Summit County Softening Market – Anecdotes from the Trenches
Real estate trends are not always obvious. Those of us who work in the field each day notice the anecdotal evidence of trends long before they show up on a larger scale statistical analysis. Having worked in Summit County for almost 20 years, there are some canaries in the coal mine, where those who are watching can see market changes happen first.
BUFFALO RIDGE UNITS – DOWN 5.3%
Take Buffalo Ridge Village units in Wildernest for example. These are condo units in the same complex with the same configuration and same square footage. Views and finishes can be different, but for comparison purposes, note that in June and August of 2022, two units sold for $659,000 and $661,000. Days on the market were 1 and 29 for these two units. (I sold the one with 29 days on the market and that was after the BOCC moratorium, hence the longer days on market).
Right now we have four on the market listed at $620,000, $620,000, $625,000 and $639,000. Days on market range from 45-194 days.
A decrease from $660,000 to $625,000 is a 5.3% drop. However, with four on the market, long days on market, and no future potential for a STR license for any of these units, we can predict that the pricing will continue to drop.
DILLON VALLEY UNITS – DOWN 14%
For a second example, let’s look at Dillon Valley three bedroom units. Prior to the moratorium, and within the last year, three units sold for $605,000, $635,000, and $687,500. After the moratorium, four units sold for $530,000, $545,000, $545,000 and $590,000.
Days on market prior to the moratorium were 0-4 days. After the moratorium, they were 53-127 days. Taking the median number, the differential between $635,000 and $545,000 a few months later is a 14% drop.
In fact, I had clients who made an offer on one of the $545,000 units. At the time it was listed for $595,000 and they offered $565,000. The Seller said there was no way she was going to settle for anything less than $585,000. Looks like she lost $20,000 by not taking our offer prior to the moratorium and received $40,000 less than her “lowest number.”
TIMBER RIDGE UNITS – DOWN 12.1%
Let’s look at Timber Ridge two bedrooms. In August 2022 a unit sold for $635,000. In November 2022, a unit sold for $607,500. Right now there are two units under contract that went under contract at the end of January and beginning of February 2023. List price on those units are $535,000 and $550,000. To calculate the decrease in pricing, I used $615,000 from the previous sales and $540,000 for the under contract sales showing a decrease of value of 12.1%.
SNOWSCAPE CONDO UNITS – DIFFERENTIAL 24%
In probably the most dramatic example, Snowscape condos have seen two 2/2 sales in the last year. The first sale was in July 2022 for $675,000. Recently, in January 2023, another 2/2 unit sold for $510,000. That is a price difference of 24%. With less comparables, it’s hard to say that prices are really down 24%, but you can’t dispute the difference in the two sales!
What does all of this mean?
With a simple supply and demand analysis, we are seeing more supply of units that cannot be short term rented, creating downward pricing pressure. In the example of the Timber Ridge units, two sellers dropped their prices by ~10-15%, setting new comparables. The two units on the market will now have to contend with the lower sales comps. During the recession of 2008-2009, I called this “catching a dropping knife.”
At what price do you have to list in order to sell within a reasonable time frame, especially with competition? Only time will tell whether this will be an ongoing trend or whether it will stabilize when interest rates creep back down. What we do know is that we are NOT seeing this trend in the markets where STR licenses are available. Those markets are maintaining their pricing.
