December Market Snapshot

Top 3 Takeaways Looking at November in the Steamboat Springs Real Estate Market

1. Sales Continue to be Strong

In August, September, and October & November we saw the months four highest monthly sales volume's in the past 5 years.

Looking at the graph below, there appears to be a slowdown in November sales vs the fast pace of September and October. It is important to remember these 4 things when looking at the graph below.

1. Sales volume for November is up 34% vs November 2019.

2. July sales volume was up 68% in July at $83M. November sales volume was up 34% at $91M. No individual month in the previous 5 years was above $75M. Sales are still incredibly strong and historically high.

3. There is a lack of inventory (discussed in more detail below). There are many individuals out there who are actively looking, making offers on homes, but not going under contract because of situations where multiple  offers occur.  

4. Sales volume for the entire year to date (to the end of November) is up 46%

2. Price Points are Shifting Upward

Looking at the stats above, one item to note in 2019 was 1 sale that had a dramatic impact on the average sales price. In 2019, there was a sale of a home for $11.5M. With this sale included in the average sales price year over year (as reflected in the stats above) this brought the average sales price down 4% for November 2020 vs November 2019.  

However, if this sale is removed from the sales as an outlier for this time period, the average sales price is up for 2020 by 12%. This is a more representative picture of what is occurring in Steamboat-  real estate appreciation.

If you are currently looking at property in Steamboat or considering selling your current place, you are seeing first hand that values are increasing - in some cases fairly significantly.

There are two factors in play. First, we are seeing the values of each property increase (8-15% vs a year ago). Second, the larger impact is that a higher percentage of the properties selling are high-end luxury properties. This is raising the average price more than the appreciation of an individual property.


3. Low Inventory Continues

Currently, homes that are priced with reasonable progress from the last sale are getting good interest and are selling relatively quickly.  There simply is not enough inventory to meet demand in certain segments.

So, if you are looking for a home it pays to do your research, understand the market, and be ready to make a decision quickly. If a particular home isn't right for you, that's okay, but decide quickly or someone else may make the decision for you. We are also seeing an increase in multiple offers, particularly for segments of the market where inventory is low. It's easy to miss out on the right home for you in this situation, so we have strategies to significantly increase your odds. It's not just a higher offer that wins.

While it may feel crazy in some regards, it is similar to what is common in many markets. It is based on real demand in a market with limited supply.

How does this look for the future based on current trends? @Jon you wrote these for last months, but they still all play well.  Is it worth leaving them and mentioning?

- More people can work from home for long enough periods that it makes sense to get a place in Steamboat and be here now.

- More people can move here full-time now that their jobs are remote. They feel comfortable doing so with our great community, excellent schools, and they have fewer reasons to be where they lived before.

- Even when the virus will slow down, more people and companies will continue to be comfortable with remote work. 30% of our local workforce was location neutral before the pandemic, so we don’t see this as a temporary effect.

- Interest rates are low and are likely to be for 2-3 years.

- Fiber internet lines have been laid by Luminate Broadband, which is owned by our local electric company, up to Steamboat Lake, all around Steamboat, and are coming to Hayden and Stagecoach. We hear that more will light up in 2021. Space X’s Starlink internet service is delivering 120/50 internet during their initial Beta phase. This is a new low orbit satellite service with plans to eventually cover the whole US. This will make the town of Steamboat more attractive, and will also be a big plus for our rural areas that are already seeing increased demand.

- What could cause prices to stabilize or go down? One thing would be more inventory, however it would take a lot more inventory. We never know when there will be a recession or an event that causes the economy to take a turn. As such, it is best to look at owning in Steamboat as a long term option and be comfortable owning it during a downturn. As we know there will be recessions over time, so it's important to have reserves to weather it out.

- That said, it comforts us to know property owners in Steamboat, as a whole, have a lot of equity. The combination of property appreciation, a common trend of mainly cash buyers (in the range of 50%), and most loans having pretty stringent underwriting (unlike in 2007) helps our market be more resilient in challenging times. In the end, we recommend you learn the market, consider how you feel about the economy, and think about how long you plan to own.

If you would like to know more about our market, what we see as the key trends, and how those could impact the value of a property you own or aspire to own, feel free to reach out for a low key conversation. We will listen to your questions and goals then share our experience and thoughts.

Click the button below to Email Jon Wade at Jon@TheSteamboatGroup.com or text to 970-819-6930.
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