15 Month Market Frenzy Coming to an End

After 15 months of real estate market frenzy, we may finally be entering a slightcool down phase. Or perhaps it’s better worded to say that we may be coming to the end of the frenzy but the market is still very hot. Through August, total sales volume in Routt County is up 88% from this time last year.

Pandemic Created Atypical Environment

The end of the summer is typically when activity seasonally slows but the pandemic has created an atypical environment where the normal predictable seasonality isn’t so predictable. The number of active listings across Routt County has stayed the same for the last three months at around 150 (not including fractionals); normally, inventory drops each month throughout the summer. There was still a big increase in closings in August (108 compared to 65 in July) but with inventory holding steady, it means buyers who had experienced nearly two years of dwindling inventory now have a few more choices.

Residential Properties Appreciate at an Unheard-of Rate

Routt County residential properties have appreciated 44% from this time last year, an unheard-of run-up. Historically low mortgage rates are still below 3% and buyers are taking advantage of this purchasing power. Many leading economists believe that home prices will continue to appreciate but at a more sustainable rate over the next year, with estimates around 3-5%. However, those same economists are predicting a rise in interest rates which would likely tamper buyer demand.

Prices of Building Materials Continue to Rise

For those contemplating building a home from the ground-up or putting an addition on their home, prices of many building materials continue to increase, up by about 19% year-over-year. The costliest building materials are steel, asphalt, PVC piping, and copper piping and tubing. Steel mill products are up a whopping 81% year-over-year. On the bright side, lumber prices have fallen after a meteoric rise this summer, now back to historic norms.

New Projects Bring New Hope

In spite of these challenges, there are several exciting projects underway that may help with inventory. The former Steamboat Pilot & Today building on Curve Plaza has a project called “Basecamp” that is proposing 75 residential units, including studio, one-bedroom and three-bedroom units. Also, the Yampa Valley Housing Authority is putting together its steering committee to start planning the development of locals housing on the recently purchased 536-acre Brown Ranch, formerly called Steamboat 700.

It can certainly be challenging to navigate this ever-changing market; please contact us so that we can off er our expertise to help you meet your goals.