Summit County summer real estate trends could favor buyers, but agents say local workers will likely remain overpriced

This five-bedroom, four-bathroom home at 457 Fuller Placer Road in Breckenridge is listed for $1,995,000. Leah Canfield, real estate agent for Coldwell Banker Properties, said there was only one single-family home available in Summit County under $1 million. While this summer has brought a more buyer-focused market, the majority of home prices are still well outside the budgets of primary homebuyers.
Colorado Real Estate Company/Courtesy Photo

Real estate transaction percentages declined from 2021 to 2022, creating a buyer’s market for the first time since 2019.

However, this does not mean that it is a better market for local labour.

Two Summit County real estate brokers provided context, explaining that a combination of increased interest rates, short-term rental regulations and a stifling of development could be contributing to this decrease in total purchase volume. .

Purchase volume is the total dollar amount of real estate transactions for a calendar year.

From 2020 to 2021, the purchase volume of real estate transactions in Summit County has exploded. April, May and June brought increases of around 242%, 304% and 176% respectively.

Flickinger attributed the high percentages to strong demand for Summit County properties and an extended period of low interest rates.

One theory he had about high demand was a population boom on the Front Range.

According to the US Census Bureau, the population of the city of Denver as of April 1, 2010 was 600,158. As of April 1, 2020, the population has grown to 715,522.

Historically, Flickinger said Summit County’s real estate market was 40% Front Range buyers. With this growing population, the demand has skyrocketed.

Another reason the percentages were so high was “historically” low interest rates.

“It increases everyone’s purchasing power,” Flickinger said. “It doubled – even tripled – some people’s purchasing power because interest rates were so low, and that was unsustainable.”

Now interest rates have gone up. While they were 3% a few years ago, the rates are now 5% for main residences and 6% for secondary residences.

Comparing the spring and summer months of 2021 – when the percentages exploded – with the same months of 2022, the purchase volume of real estate transactions in Summit County either barely increased or decreased significantly. .

April was only up 2%, May was down 12% and June was down 37%.

Leah Canfield, real estate agent with Coldwell Banker Mountain Properties, said one consequence of high interest rates is fewer second home purchases because many second home owners in Summit County cannot afford their homes without short-term renting, she added.

In May, the Summit Board of County Commissioners voted to begin a nine-month moratorium on short-term rental licenses.

Additionally, the City of Breckenridge voted in late August to approve a set of short-term rental bylaws that created specific short-term rental zones and set limits on licensing.

Canfield reported seeing many interested buyers turn away from Summit County once the possibility of a short-term rental license seemed out of the question.

So what are the effects of these changes on the market?

Canfield said this summer active sales were up from last summer, while pending sales were nearly halved.

“So that means people are listing their properties and they’re sitting in the market,” Canfield said.

She and FIickinger said this trend could continue, creating a more buyer-friendly market.

“Really, what he’s done has created a healthier real estate environment where buyers and sellers are now evenly matched,” Flickinger said.

Instead of rushing and competing with spot buyers, Flickinger said top buyers have more time to adjust contracts as they see fit.

Even so, the price issue remains, which will lead to more empty homes according to Canfield.

“Unfortunately, that doesn’t necessarily translate to more opportunities for locals,” Canfield said.

Even though there are more homes on the market, there is only one single family home that is listed for less than $1 million.

Therefore, while interest rates have risen and regulations on short-term rentals have slowed home buying, the available housing stock does not provide more options for the local workforce. who could use something more affordable.

“Because when a house costs an average of $2 million and the owner has to rent it out for, you know, 10, 15, 20 thousand dollars a month to cover his expenses and his mortgage, then that’s not affordable. for a local anyway,” Canfield said.

So while Summit County’s real estate market has become more buyer-friendly, Canfield said if a buyer is on a budget, finding a home in the county will be — at the very least — difficult.

About Sharon Joseph

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