The American Dream — Is it still alive in Steamboat Springs?
November 5, 2017
STEAMBOAT SPRINGS — The little bungalow with the traditional covered porch at 2869 Abbey Road on the far west side of Steamboat Springs is a rare bird in autumn 2017. Not because of its architectural heritage but because of its low asking price — just $438,900 for three bedrooms and two baths tucked into 1,462 square feet.
If it doesn't strike you that at just over $300 per square foot, the house is a bargain, it might be time to readjust your thinking. The home, built in 2003, doesn't have a foyer, but it has a spacious living room and master bedroom.
And the home at 2869 Abbey Road is one of a kind. It's the lowest-priced single-family home listed for sale within the limits of the city of Steamboat Springs. There isn't another home for sale in the city right now on the Steamboat Springs Multiple Listing Service, priced under $500,000. There could, however be a small handful still out there – a home on Apres Ski Way, that didn’t show up in a search of Realtor websites, sold Nov. 1 for $474,000.
It’s safe to say single-family homes priced below $500,000 in Steamboat are an endangered species.
Is 2017 the year that Steamboat tips toward down valley growth for good?
Ulrich Salzgeber, CEO of the Steamboat Springs Board of Realtors, confirmed Oct. 30 that the home on a street named after a classic Beatles album represents the bottom of the single-family home market in Steamboat. But the housing market here is tougher than that — in the price point between $499,000 and $600,000, there are just seven more homes on the MLS in the $500,000 range.
And anyone thinking that middle-range townhomes will cover the move-up market might be surprised to learn that as of the last week in October, there was just one offering — three bedrooms, three baths and 2,200 square feet listed for sale in the $500,000 range.
Nick Metzler of Colorado Group Realty said only three of those seven are actually in the city limits; the other four are spread around the western suburbs of Heritage Park, Steamboat II and Silver Spur.
"Certainly, in the city limits, definitely, there's not much opportunity right now to purchase a (single-family) home," Metzler said.
Current trends beg the question: "Is 2017 the year that Steamboat tips toward down-valley growth for good?"
"It's just so tight," Realtor Doug Labor of Steamboat Sotheby's International Realty said, "especially the single-family homes in the introductory market are very tight. There are 21 homes within Steamboat priced under a $1 million now."
Signs of increased interest in purchasing housing in the town of Hayden, a half-hour drive from Steamboat, are plain to see this fall.
Hayden Town Manager Mathew Mendisco said his community of 1,874 (in 2016) has issued 15 residential building permits in 2017. That's not a lot, but it's more than triple the four that were issued in 2016, one in 2015 and none in 2014.
With three new residential permit applications submitted as of Nov. 1, Mendisco is confident the total for 2017 will reach 20 permits.
"We've had calls about two more, and we're working with several developers right now,” Mendisco, said. "In the last month, we've had three preliminary application meetings, one commercial (project) and two residential – one single-family and one multi-family."
Vacation homes play a role in ski town markets
Adding to the tight single-family housing supply here is the large number of vacation homes in Steamboat.
The community Housing Steering Committee, which studied challenges in the market in 2016, reported that an estimated 50 percent of homeowners in Routt County are using their properties seasonally or occasionally (i.e., second homeowners). It wasn't a value judgment — just a market factor.
The result is there is less available inventory for a variety of housing including long-term rentals, entry-level and move-up.
Of the housing segments studied by the Housing Steering Committee‚ it may be the move-up segment that is most impacted by the scarcity of attainably priced single-family homes. These are households that are established in Steamboat and Routt County and seek to move from a small townhome or condo into a larger home. Others simply aspire to a bigger home.
The Housing Steering Committee concluded that the existing gap between demand and supply in the move-up market was 49 units. But the gap was expected to widen quickly, based upon population forecasts. Committee members quantified success in the move-up market as providing 250 new units by 2020, and a cumulative 750 new housing units in that market by 2030.
Realtor Angela Ashby of RE/MAX Steamboat Partners led the working group that reported to the steering committee about that segment of the market. She said this week the shortage of move-up housing supply is having a direct impact on the local business climate.
"Employers can't find middle managers who will stay," here she said. "I hope we can make some changes. It's complex. People are not understanding how much construction costs are, and how much it costs to go through the permit process," to develop new housing.
Ashby acknowledged that the goal of creating 250 units in that segment by 2020 is unlikely to be met, particularly because of the drawn-out discussions between the Steamboat Springs City Council and Brynn Grey Partners. The latter are the successful developers of affordable housing in nearby Summit County, and they are seeking an annexation agreement on property west of the Steamboat city limits in order to develop additional community housing.
Affordable Hayden attracting buyers
Hayden is 23 miles, or about 27 minutes, west of Steamboat with no mountain passes between the two communities. And Yampa Valley Regional Airport is actually inside the town limits. The big wheat field between U.S. Highway 40 and the airport terminal is also in the town limits and looks like it was made for a big box retailer.
A .24-acre building lot in the Lake Village subdivision, which has languished since the real estate recession of a decade ago, sold Oct. 24 for $37,500. And homes in the historic neighborhood of Hayden are turning over on a weekly basis.
An example of what $150,000 will buy in Hayden is the 1,168-square-foot, three-bedroom, one-bath home at 730 West Jefferson St. that recently sold.
And people are buying brand new homes in both Lake Village, in the vicinity of the Routt County Fairgrounds, and Dry Creek Village on the city's east side.
On Oct. 17, a new stick-built, 1,400-square-foot single-family home sold in Dry Creek for $264,936. Developer Falcon Logistics Corp. owns 34 building lots there and intends to deliver 10 new homes per year to the market.
On Steamboat's west side, the developers of the Sunlight subdivision have seen brisk sales of lots in the first phase of their residential project since releasing them in mid-summer.
"We put 24 lots out there and 16 have closed or are under contract," Metzler, a member of the development team said.
One of the most recent sales was for a .172-acre lot on Sunlight Drive that sold for $185,000.
Metzler said that while it may not be easy in the current construction climate, he's confident some buyers in Sunlight will find a way to build a nice home on one of the lots with the entire package in the $500,000 range. However, buyers are discovering that construction costs have risen significantly in the last 10 years.
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"The (price quotes) some of our buyers are getting to build the homes are much higher than they expected," Metzler said.
He's coaching some of the Sunlight buyers to shop for building contractors with the awareness that a builder who is already busy for the spring of 2018 will be more expensive than one who is still trying to line up a project. And there is a younger generation of qualified building contractors who are hungry for work, Metzler said.
At the same time, Metzler said, his development team has become proactive and is in discussions with builders who would be willing to build multiple homes in Sunlight at a time, in order to achieve some economies of scale.
What about shadow inventory?
There is ample evidence at the Routt County Assessor's Office that there is a relative abundance of small single-family homes in the city limits that, based on their last sale price, could easily sell in the $400,000 range.
You can find them in River Place on the far south side, next to Steamboat Christian Center on Dougherty Road and Steamboat Point below Amethyst on Fish Creek Falls Road. There are homes in both neighborhoods where the last sale price on the single-family home homes was less than $250,000. There are also homes that recently sold in the $500,000 range.
"For owners of modest single-family homes here, the question may be something like, 'Sure, I can sell my home at a big profit, but once I sell, can I afford to move up? Or do I have to leave town?'” Labor said. "You have to wonder if people are staying put right now because it's a big jump for them to get something they'd ideally want.”
And suggesting that households in the move-up market simply give up on the dream of a single-family home and settle on a large townhome may not be viable either.
As of the third week in October, there was just one townhome listed for sale in Steamboat in the $500,000 range.
Yampa Valley Housing Authority Board President Roger Ashton succinctly summed up what's at stake in the drive to create more family housing in Steamboat in comments to City Council, "What we know is that to meet the housing goals set by the (steering) committee, we need to adapt a new paradigm or lose our middle class in the Yampa Valley."