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.

Steamboat Springs February 2012 Market Report

Steamboat Springs’ real estate market started strong in January with $42.6M+ in sales that included one large $17.6M sale of the Yampa Tailwaters property. So while February ’12 solidly beat February ’11 by 6.7%, at just under $22.5M, February sales might seem a little anti-climatic.

To find the icing on the cake we need to look at the number of Pending Steamboat Springs Sales on the books. Here’s a snapshot of how pending sales are trending upward and should yield healthy numbers in the next two months as these sales close:

• January 1, 2012: 71 Pending Sales
• February 1, 2012: 77 Pending Sales
• March 1, 2012: 102 Pending Sales
• March 21, 2012: 121 Pending Sales 

Other good news from an economic supply and demand perspective: It’s been over 2 years since the number of listings in the Steamboat Springs MLS has been this low.:

• March 21,2012 # Listings in Steamboat Springs’ MLS = 1,771
• March 1, 2011 # Listings in Steamboat Springs’ MLS = 1,873
• March 1, 2010 # Listings in Steamboat Springs’ MLS = 1,969

As home inventory supply tightens, laws of economics will tell you that the real estate market and home prices will heat up.

There’s a mixed bag of news all over the country; Steamboat Springs is not the only real estate market sending mixed signals among different metrics and price points:

• The Phoenix market has been pummeled as the Case-Shiller Price Index points out month after month, but in the lower price points (under $200K), the selling atmosphere mirrors that of the Phoenix market’s peak 2004-2005 years with multiple offers coming the same week a property is listed resulting in sales prices above list price. So even though the market is currently competitive in only the lower end segment, the market dynamics are signaling the buyer’s market may be over.
• Late last month the National Association of Realtors reported that nationally, pending home sales are on an upward trend, and the January Pending Home Sales Index is the highest since April 2010 (when buyers were rushing to take advantage of the home buyer tax credit).
• The National Association of Realtors just reported that February existing home sales slipped, but are up strongly (+8.8%) from February 2011.

So what’s the take away? Back to the icing on the cake…the past 5 years have not been kind to the Steamboat Springs (or any city’s) real estate market,  but no business cycle is sustainable forever, and that goes for a down market having to turn around and rebound at some point too. It’s my belief that the Steamboat Springs’ turn-around point is here. There is pent up demand:

• first time home buyers who have been waiting to sell
• investors who have been waiting to buy/sell 
• home owners who have been waiting to sell
• renters who have enjoyed low rents for the past few years who are now seeing rents rise to the point of not being worth passing up the lowest mortgage rates in history

All these things combined, indicate to me that there is going to be a turn-around this year in Steamboat Springs’ real estate, and it will positively impact more than just the lower price points. Just like the spring weather has come to Steamboat Springs a little early this year, I’m feeling a warming up in our Steamboat Springs real estate market.

Highlights from the February 2012 Steamboat Springs Real Estate Report

* February’s sales at just under $22.5M were 6.7% better than February 2011

*  There were 10 Bank Sales, down from 14 in January, 18 in December and 15 in November

* 50% of Residential Improved Units Sales were under $300K and 71% were under $500K

* The Mountain Area was top in % of $ Sales with 43.9% of February’s $ Sales

* There were 3 sales over $1M

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.

Steamboat Springs - Upscale Dude Ranch – 18 Miles from Downtown!

Steamboat Springs has a lot to offer for warm weather activities and summer vacations, but what might not come immediately to mind is an all-inclusive vacation at one of the best dude ranches found west of  the Mississippi. About a half hour outside of downtown Steamboat Springs, in the Elk River Valley, you’ll find The Home Ranch. There’s something to be said for the name, as you’ll enjoy western hospitality at it’s finest with gourmet cuisine, lodging options that include private cabins and live music around a big, warm campfire.

What’s a day like at The Home Ranch? Well after a scrumptious breakfast you can:

• Go for a hike in the Rocky Mountains with a guide or by yourself if you prefer
•  Go horseback riding and/or take equestrian lessons
• Enjoy fly fishing at its finest, and endorsed by none other than Orvis
• Swim in the on-site pool
• Let your kids enjoy the outdoor adventures in the Children’s Program
• Take the shuttle in to Steamboat Springs to shop, relax in the hot spring pools, bike the core trail, attend a festival or any number of Steamboat Springs’ summer activities
• Hayrides, barn dances and dinner shows are offered throughout the week on The Home Ranch grounds
• For next winter, keep in mind that The Home Ranch offers cross country and skate skiing along with a host of winter activities

Of course Steamboat Springs is known for skiing and can proudly boast its Champagne Powder® and Ski Town USA® name, but this time of year when spring and summer are just around the corner, you might not think of Steamboat Springs for an all inclusive summer vacation…now you can. Steamboat Springs and The Home Ranch offer an unbeatable western experience and with summer activities and events every week. The Yampa Valley and Elk River Valley welcome you for a summer get-away you’ll never forget.

Charlie Prefers Face-to-Face Meetings in Steamboat Springs

I read two things this morning that had me mulling over how important it is to meet with clients face-to-face. As an off-the-beaten-path (in a great way!) resort town, Steamboat Springs gets lots of initial inquiries via phone and email, but the sooner I can meet in person with someone the better. I understand the importance of knowing how clients prefer to communicate, and I posted a blog on just that topic on SteamboatsMyHome.com.

Here’s what caught my eye this morning, that strengthened my belief in face-to-face meetings sooner rather than later with potential clients, and periodically with current clients:

Proof Point #1: A featured post on the real estate site, Active Rain, by Judi Barrett titled: “Are You Pricing Your Home to Sell or Pricing it to Keep?”

• This is the perfect question to ask someone who has had their home on the market for a while, who has done the appropriate staging inside, ensured maximum curb appeal on the outside, and has ample marketing support from their real estate agent, but still hasn’t obtained an offer.
• But this is not a question I’d want to ask in an email, or even over the phone. Nope, this is a sit down together let’s have a heart-to-heart conversation about what your pricing motivations are.
• While it’s the perfect question that should lead to a productive conversation,  it could be taken totally out of context and cause a client to get defensive if it’s simply asked in an email or over the phone in a quick “do you have a minute” phone call.

Proof Point #2: An Inc.com post by Rene Siegel, owner of High Tech Connect, that was titled: “5 Reasons You Need to Meet in Person”. Here they are and my shortened (one example each) of how this relates to real estate:

1. You’re off the record: Ever tried to have a home buying/selling conversation with someone at work and their employer doesn’t know they are leaving?
2. Make use of not-so-small-talk: Small talk is what builds relationships that are important in real estate – small talk is much harder to foster in an email, text or phone call.
3. Make an impression: Just like some internet dates are flops, you can spend a lot of time working with someone over email, and when you meet it just doesn’t click for one or both of you.
4. Read the body language: What people say and how they feel as judged by body language can be two totally different things – hearing words while seeing body language gives you the upper hand every time.
5. Learn where the action is: the sooner a client comes to your office they see and know your personality much better, or when you go to their home you immediately see what needs to happen to list it or if it’s perfectly ready to put on the market as is.

—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

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.