Good News in Steamboat Springs – Building Permits Up

It’s been a while here in Steamboat Springs since we’ve had good news on the building permit front, but the first quarter of 2012 finally brought some good news to the Steamboat Springs’ real estate market and undoubtedly to the local construction, architect and interior design industries as well.

So just how good is the news? $4.8 million good with the addition of two Steamboat Springs’ building permits in March for single family homes with a combined valuation of $2.42M. Keep in mind that permit values are always less than the final cost of a home.

For comparison, since I know some people are wondering how a ski resort town like Steamboat Springs could “only have” new building permits of $4.8M on  record as we head into the spring building season:

• 2011 first quarter had 1 Steamboat Springs’  building permit with a valuation of $1.13M within city limits.
• 2010 first quarter had 2 Steamboat Springs’  building permits issued for new homes with a valuation of $4.08M total within city limits.

I tend to look on the glass half full side of things and with pending sales numbers up, Steamboat Springs’ home inventory down in some price segments, and now a jump (small, but still a jump) in home building permits, I’m optimistic about the Steamboat Springs’ real estate market.

Good News: A Real Estate Trend That is Steamboat Springs Friendly

Second home owners are common in Steamboat Springs, and the real estate market in Steamboat Springs thrives on Vacation and Investment Home Buyers seeing the advantages of owning property in Ski Town USA®. The National Association of Realtors 2012 Investment and Vacation Home Buyers Survey, reported that sales of investment and vacation homes jumped in 2011 to a combined share that reached its highest level since 2005. Specifically:

• Investment Home sales increased 64.5% in 2011 vs. 2010
• Vacation Home sales increased 7.0% in 2011 vs. 2010
• Investment Home sales share of all 2011 transactions rose to 27% from 17% in 2010
• Vacation Home sales share of all 2011 transactions rose to 11% from 10% in 2010
• 41% of  Investment Buyers purchased more than 1 Investment Property

Clearly, cash-ready Investors took advantage of the deteriorated housing market in 2011. Bargain home prices and high rental income potential were the main incentives behind Investors scooping up available investment properties. This surge in Investment Buyer spending helped absorb the large number of  foreclosures hitting the market and ensured these foreclosures didn’t linger on the market and further depress home prices in general.

• 49% of Investment Buyers paid cash in 2011
• 42% of Vacation Home Buyers paid cash in 2011
• 50% of Investment Home purchases in 2011 were distressed homes
• 39% of Vacation Home purchases in 2011 were distressed homes

Steamboat Springs’ market saw a large percentage jump in the share of sales below the $300K price point. In 2010, sales of Residential Improved Units under $300,000 made up 33% of total sales, while in 2011 sales of Residential Improved Units under $300,000 made up 48% of total sales. It appears that Vacation and Investment Home Buyers swooped in and purchased a large portion of Steamboat Springs’ distressed inventory, and in the process ensured they’d have access to accommodations for many Champagne Powder winters to come.

January’s Case-Shiller Report: There is a Silver Lining

The clouds are still hovering, but you can find a silver lining in the Case-Shiller January Home Price Indices Report because while home prices are still falling in most metropolitan areas, they are falling at a slower pace. Bloomberg News donned their rose colored glasses as well in one of their Case-Shiller articles pointing out that while we indeed have a long way to go, property values are beginning to steady, and the outlook is a little less negative. As reported in the Huffington Post today, February’s consumer confidence numbers were the highest in over a year, and the just released March consumer confidence data is on par with February’s showing consumers’ resilience and upbeat outlook despite economic mixed signals.

Like the Steamboat Springs’ February Market Report, the January Case-Shiller report had its good news and as I prefer to think of it “work-in- progress” news.

January Case-Shiller Positives

• While both the 10-City and 20-City composites were down -0.8% in January ’12 vs. December ’11 that’s better than the -1.2% and -1.1% they were down respectively when comparing December ’11 vs. November ’11.
• Washington DC, Miami and Phoenix all showed price gains in their markets versus December.
• Denver, Detroit and Phoenix were the three metropolitan areas who posted positive annual gains.

January Case-Shiller Work-In-Progress Areas

• Atlanta, Cleveland, Detroit and Las Vegas continue to have average home prices below their January 2000 levels.
• Atlanta had the lowest annual growth rate (-14.8%) as well as the only double digit negative annual growth rate.
• Both the 10-City and 20-City composites are at all time lows and are 34.4% off their relative 2006 peaks.

It might seem like the work-in-progress areas outweigh the positives, but there are other metrics at play that point to the fact that things are getting better:

• The National Association of Realtors (NAR) just released the February Pending Home Sales report, and while noting they were slightly down (-0.5%) from January, they were 9.2% higher than February 2011.
• The National Association of Realtors also reported last week that while February’s Existing Home Sales slipped (-0.9%) from January, they were still 8.8% higher than February 2011.
• Finally, there’s something to be said for stability over time and getting back on track to levels that historically provide a market with confidence and balance. The latest Case-Shiller report shows the 20-City composite is currently indexed at  135.46. As you’ll see in the chart below, when adjusted for inflation, since 1890, our home prices have remained in a relative band width between 125 & 150, so if we’re beginning to stabilize around 135, that’s actually an encouraging indicator.

Lifestyle in Balance: Steamboat Springs Hill Street Home 

So you’re looking for a Steamboat Springs’ home that’s not too big, but not too small, close to downtown, but not right on or too close to Lincoln Avenue, you love to cook and crave a home with warmth and character, and would ideally love a yard with a water feature and perhaps an area for outside entertaining.

Look no further than 197 Hill Street in Old Town Steamboat Springs . Only blocks away from downtown yet seemingly miles from anything urban, since it’s surrounded by aspens and evergreens. That water feature you’d love to have if possible, well that would be Butcherknife Creek running along the property. There’s nothing like the sound of a bubbling creek to relax by, or when the urge strikes, cast a line into. Walk to town in minutes or jump in your car and be at the Steamboat Ski Mountain in less than 10 minutes. Location is everything, and you’ll have everything you need at 197 Hill Street in downtown Steamboat Springs.

Here’s what’s behind the beautiful exterior that gives a whole new meaning to “curbside appeal” – first impressions are just the start of what awaits:

* Gourmet Kitchen

* 3 Bedrooms and 3.5 Baths

* Open Floorplan

* Timber-Frame Craftsmanship utilizing 150 year old Rock Elm Timbers

* Large Patio Overlooking Exquisite Landscaping

* European Windows and Geo-Thermal Heating

At 197 Hill Street, you’ll find the perfect home in a majestic setting. Fully embrace and enjoy all that Steamboat Springs offers, then come home to your mountain paradise that’s just minutes away, but seemingly hours apart from the thriving world-class “Ski Town USA” you call home.

December Case-Shiller Bleak, But Reasons for Optimism 

From the Wall Street Journal to Bloomberg, David Blitzer, Chairman of the Index Committee at S&P Indices, didn’t have positive news to report upon publishing the December S&P Case-Shiller report.

•  “In terms of prices, the housing market ended 2011 on a very disappointing note.”
•  “With this month’s report we saw all three composites hit new record lows.
•  “If anything, it looks like we might have re-entered a period of decline as we begin 2012.”

Housing Market Ups & Downs

So just how bad were the December Case-Shiller Home Price Indices numbers?

•  The U.S. National Index and the 20-City Composite were down 4% December 2011 vs. December 2010
• The 10-City Composite was down 3.9% December 2011 vs. December 2010
•  Atlanta, Las Vegas, Seattle and Tampa each saw average home prices hit new lows
•  Atlanta, Cleveland, Detroit and Las Vegas have average home prices below their January 2000 levels
•  The National Composite is down 33.8% from its 2nd quarter 2006 peak
•  Seventeen cities of the 20-City Composite have seen monthly declines for at least 3 consecutive months

Case-Shiller Home Price Indices December 2011

What’s the main culprit? While anything this dismal is usually a combination of multiple factors, the one factor that is over-riding everything from the macro perspective is the excess supply of distressed properties that is dragging down the values for all houses. According to RealtyTrac Inc. about 5 million houses have been lost to foreclosure in the U.S. since 2006, and their prediction is that banks may seize more than 1 million homes this year after legal scrutiny regarding foreclosure practices stalled actions against delinquent homeowners in 2011.

So is there a bright note to end on? Yes and here it is – last week the National Association of Realtors reported that sales of previously owned homes in the U.S. rose in January to the highest level in almost two years. January existing home sales increased 4.3% January vs. December. In addition, the inventory level of unsold homes decreased to a point economists consider “healthy”.

One final bright note, because let’s face it, the Case-Shiller December report is a downer – as reported in the Huffington Post,  The Conference Board’s Consumer Confidence Index rose dramatically in February (70.8) as compared to January (61.5). While consumer confidence is still far below the 90 mark that indicates a healthy economy, it’s moving in the right direction – and we need optimistic consumers  to help get the real estate market moving in the right direction as well.

—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

$17M+ Sale Jumpstarts Steamboat Springs’ 2012 Real Estate Year

Steamboat Springs’ January 2012 real estate sales started off on a positive note coming in just ahead of January 2011 sales. A good start is always welcome, and with the snowfall finally taking Steamboat Springs literally by storm this week, things might just be looking up on all fronts!

While local businesses were soft in January due to the minimal snowfall, the recent snowy weather has business owners across the resort market spectrum optimstic about stronger business through March. Reservations immediately picked up for the balance of the ski season as soon as news of our epic, record snowfall on Monday, February 20th  -  27 inches in one day – hit the news.

Highlights from the January 2012 Real Estate Report

• Sales Volume at $42,660,000 was 1.43% above January 2011.
• The number of transactions (66) was down 51.47% vs. January 2011, driven by a large decrease in Fractional sales which numbered 78 in January ’11 versus only 13 in January ’12.
• There were 14 Bank Sales that accounted for just over 5.5% of the overall sales, down from 18 Bank Sales in December and 15 in November.
• 64% of Residential Improved Unit Sales were under $300K and 85% were under $500K continuing the trend of entry level price points dominating the Steamboat Springs’ market in 2011.
• South  Routt County had the highest share of Dollar Volume as a result of one very large $17M plus sale outlined below.
• The Mountain Area, usually top in sales dollar and transaction volume, came in second in dollar volume share at just over $6.2M, but did maintain the top spot in number of sales transactions with 20.
• There were 6 total sales over $1M with 3 of these sales being over $3M.

Highest Priced Sale for January 2012:

1/18/2012 $17,650,000 M&B: Section 21,22,27,28-5-84 aka Yampa Tailwaters.  This is a Development parcel that has three residential improvements with a total of 3,462 SF Living Area – 6 Bedrooms and 3 Baths.  YOC 1951.  There are also 13 ranch outbuildings on the site totaling: 7,716 in Square Footage.  The total acreage is: 514.82 AC.  It is located in theSouthRouttCountyarea at:31370 State Highway #131

Highest PPSF’s for January 2012:  (two listed since the first one has a land-value factor)

1/27/2012 $800,000 Metes &Bounds in Sec 12-6-88 aka11505 US Highway #40–2 Bedroom 1 Bath YOC 1925 with 1,280 SF Living Area on 295.00 AC.  This property is located in the Hayden area.  PPSF is $625.00.

1/30/2012$693,500 in Howelson Place Condo Unit B301 aka703 Lincoln Avenue, B301 – 2 Bedroom 2 Bath YOC 2008 with 1,131 SF Living Area.  This is a new construction unit located in Downtown.  PPSF is $613.17.

—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

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.

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