Window shoppers give Realtors hope
November 22, 2009
Steamboat Springs — If the entire Steamboat Springs real estate market were viewed as a single, large-format retail store, local Realtors say things are looking up. The reason: Even if customers aren't buying like they were a couple years ago, at least they're coming through the door again.
And in contrast to this time a year ago, the shopkeepers are more confident about putting prices on the merchandise.
"I'm not as worried as I was a year ago, when there was no rule book," said David Baldinger Jr., of Steamboat Village Brokers. "A year ago, we had record inventory, prices hadn't come down at all, and sellers were very stubborn about that, even when they had to sell.
"Now at least people are shopping. If the whole real estate market is a store, there are customers in the store."
A year ago, Baldinger said, the local market was operating on more of a barter system than ever, as sellers and their agents struggled to put a price tag on the merchandise that would match falling demand and increasing inventory.
Baldinger said all of the measuring sticks he has to track buyer interest look positive and that he has heard the same things from his peers at Prudential Steamboat Realty and Colorado Group Realty.
"Our phone calls, Web traffic and showings are all up," he said.
Pam Vanatta, co-owner of Prudential Steamboat Realty, agrees that the number of people looking at property in the market is on the up-tick. She also thinks that among buyers who are actively looking at property, there is a growing awareness that they've missed out on opportunities in the Steamboat market and those opportunities may not exist beyond mid-2010.
"In the fourth quarter, we're starting to see a little recovery compared to the first three quarters of 2009," Vanatta said.
Vanatta cites the micro-market on Golf View Way in the Sanctuary neighborhood, where two homes sold earlier this fall, as an example of lost opportunities. She has direct knowledge, she said, that several other buyers were looking seriously at the two homes that sold.
"Buyers have an opportunity for the next six months — prices are very good right now. But in some cases, people have liked a specific property and someone else has jumped on it," Vanatta said.
The two sales in the Sanctuary this fall reflect a low point in recent years for sales in the luxury subdivision on a per-square-foot basis. At the same time, Vanatta thinks she recognizes the beginning of a rebound in that market segment.
The first house, at 2248 Golf View, sold Sept. 30 for $1.6 million. The 4,361-square-foot home has four bedrooms, five baths and a three-car garage. The selling price worked out to $367 per square foot.
Homes in the Sanctuary had been selling at prices above $400 per square foot for several years, Vanatta said.
The second sale, on Oct. 29, also came in below $400 per square foot, she said, but this time, the home at 2276 Golf View was about 5 percent more per square foot than the preceding sale.
The 5,137-square-foot home was built in 2006 and has four bedrooms and 4.5 baths. The sale price was $2 million, or $389 a square foot.
A third sale is pending in the Sanctuary, Vanatta said, and when it closes, the sale price will notch another 5 percent increment over the Oct. 29 price.
Supply and demand
The two Sanctuary homes were priced in a market niche where there were 29 listings on the market and there had been five sales in the 12 months preceding Nov. 1, according to research by Realtor Doug Labor, of Buyer's Resource Real Estate. Labor is the official statistician for the Steamboat Springs Board of Realtors. His research considered only listings within the city limits of Steamboat Springs and the south valley, excluding North Routt, for example.
Labor's research concludes that if the absorption rate going forward did not improve during the past 12 months, it would theoretically take 70 months for the market to absorb those 29 properties.
However, the supply is even greater for homes listed between $1 million and $1.5 million. Labor said there are 48 listings in that price point, with five sales in the preceding 12 months. That works out to a 115-month supply.
Baldinger said he does not place any emphasis on the calculated supply because in his experience it's almost unheard of for absorption rates to remain stagnant for such an extended period.
However, after just two sales during a period of 12 months in the price point between $2 million and $3 million, the 28 listings represent a supply of 168 months at the prevailing absorption rate, Labor said.
Motivated sellers willing to price their property at a discount of 15 to 20 percent from the original asking price have set the market this fall because that's the pricing shoppers are responding to, Baldinger said.
He expects to see sales trends grow gradually as those shoppers adjust their thinking.
There will be shoppers in the real estate store during the holidays as vacationers arrive in large numbers, but the people who are most serious about Steamboat seemed to also have learned to come in February and March when the snow is the most reliable, Baldinger said.
"That's the activity that turns into sales in early summer," he added.
The sale process is taking longer now than in the recent past when buyers could expect to put down 20 percent, sign the paperwork and close within six weeks.
Now, vacationers shopping for resort condominiums are discovering that they need to bring a 40 percent down payment, which in turn could cause them to revise their expectations or rethink the idea of buying.
"We're starting all over, brick by brick," Baldiner said. "Over months and years, we'll see growing sales volume and growing confidence in the values placed on properties.”