Archive for the ‘Supply & Demand’ Category

Year-to-date Sales Volume and Transactions Worst in Six Years

Thursday, June 18th, 2009

By Susana

My husband watches Wall Street’s Opening Bell on the television every morning. As the trading day opens, his laptop opens. And he stays glued to the market’s gyrations for a good part of the remainder of the day.  The Dow’s graph is created moment by moment and with a click of the mouse he can see back 3 months, 1 year or ten.

Following the local Steamboat Springs, Colorado’s real estate market is not so immediate. Yes, through our MLS system we can follow on a daily basis the individual properties that have sold, been withdrawn from the market, had their price reduced or just been listed, but to get a graph we have to wait until the middle of the following month.  

So today we received from Bruce Carta at the Land Title Guarantee Company the stats for May 2009, year-to-date, and comparisons going back to 2004. And here’s the skinny…

Year –to-date the dollar sales volume is at 30.77% from 2008 (ouch), which was already down at only 49% of our previous, albeit banner, year 2007 (double ouch). The super ouch is that this year’s year-to-date sales volume is at only 54% of 2004! And that’s as far back as the data goes.

And what about the # of real estate sales in Steamboat Springs (vs. $ of sales)?  Equally miserable. L Year-to-date, including an unusual blip of 234 timeshare sales, we’ve had 382 sales (only 148 non-timeshare sales!).  2008 year-to-date had 572 sales, 2007 had 1094, 2006 had 1543 (whew!),  2005 had 960 and 2004 had 617!

How many properties are currently for sale? Roughly 1213 residential units (not including timeshares), 834 land parcels and 595 Commercial listings.

At this rate it will take us seven years to dispose of all of this real estate! And that’s if no new listings come on the market!

I don’t know enough about the intricacies of the stock market. Are there ever stocks that just sit there and take forever to get bought, at whatever the price?  Or does the price just have to get low enough for someone to finally buy? Of course stock investors don’t have to deal with finicky mortgage lenders. Hmm…

Posted in Market Trends, Supply & Demand | No Comments »

What’s Selling in Steamboat, Part 2

Sunday, March 22nd, 2009

By Susana

Yesterday I shared with you, here on our homepage, the Steamboat Springs real estate sales’ numbers from January 1st 2009 to March 21, 2009 (post can be found in our Blog). To compare it to this same period in 2008 and 2007, the Total Sales, Sales Pending and New Listings numbers look like this:

                            2009     2008     2007
Total Sales:              38        133       207
Sales Pending:         29           6          3
New Listings:          332         51          7

Is there any question that this is a buyer’s market? The numbers are all inverted, meaning there is a lot of available inventory to pick from, and for the most part you can take your time looking, analyzing and selecting the property which best suit your needs. The best terms can also be had now because of the historically, incredibly low mortgage rates, in addition to many sellers being willing to be flexible and creative with terms such as move-in dates, covering repair of inspection items, etc. And now, regarding getting the property at the best price? What if we look at what a home sold for, compared to what the asking, or list, price was?
_________________________________________________________________________________
2009                   HIGH            LOW         AVERAGE        MEDIAN        TOTAL $        LISTING# 


LIST $:          $4,200,000,      $42,500,     $670,390,        $399,250,       $25,474,820          38
SOLD $:        $4,100,000,      $40,000,      $624,318,        $370,000,      $23,724,120
DOM:                  718                 24                 240              204 
Sold/List $:         98%               94%            93%             93%                    93% 
 ________________________________________________________________________________________
2008
LIST $:         $5,850,000,       $10,000,      $646,041,       $385,000,      $85,923,500              133
SOLD $:       $5,400,000,          $8,000,      $616,983,       $374,900,      $82,058,833
DOM:                 1756                    0                   265                127   
Sold/List $:          92%              80%               96%               97%            96%_________________________________________________________________________________________
2007
LIST $:          $5,000,000,         $25,500,     $579,572,      $365,000,     $119,971,423         207
SOLD $:       $4,375,000,         $21,000,       $558,575,      $357,500,    $115,625,142
DOM:                1004                    0                 179                 102                                 
Sold/List $:      88%                  82%                  96%                98%              96%
____________________________________________________________________

If I ignore the fluctuations of the highest and lowest priced properties, I can see that the average home, which sold for 96% of the asking price in both 2007 and 2008, dropped only 3%, to 93%, this year. The median dropped 4 to 5%, and the total again only 3%. And when you look at the actual average and median prices, you see that they have increased each year!  So yes, total transaction numbers have dropped tremendously (207 transactions down to 38), as well as total sales in dollars ($116K down to $24K), but average prices have gone up ($559K to $624K), as well as median price (358K to 370K). Bottom line: Lots of properties to choose from, great mortgage rates if you can qualify, or maybe you have cash, and although prices have been rising it does show that Steamboat real estate prices have been, so far, recession proof. Or, others could argue that the prices are unrealistically high, given the economic pulse, and that is why so few have sold. Will they stay that way, or start dropping? You’ll have to stay tuned! Our take: We’re expecting to see some price drops, at least until the market turns around, at which point prices will be heading back up. P.S. If you noticed and are wondering why the most expensive properties had so many days on the market (DOM), they were all new-construction spec homes, which were listed maybe even before they broke ground, and didn’t go under contract until they were closer to their completion date.

Posted in Market Trends, Real Estate Opportunities, Stagecoach / Oak Creek / Yampa / Phippsburg / South Rou, Steamboat Condominiums, Steamboat Lake / Clark / Columbine / Han's Peak / North, Steamboat Single Family Homes, Steamboat Springs Real Estate - General Information, Steamboat Town Homes, Supply & Demand, Uncategorized | No Comments »

What’s Selling in Steamboat, Part 1

Sunday, March 22nd, 2009

By Susana

It seems like every day a friend is asking me: “Are any homes even selling in Steamboat?”

And what do I tell them? Yes, homes are selling, but not a lot.

We’ve seen a lot of activity as far as showing people properties, and have heard that other agencies are doing the same, so people are looking. And folks are looking for serious deals, of which we don’t have a lot; Steamboat’s home owners, knock on wood, have not been forced into foreclosures, for the most part.

So, what’s selling, exactly? I thought I’d take a close look at all of the “Solds” since January 1st of this year.

On January 1st there were 758 residential properties on the market in Routt County. Since then, 38 have sold. And while those 38 were selling, an additional 332 new listings came on the market! I don’t even think I want to do the math on that one! And 29 homes are currently under contract (pending).

Of the 38 that sold in the past 2.5 months, the breakdown looks like this:

·9 Timeshare/Fractional

(All at the Ski Area base)

·9 Townhomes in Steamboat

(2 in the Fish Creek Area and 7 in the Mountain Area)

·6 Condos in Steamboat

(3 Downtown and 3 in the Mountain Area)

·6 Single Family Homes in Steamboat

(3 Downtown, 2 in the Mountain Area, and 1 in the South Valley)

·4 Single Family Homes in Oak Creek/Stagecoach

·3 Single Family Homes in Hayden

·1 Single Family Home in North Routt

Tomorrow I’ll share with you, here, what the homes sold for and how the final sales prices compared to the asking prices. So stay tuned!

Posted in Market Trends, Real Estate Opportunities, Steamboat Springs Real Estate - General Information, Supply & Demand | No Comments »

Creative Incentive: 20% Developer Price Guarantee

Sunday, March 8th, 2009

By Susana Field - 

I believe there is a saying: “Desperate times call for desperate measures.” And “Necessity is the mother of invention.”

Two days ago an interesting email notification came across my desk. It was from a local developer/real estate agent, presenting quite the creative sales offer.

To put it in perspective, let’s just take a quick look at last year’s numbers:

·         The total amount of Steamboat Springs’ 2008’s real estate transactions was down 52% of the average number of transactions over the previous five years (727 transactions in 2008 vs. an average of 1430).

·         Meanwhile, the number of properties for sale at the close of 2008 was up 176% (1,992 vs. an average of 1,132 over the past five years).

So, basically the amount of real estate transactions in 2008 were half of what had occurred for the previous five years average (2007 was an exception). The number of properties for sale at the close of 2008 was on the closer side of having doubled, from the previous five year average. Demand was cut in half, while supply almost doubled. 

Following the old supply and demand model, you would think that Steamboat Springs’ property prices would have had to go down. Maybe even way down. But let’s look at the average price of properties for the same time period: Steamboat’s prices increased half again (148%) of the average, from $417,062 to $617,631!

You could argue that people not wanting to pay the increased average property price of Steamboat’s real estate is what’s keeping so many properties still on the market, and likewise, why the number of transactions is so low.  In fact, Telluride’s numbers show this; they posted both the least price increase and the most real estate transactions, for the Rocky Mountain Region’s ski resort towns.

It makes sense: We buy properties not only to live in, but with the hope of the property appreciating over time. An automatic piggybank, so to speak, that we can enjoy, and even use the mortgage interest as a tax write off, while the piggybank’s wealth grows. We don’t want to buy something that is possibly going to go down in value when and if the majority of those 1,992 listing’s owners really start to squirm and slash their prices. If prices dropped across the board, there would be less appreciation to be made down the line because you would have to wait for the market to go back up to the price you paid, before appreciation can even begin.

Thus, enters the creative offer that came across my desk two days ago. The developer of some new townhomes near the ski area is offering a 20% price guarantee! The terms, quoted verbatim, are these:

·         Developer will escrow 20% of purchase price for 5 years

·         Upon five year anniversary, property will be appraised by neutral 3rd party

·         If property appraises for less than the original purchase price we will refund the difference up to 20%

·         Re-purchase Addendum will be attached to developer contract  

The townhomes range in price from $2,250,000 to $2,455,000, and in size from 3465 to 3779 square feet, with 4 BR/ 3 BA and a two-car garage.

So let’s say you purchase one for $2,300,000. 20% is $460,000, so this is the amount held in escrow. If in five years your townhome’s value has dropped by up to $460,000 (to a value of $1,840,000), you’ll get that $460,000 back. If it has dropped less than 20% of your purchase price, you get less back. If it’s dropped more, oh well. And if it hadn’t dropped at all, the developers pocket the escrowed funds.

Rather than offering a 20% price reduction now, which would bring the value of other properties down, the developers are essentially promising you a 20% price reduction in the future, should the value of the property dictate as such.  It’s a risk reduction for both sides, and an attempt to increase the number of transactions (at least theirs), and listing numbers down (again, theirs), while keeping Steamboat’s prices high.  

Interesting. I’d love to hear what you think.

  

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Posted in Market Trends, Real Estate Opportunities, Steamboat Town Homes, Supply & Demand | No Comments »