lindsay Drive in Heritage Park just west of city limits and priced at $345,000.
The challenge to buying and selling modest family homes in this market, Steinberg said, is pricing them where the likely buyers can qualify for a mortgage.
Loans of more than $417,000 trigger requirements for higher interest rates and bigger down payments that make it harder to buy, she said.
Except in the case of buyers bringing significant equity from a previous home, something that's not always easy in the post-recession era, the sweet spot for home prices tops out just above $500,000, Steinberg said. That allows a buyer to make a 15 to 20 percent down payment and stay within the $417,000 borrowing threshold.
Of the five homes on the market for less than $500,000, most are more than 30 years old, though several have undergone significant remodeling. The lowest price is for a 2,182-square-foot house on a large lot at the mountain priced at $449,000 and built in 1970. Two are in the Hillside neighborhood between downtown and the mountain priced at $465,000 and $489,000 and built in 1979 and 1980, respectively. There is a home on Evans Street in Fairview priced at $489,000.
The price of an entry-level home in the city has moved up since September 2012, when Colorado Group Realtor Randall Hannaway brought the buyer to a 1,874-square-foot home on Stone Lane that sold for $405,000. He theorized at the time that if there were more similar homes, more people would be taking advantage of historically low interest rates and purchasing them.
In summer 2012, buyers still were buying homes in Willowbrook, close to Stone Lane, for $355,000. Two homes on Pamela Lane near Emerald Park also sold for $355,000 and $358,000 that summer.
"The bank deals are disappearing, so now we're starting to get to a more true market, and our inventory is going down," Steinberg said. "Even though in the big picture, prices are still down, it's a good time for people in a certain price range, say between $300,000 and $600,000 to list them for sale. But they still have to be priced realistically on a tangible price per square foot where it can appraise."
There also were some interesting sales recently in the high 500s and low 600s. Prudential's Robyn Higginbotham and her colleague Darrin Fryer brought the buyers to sales on Fish Creek Falls Road and Yellowjacket Pass, on the way to Stagecoach Reservoir. Both homes had sold in early spring 2011.
"Both of those homes were highly competitive,"Higginbotham said. "There were multiple offers. The homes that are selling right now are the homes that are in good condition."
The Fish Creek Falls Road house sold for $449,000 in April 2011 and sold again April 29 for $615,000. Part of the reason for the increase in the sales price is that extensive remodels were undertaken by the previous owners.
The Yellowjacket home was a bank sale in March 2011 for $499,000 including an 8-acre lot. Those buyers turned the home over for $580,000 on April 26 to take employment overseas.
Higginbotham said low interest rates, the lack of inventory in some price points and an improving local employment scene are aiding the recovery of the real estate market.
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com