Colorado Group Realty Insider - October 2020

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How’s The Market?

A September flurry of activity capped off a record breaking third quarter for
real estate sales in Routt County. The surge in demand is the result of people
wanting to live or have a vacation home in the Colorado mountains as people
reconsider how they work and live during and after the COVID pandemic. Sales
volume in September alone was an astounding $178M. When compared to last
year’s healthy $65M the results are staggering. For the 3rd quarter (July, August,
September), there was $434M in closed sales volume, well more than double the
volume of any previous quarter.
The story is the same in resort communities across the country, especially
Colorado mountain towns. Telluride sales volume is up an astonishing 120% YTD,
while Aspen (+72%), Crested Butte (+38%) and Vail (+29%) are seeing massive
increases in activity as well.
Not surprisingly this activity has caused inventory to drop to all-time lows. There
are now only 203 residential properties for sale in Steamboat Springs. When you
remove the 67 fractional units, that leaves only a measly 136 properties on the
market. A market is considered in balance when there is around six months of
available inventory. With only 2.6 months of inventory, Steamboat is clearly in an
extreme sellers market. A different tale is being told in large metropolitan cities
like San Francisco where inventory has hit a 20-year high and in New York City
where sales volume is down 46% on the year. It’s clear we are in the midst of an
urban exodus.
When demand is greater than supply, prices rise as well. The median price of
a single family home in Steamboat is up 10% from last year, now at $1.02M.
Condos/Townhomes are not rising at the same pace but are still up 6%, now at
$461K. The luxury market has been impacted the most by this demand surge.
There have already been 46 sales above $2M compared to 20 in each of the
previous two years. This is a similar story across the country as luxury sales are up
drastically nationwide.
While luxury buyers have clearly not been harmed by the pandemic, it’s a different
story for renters. Nationwide, experts predict that as much as 45% of renters are
at risk of being evicted in the coming months.
It’s hard to fathom sales can continue at such a torrid pace given the inventory
restraints. However, had we made the same statement three months ago we
would have been proven very wrong.