STEAMBOAT SPRINGS REAL ESTATE MARKET IN TRANSITION

What does a transitional market (the transition from old Steamboat to new) look like? Here in Steamboat Springs, Colorado, we are getting very mixed signals regarding the state of our real estate market. On one side, the past few weekends saw the largest number of foreclosures in the paper. On the other side, we are seeing property closings at the Steamboat base area for record price per square foot numbers
(Edgemont closings) (One Steamboat Place closings). Prices above $1,100 per square foot! These are incredible numbers for Steamboat Springs.

Personally we feel we are seeing a validation of Steamboat as a viable high end destination resort by the customers of the Vail, Aspen and Telluride type markets who recognize the long term value represented here. These buyers place a high value on the incredible family memories created in resort locations like Steamboat. They understand they are buying a very rare commodity (ski in/out property for the base area projects), and they also see the transition taking place at the base area. The developers of the Edgemont and One Steamboat Place are offering an experience never before available in Steamboat.

While the above paragraph is a great sign for Steamboat’s long term future, it does not change the near term reality for many property owners. The current economy is creating a great deal of pain, which will result in foreclosures and short sales. This trend is most likely far from over in our local market, which is a scary thought for property sellers. The next year may see lower sale prices due to distressed sellers.

Everyone loves a prosperous, fun environment and unfortunately, Steamboat was late to enter the real estate slide and will most likely be late to exit into recovery. A number of local economic fundamentals are aligning to make the next year a very difficult one for property owners. For example, a quick analysis of the daily classified section reveals very few job opportunities, but many properties for rent. This is a complete reversal from 2007.

What do we do? When do I buy? Am I getting in at the bottom? These are all questions we hear on a regular basis. Our answer is, “Find the best value that meets your needs in today’s market and make the best purchase you can”. Timing the bottom is virtually impossible and will only be clear when it is too late. What we know today is that prices have come down significantly from the peak, many sellers are in distress, inventory is high, INTEREST RATES ARE LOW and it’s a buyer’s market. It is not every day that these conditions line up. Check out our recent post on real estate values vs. interest rates from 1975 to 1993. Weighing historical data along with recent economic indicators (see our post on Randy Rowe’s round table discussion, and today may be a truly unique, long term opportunity.

If you have any questions or wish to discuss any of the items mentioned above, email chris@mybrokers.com or call 970.819.1432