#Summit County, Colorado.
The Summit County real estate market doesn't quite abide by mud season rules.
Then again, neither did Mother Nature this year. It started feeling like late April in early February, with lengthy stretches of warm, almost balmy weather and only a few briefs spurts of snow in between. The annual lull between ski season and Memorial Day will be muddy, for sure, but it might not feel as dull and dreary as usual.
Yet even in a typical year, mud season isn’t completely dead. Local real estate brokers consider March and April the unofficial start of buying season. When paired with a strong housing market across the nation, late spring and summer are shaping up to be banner seasons.
March was impressive to say the least, with 150 transactions adding up to more than $83 million in total sales. That’s $23 million higher than March 2014 — itself a banner month in a recuperating year — led by 18 individual sales of at least $1 million spread between Breckenridge, Silverthorne, Frisco and Keystone.
Let’s start with the elephant in the room: Blue River Apartments. The affordable housing complex in north Silverthorne sold for $9.25 million to a Denver-based firm, Tralee Capital Partners. Firm owner Michael Kelly has already kick-started renovations at the 20-year-old complex, beginning with LED lighting and indoor plumbing upgrades to help residents save on utilities. Oddly enough, it sold for $4.6 million higher than its assessed value in 2013 (more on assessments to come).
March also marks the first time this year when big, bad Breckenridge didn’t have a monopoly on multimillion-dollar sales. Apart from the Silverthorne transaction — the largest multi-family complex to change hands so far this year — two of the four largest sales in March were nowhere near Shock Hill or Highlands.
Coming in at No. 5 on the March transaction list is a $1.6 million home in Frisco’s Royal Mountain Ranch neighborhood. Like Breckenridge, the town is nearly built out — expect higher real estate prices as the inventory continues to diminish.
Frisco is still a hot market, but even the low-performing Keystone showed signs of life when a single-family home in the Alders subdivision went for $1.85 million.
And it’s a harbinger of what’s to come: On April 8, brokers closed on a $3.5 million single-family home in the Dercum Dash development, which bodes well for the thick of buying season this summer.
PRIMER ON ASSESSED VALUE
Mud season also brings the start of construction season in the High Country and local towns are already taking advantage of the weird weather: median beautification along Highway 9 in Breckenridge, the Step Up Main Street project in the heart of Frisco.
But where do those funds come from? Property taxes, nearly 70 percent of which are paid by residential homeowners. And where do those homeowners come from? About 67 percent live outside of the county, which informs the entire appraisal process in a resort town. (In contrast, homeowners account for 30 percent of property taxes in the Denver metro area.)
On May 1, the assessor’s office will mail reappraisal statements to all property owners in the county. The office tackles property appraisals every two years, so the latest round is based on data collected between July 2012 and June 2014.
Like the housing market itself, property values are on the rise. Each of the six real property categories — residential, commercial, industrial, agricultural, vacant land and natural resources — saw increases since the last two-year reappraisal in 2013.
Residential properties in the Breckenridge and Frisco areas saw the largest value increase, jumping roughly 13.5 percent each since 2014. The Keystone area went up the least by 5.5 percent.
Breck again leads the pack in terms of market share: Thanks to an average value of $1.387 million for single-family properties — the rest of the county sits at $412,000 — the town accounts for 48 percent of Summit real estate values. And with higher property values come higher property taxes, which in turn lead to deeper municipal budgets.
“It’s a double-edged sword,” Summit County assessor Beverly Breakstone says. “It’s great for the county, it’s great other districts, it’s great for everyone who collects taxes, but it also may mean higher taxes for the taxpayers.”
Commercial properties also saw a value increase of 13.4 percent since 2014. Yet due to a funky piece of Colorado law known as the Gallagher Amendment, commercial owners pay steeper taxes than private homeowners — much steeper.
Here’s how it breaks down: In Breckenridge, the average value of a condo is roughly $400,000 (compared to $320,000 for the rest of the county). When calculating property taxes, Breakstone’s office takes the actual value ($400,000), multiplies it by the residential assessment ratio under Gallagher (7.96 percent), then multiplies the total by the mill levy for the tax area. A condo with a mill levy of 60.2 (the county average) is taxed at about $1,900.
All other properties are assessed the same way, except the assessment ratio is a static 29 percent. A $400,000 coffee shop or retail store with the average mill levy is liable for nearly $7,000 in property taxes.
“We now have this schism so that residential property owners pay about three times less than everyone else,” Breakstone says. “When we have assessed values going up, it hits your commercial property owners the hardest.”
Courtesy of the Summit Daily News.
