No Cookie Cutter Pricing in Steamboat Springs Real Estate

As a recent article in the Wall Street Journal  pointed out, “It’s not easy being a home builder these days.” That’s a logical conclusion to come by given that:
* Total home sales are at record lows
* Foreclosure prices are luring potential new-home buyers away
* People often can’t qualify for loans despite low mortgage rates

Even Census Bureau data points to a ‘New Normal’ for new single-family home prices.

Rick Palacios, a senior analyst at John Burns Real Estate Consulting, pointed out that since new-home prices peaked in 2007, new single family sales of more than $500,000 have gone from 13% to 6% of the market. Sales of new homes priced under $300,000 now account for roughly 75% of all new single-family sales. Buyers want affordable homes and what people can afford on average has gone down.

Looking at 2011 existing home sales in Steamboat Springs, entry level price points dominate the share of sales. But be careful because these numbers can be misleading; most of these sales were comprised of condominiums and were in fact second or vacation homes, not primary residences. And yes, this data focused on existing, not new home sales. But affordable is affordable…new, old or in-between.

Real estate is indeed local, and while Steamboat Springs has had its share of foreclosure sales, there continues to be demand for luxury primary and secondary homes.

Have it Your Way – Made to Order Mortgage Loans

According to a recent article in the New York Times, “Loan Terms Made to Order” are more common than you’d think. You can get creative with mortgage loan terms if you know what to ask for and you have a length of time in mind. More borrowers are asking for and getting fixed rate loans with terms outside the standard 15 and 30 years; these custom mortgages are prevalent in refinancings.

In 2011, nearly 17% of all refinanced mortgages were comprised of “other length” fixed rate loans according to the Mortgage Bankers Association. Most of these terms were for 20 years, but 10, 25 and 40 years were not unheard of and if you do your homework, you’ll even find lenders who will agree to “oddball” terms like 16 or 7 years.

Fees could be higher for oddball terms like 16 or 7 years, but if you have a reason, like kids graduating  in 7 years or retirement planned for 16 years from now, and you want to peg your mortgage term to those time-frames, then by all means search for a lender to accommodate you because they are out there.

In addition, option-arm mortgage loans are still a viable choice for many people, and can save the day in unexpected ways as I outlined in this blog at the end of last year. As with any financial decision, ask your mortgage professional to compare payments, interest rates etc. for different scenarios and then bring in your financial planner to ensure your other financial goals will work with a proposed change in mortgage payments.

The important thing is not to assume it can’t be done, because while many people don’t realize it, the 20 year mortgage is now quite a common alternative to 30 and 15 year mortgages for those who know to inquire about it.

—For more information on buying real estate or questions regarding Steamboat Springs real estate  in Steamboat Springs, Colorado, feel free to call Charlie at 970-846-6435 or write me an email at: charlie@steamboatsmyhome.com

Thanks,

Charlie

Entry Level Price Points Dominate Steamboat Springs 2011 Sales

Steamboat Springs’  2011 real estate market  was ripe with investment opportunities as it was dominated by sales of homes priced under $200,000. Condominiums made up most of these sales, and now that these bargains are off the Steamboat Springs market, there’s not much inventory at the lower price points as compared to last year. Here’s a Steamboat Springs real estate snapshot by the numbers:

• Homes priced below $200,000 comprised 36% of 2011 sales
• 26 condos sold in 2011 for less than $100,000 (of these, 16 were bank owned)
• 45 condos sold for prices between $100,000 and $200,000 in 2011
• 52% of 2011 Steamboat Springs’ sales transactions were for less than $300K
• Currently only 9 condos are listed on the market priced less than $100K and only 39 condos on the market reside in the $100K-$200K price range

Steamboat Springs’ low end supply has dwindled – but it remains uncertain as to whether that will equate to an increase in the lower end price base. Privately owned homes had to compete with a good percentage of bank owned sales last year and that drove prices down. Steamboat Springs’ shadow inventory, homes that are still in the bank-owned system that haven’t hit the market yet, is an overhanging question mark. If there is significant shadow inventory still remaining, it could keep Steamboat’s prices low as those homes cycle through the banking system and hit the market throughout 2012. Conversely, if the banks have run through their low end inventory and demand starts outpacing the supply of privately owned homes, then Steamboat Springs’ home owners will have more confidence as well as the leverage to ask for (and get) higher prices.

One final note about the entire piece of the Steamboat Springs’ 2011 real estate sales pie, with 52% of 2011 sales being homes less than $300K, the share of sales was taken from the middle range price points, those priced from $300K to $800K. Homes priced from $800K to $3M+ have seen very little change as a percentage of transactions from 2007 to 2011.

Steamboat Springs real estate has always been and will continue to be a great value buy. Whether buyers will continue to have ample options to purchase Steamboat Springs real estate for under $200K remains to be seen. The economic laws of supply and demand would indicate that perhaps the Steamboat Springs real estate market is about to see a lower end price adjustment to where private home owners won’t have their home prices held hostage to bank owned home prices.

—For more information on buying real estate or questions regarding Steamboat Springs real estate  in Steamboat Springs, Colorado, feel free to call Charlie at 970-846-6435 or write me an email at: charlie@steamboatsmyhome.com

Thanks,

Charlie

Steamboat Springs’ 2011 Real Estate Numbers Leave Room for Improvement

Steamboat Springs’ real estate market did not earn great marks in the recent Colorado Mountain Resort Real Estate Trends released by Land Title Guarantee Co. As compared to 5 other Colorado ski resort counties, Routt County, home to Steamboat Springs, is the only county that decreased 6% or more on 5 key benchmarks* in 2011 as compared to 2010:

• Gross Sales Volume: -12.01% (Eagle & Grand Counties were down >6% as well)
• Number of Transactions*: -23.06% (All other counties were flat to up
• Single Family Average Home Prices: -22.73% (Eagle & Garfield Counties were down >6% as well
• Multi Family Average Home Prices: -33.52% (Eagle, Garfield & Summit Counties were down >6% as well)
• New Development: -52.51% (Eagle, Garfield & Summit Counties were down >6% as well

* For Routt County specifically, there was a high number of fractional sales transactions in 2010 vs. 2011, so if you net out fractional transactions and compare improved units sales transactions only for 2010 vs 2011, Routt county is actually up almost17%.

Steamboat Springs’ Routt County real estate market historically has been most comparable to Summit County, home to Breckenridge, Keystone and Copper Mountain ski resorts. In 2007’s real estate market peak, Routt County/Steamboat Springs reported $1.58 billion in sales while Summit County earned $1.63 billion in sales. Fast forward to 2011, and there is a much wider gap in real estate performance on key metrics:

2011 Sales Dollar Volume
Routt County, Steamboat Springs = $450.6M (-12.01% versus 2010)
Summit County = $684.2M (-2.03% versus 2010)

2011 Single Family Homes Average Price Per Square Foot
Routt County, Steamboat Springs = $229.35 (-17.77% versus 2010)
Summit County = $252.68 (-6.11% versus 2010)

2011 Single Family Home Average Price
Routt County, Steamboat Springs = $631,224 (-22.73% versus 2010)
Summit County = $734,262 (-4.74% versus 2010)

While these 2011 year end numbers are certainly not good news for Steamboat Springs when compared to short term history, what they do point to is the potential for great improvement in the Steamboat Springs real estate market as we move into 2012. Reasons for optimism include: new jobs in the coal mining industry, lower inventory than we’ve seen in a while and aggressive sales and development plans for some key real estate projects. And for Buyers, Steamboat Springs is an incredible value right now, but inventory is decreasing  in some key price segments. It remains to be seen how  long it’ll be before the supply/demand equation tips the scale to increasing prices in some of the more sought after price segments.  

As I’ve stated before, the real estate market is local, and Steamboat Springs is not on the I-70 corridor which captures the majority of Denver visitors, a real estate market that has rebounded already. Steamboat Springs pulls a good portion of its buyers from out-of-state feeder markets many of whom have not had economic rebounds as yet. While poised for growth, the Steamboat Springs real estate market is somewhat more dependent on the national economic recovery and the availability of affordable mortgage financing for second/vacation homes than some of the Colorado ski resort counties we benchmark ourselves against.

—For more information on buying real estate or questions regarding Steamboat Springs real estate  in Steamboat Springs, Colorado, feel free to call Charlie at 970-846-6435 or write me an email at: charlie@steamboatsmyhome.com

Thanks,

Charlie

The snow banks might not have been high around Steamboat Springs at the end of 2011, but the Steamboat Springs real estate market ended the year on an overall positive note. In hindsight, the real estate market in Steamboat Springs is still trying to achieve sure footing on what has been a slippery slope throughout 2011, but there are some positive signs where a year ago we were not seeing much to be optimistic about. While some price points are doing well, others are struggling, and bank owned sales are driving actual dollar volumes down overall. So what does it all mean? While there are signs of reasons to be optimistic, there are some critical factors involved that will keep the market on its proverbial toes:

• the number of foreclosures poised to hit the market that haven’t yet (shadow inventory)
• the unemployment rate both here in Steamboat and in feeder markets where many second home buyers come from
• the ease (or lack thereof) of getting financing – there are strict requirements for obtaining second home financing, and as long as they are in place, it’s a deterrent

Snow Making at Steamboat’s Howelsen Hill

Factors (like snowfall) over which we have no day-to-day control over will continue to play important roles in how quickly we see sustained real estate improvements in Steamboat Springs. In the meantime, here’s a recap of how we ended 2011 which is something to take a moment to be thankful for before turning to 2012, and starting a new year with a fresh perspective.

136 December transactions brought in just over $47M in sales volume. December 2011 transactions were up 72.15% over December ’10 transactions, but at $47M in sales we were down 13.19% versus December 2010.

Year end comparisons of 2011 versus 2010 are a little disappointing, but are driven in large part by the 3 macro economic factors listed above:

• 2011 ended with a total of just under $450.6M in sales,  down 12.01% from 2010 year end
• 2011 total transactions numbered 1398, down 23.06% from 2010 year end numbers

On a positive note, inventory is down which means those homes still on the market will have greater value to prospective buyers who desire to liveSki TownUSA.

December 2011 Routt County Real Estate Report

Highlights of the December ’11 Real Estate Report

• 12 transactions were $1M plus
• Bank Sales were back up at 18 after being at 15 in November and only 6 in October
• The Mountain Area continued its sales and transaction dominance with 27.2% of the month’s transactions (37) and 50.3% of the month’s sales volume ($23.7M)

Highest Price Per Square Foot (PPSF) Sale for December 2011:

12/30/2011: $2,825,000 Edgemont Condo Unit 2803 aka2410 Ski Trail Lane, #2803–5 Bedroom 5 Bath YOC 2009 with 3,642 SF Living Area.  PPSF is $775.67.  This is a new construction sale onSteamboatMountain.

Highest Priced Sale for December 2011:

12/29/2011: $4,500,000 City South Subdivision Lot 1, Mid Valley Business Center #2Lot2, M&B: Sec 20-6-84 – 3 Commercial Parcels:  All Vacant Commercially zoned, with a combined land size of 14.52 AC.  This property is located at1440 Pine Grove Road.  PPAC is $309,917.  This was a Bank Sale. 

Other December Sales over $1.4M:

12/28/2011 $2,050,000 Sanctuary Subdivision #5 Lot 132 Re-plat aka 3050 Clearwater Trail –  4 Bedroom 4.5 Bath YOC 2006 with 5,808 SF Living Area on 1.48 AC Land.  PPSF is $352.96.

12/14/2011: $1,425,000 Big Valley Ranch at Steamboat Subdivision #2ALot25 aka28880 Skyline Drive– 3 Bedroom 3.5 Bath YOC 1992 with 4,636 SF Living Area on 36.10 AC Land. PPSF is $307.38

—For more information on buying real estate or questions regarding Steamboat Springs real estate or renting a home in Steamboat Springs, Colorado, feel free to call Charlie at 970-846-6435 or write me an email at: charlie@steamboatsmyhome.com

Thanks,

Charlie

No snow over the Christmas holiday is bad news for the Steamboat Springs Ski Mountain, but at least the snow making machines have been able to compensate with the man-made stuff and turned what could be really bad into something passable. If only there was some magic wand to wave over the housing market so things would start to pick up and stay up. The Case-Shiller October Home Price Index is not showing any news we can feel good about on a national level. The October report yields the following less than optimistic news:

* 19 of 20 cities showed home price decreases versus September numbers

* Versus October 2010, the 10 and 20 city composites posted annual returns of minus 3.0% and -3.4% respectively

* Versus September 2011, the 10 and 20 city composites were down 1.1% and 1.2% respectively

* Four markets (Atlanta, Cleveland, Detroit, Las Vegas) show prices below their January 2000 levels, while Atlanta and Las Vegas posted new lows in October

* Both the 10 & 20 city composites are barely above their all-time lows and from their peaks, the 10 city composite is down 31.9%, and the 20 city composite is down 32.1%

There is a caveat: real estate is local, and the Steamboat Springs market just posted some strong November numbers. Other areas where the local news is better include:

• * Detroit which while still below January 2000 levels, is up 2.5% over October 2010
• * Washington DC up 1.3% over October 2010
• * Phoenix which is up .3% vs. September 2011 (after 3 straight declining months) 

While the national numbers are bleak, there is rationale for the dismal report which at least helps us understand the dynamics in play:

* there continues to be a weak labor market

* high foreclosure rates in many areas are keeping home prices depressed

* fall is typically a slow sales period for homes after the busier late spring and summer months

* loan qualifications are rigorous and higher down payments are required by most banks

* would-be buyers lack confidence that the housing market has bottomed out, so they are waiting it out

Given 2012 is literally just around the corner, and it’s an election year as well, there will be many economic trends and political maneuvers to watch as we turn the calendar page. While we may remain on the roller coaster for a while, it’s my hope that everyone stays on for the ride because there are great values to be found, and like the snow that’s inevitable in Steamboat, the market turn-around will happen, and not a moment too soon.

—For more information on buying real estate or questions regarding Steamboat Springs real estate or renting a home in Steamboat Springs, Colorado, feel free to call Charlie at 970-846-6435 or write me an email at: charlie@steamboatsmyhome.com

Thanks,

Charlie

For those who were seeing the glass half empty as mud season rolled into November, there was definitely more to be thankful for than family, friends, football and turkey on the horizon. What we lacked in snow fall, we made up for in real estate sales in November. November real estate sales were great. And looking at the recent absorption rate, I’d say the Steamboat Springs Real Estate Market is looking much better.

( Please note: I recently blogged about the attributes of “knowing the market.” The stats came out today with a rather large error. I caught it and researched it. There was not a $11 million dollar transaction in Steamboat. So I re-calculated the numbers with a more accurate sales price. The graph below is with the corrected amount – see *)

125 transactions netted just under $44M * in gross sales volume which equals a 64% increase in gross sales over November 2010. In a year full of negative comparisons, this huge increase versus last November has narrowed the year-to-date gap in sales volume to under -10%. The number of transactions year-to-date is down 27% versus last year, but up 34% from last November.

Dare we say that Tim Tebow’s (Denver Bronco’s QB) magic might be rubbing off on real estate sales in Steamboat Springs? Sometimes you just have to believe that value is appreciated, and we sure have a lot to offer here in beautiful Steamboat Springs! So our 4^th quarter is shaping up to be potentially “Tebow-like” here in the Yampa Valley.

As the ski mountain opened on November 23^rd with the annual SSWSC Scholarship Day fund raiser, the community began coming to life with the start of the ski season. With only weeks until Christmas, the snow finally starting to fall, hotels and condos filling up and the ski mountain opening up new lifts and runs “the season” is upon us!

View entire NOVEMBER Real Estate Report – but remember the $11 Million sale is wrong

Highlights from November Routt County Real Estate Report

* 11 transactions were $1M plus.

* Bank sales were up from October (6) with 15, but still down from September (18) and August (17).

* The Mountain Area still ranked #1 in Sales Volume and number of Sales Transactions (net of time-share/interval sales) with $20.4M in Mountain Area sales comprised of 36 transactions.

The Highest Priced Sale and Price Per Square Foot (PPSF) for November 2011

11/21/2011 $4.200,000 (estimated) Catamount Ranch Subdivision Lot 8 aka 33800 Catamount Drive – 5 Bedroom 10 Bath YOC 2000 with 10,358 SF Living Area on 7.04 AC Land.

Sales over $1.5M in November 2011

11/29/2011 $2,475,000 Robbins Subdivision Lot 117 aka 0674 Steamboat Boulevard – 5 Bedroom 6 Bath YOC 2007 with 7,305 SF Living Area on .60 AC Land.  PPSF is $338.81.

—For more information on buying real estate or questions regarding the  Steamboat Springs MLS in Steamboat Springs, Colorado, feel free to call Charlie at 970-846-6435 or write me an email at: charlie@steamboatsmyhome.com

Thanks,

Charlie

A friend of mine reminded me of a great business practice the other day when she told me about her experience listing her town home in a down market with lots of town home inventory in a suburb of Atlanta back on 2004. In her development alone there were 200 town homes all under 3 years old, and 72 were for sale at the time she was looking to sell. That’s 36% (more than one out of 3 for sale), and many newer developments already built (but unsold) with developer incentive deals in the competitive mix as well.

The fairly daunting scenario was not lost on my friend as she had been around the home selling/buying block more than once before. Her real estate agent met with her, and after seeing some hesitancy in agreeing to a realistic price for the current market – not an outright “no”, but more an attitude of disbelief that she’d have to go ”that low”, her real estate agent outlined the perfect next step.

“Give me 2 hours this weekend to show you what you’re up against in your own development, and then if you want to see any more competition in a 1 mile radius, we can follow up with that,” requested her agent. Understanding that a home sale is an important financial decision, my friend agreed, and her agent proceeded to set up appointments to see 20 of the 72 town homes listed within the boundaries of her development the next Saturday.

Needless to say, it was time well spent. She realized not only what she was up against price wise, but also model layout wise. Her town home had been in Phase 2, and Phases 3 & 4 definitely incorporated improvements and upgrades. She didn’t need to go outside the confines of her development to get any more comps.

 Long story short, she did the following:

* priced her town home correctly

* got an offer under that price within 3 months

* considered the differential in mortgage payments vs. the lower than desired offer if she kept her place on the market

* determined that she might not get another offer within 3 months which was the break-even month, when selling now would start paying off assuming she got a full asking price offer 3 months from now, which was unlikely she knew

* accepted the offer

* closed the following month breaking even despite a really challenging market

What did it take to sell a very “standard” town home when so many factors were seemingly working against a sale, let alone a quick sale?

* a realistic real estate agent who was willing to take her time to go through an exercise to educate a client

* a real estate agent who took control of the situation before the pricing battle was lost, and the town home was listed at an inflated price

* a receptive seller who was willing to keep an open mind and do her due diligence

* a logical seller who took the emotion out of it and “ran the numbers” so to speak first in pricing her town home, and then in accepting an offer under her asking price

Do all these factors always exist and converge into a success story? Of course not, but as real estate agents we should take the proactive approach, communicate honestly from a position of confidence, set realistic expectations and guide our clients as best we can to the best possible outcome given the agreed upon desired result.

—For more information on buying real estate or questions regarding Steamboat Springs real estate or renting a home in Steamboat Springs, Colorado, feel free to call Charlie at 970-846-6435 or write me an email at: charlie@steamboatsmyhome.com

Thanks,

Charlie

When someone tells you that a local real estate agent posted a great blog, you might be surprised that it’s not a blog on real estate market trends or simply straight listing information copied and pasted from a marketing brochure. Good real estate agents  realize that when people look for a home, they are looking for more than square footage, they are looking for a lifestyle to compliment their perfect home. From schools to shopping to annual, holiday and special events, a community is comprised of day to day opportunities that add to your overall quality of life and get you out of the home you and your realtor so carefully selected for you.

It’s my goal to inform potential clients (or remind current ones) of just how awesome it is to live in Steamboat Springs, CO. If someone is contemplating buying a primary or secondary residence in Steamboat Springs, I want them to know that Steamboat Springs is not just a fabulous, world-class ski resort, it’s a full-fledged community with homecoming parades, July 4^th celebrations, summer concerts, neighborhood garage sales and Halloween celebrations. It’s my intention to let people know that buying a home in Steamboat Springs is buying into a healthy, outdoor focused year-round lifestyle that they’ll be able to enjoy part-time, full-time or for any amount of time they decide to spend in our beautiful Rocky Mountain Yampa Valley.

As we head into the heart of the holiday and ski seasons, I’ll be focusing my communications on why Steamboat Springs is the perfect place to call home. Those of us who live here know it’s an amazing community, and I’d like to share how we spend our days and nights in a town three hours from Denver that is snow covered from November through May. If anyone would like to join us here on a permanent or part time basis, we have plenty of wonderful homes, condos and time shares available, and I’ll be happy to show them to you as well as tell you about Winter Carnival, the lighted man, the Valentine’s Day torch parade and the Steamboat Springs Winter Sports Club – which gets us  through April…and it doesn’t stop there. Stay tuned for hiking, biking, fishing, camping and more as spring turns to summer in Steamboat Springs.

For Sale:  ½ acre waterfront lot on the trout laden Yampa river in heart of Steamboat Springs, Colorado. Sounds great right?  Soothing sounds of the river and trout fishing right in your back yard. One of the last remaining riverfront lots within the city limits of Steamboat Springs. Supply and demand might place the value of this lot to over half a million dollars. But given a fairly recent change in national building codes, this riverfront lot value is cut in half.  That’s right, $275,000 for riverfront property.   But thanks to some brainstorming of local Realtor Charlie Dresen and local architect and builder, Jeff Gerber and Hans Berend of Gerber / Berend Design Build, this riverfront lot could be the buy of the year.

Fallingwater comes to mind when I think of this lot. This Frank Lloyd Wright single family home has been an inspiration for decades and this inspiration can translate into the Steamboat lot.   The restrictions that limit the building according to Steamboats and Routt county building department, also allow for cantilever construction. And Fallingwater, a Frank Lloyd Wright masterpiece has some cantilever construction and running water.  I’m not saying you can build a home over the Yampa river or cast to rising trout off your back deck, but you can extend closer to the river than what the FEMA Floodway restricts.

Back in 2005, after Hurricane Katrina, FEMA made an assessment that they need to impose building restrictions on all water ways in the United States. So even though FEMA has never set foot on this waterfront lot in Steamboat, Colorado, they designate where one can and cannot build. Hence, one is restricted from building a home too close to the river.  Many who have looked at the lot do not like these restrictions and see this as a problem. And I don’t blame them. But as a realtor in Steamboat Springs, I come up with solutions. Thus, utilizing a cantilever building technique that at the right elevation, can extend over the FEMA floodway, you will have river views, river sounds, and a really cool home in Steamboat Springs, Colorado and some of the best trout fishing in Colorado.

Here’s some idea of a great home.