As more and more people continue to move to Colorado, local real estate brokers in Summit County expect many of the trends from 2016 to continue into the new year, meaning continued high demand for properties and a low inventory to sell from.
Dennis Clauer, broker and owner of Real Estate of the Summit, Inc., said that he thinks the market may not be quite as dire as it was last year.
“I think the inventory will be low, but I think that we’ll start to see more inventory coming on the market,” he said.
Currently, there are 319 residential listings on the market in Summit. Jack Wolfe, an associate broker with Liv Sotheby, said this is a 29 percent decrease from last year.
Fewer listings means fewer options for people to chose from. The demand for single-family homes is still up, so those properties spend less time on the market. Right now, the time is ripe for selling a middle-market home.
The change in interest rate may impact buyers seeking homes in that market that plan on taking out loans. In mid-December, the Federal Reserve bumped the interest rate by .25 percent, pushing the interest range from .5 to .75 percent. However, neither Wolfe or Clauer thought that the recent increase in interest rates will have a strong impact on buyers in Summit County. Clauer estimated that as much as 40 percent of the purchasers here use cash, and are not using loans to purchase a home. He also predicts that there will be more increases from the Federal Reserve as the year goes on.
“They won’t be substantial, but there will be increases,” Clauer said. “I think that those may balance out a little bit. You may find a few less buyers, but you might find a few more sellers.”
Wolfe said that the high rate of cash buyers is in part because of the demographic of people looking at property here. Nearly two-thirds of the properties in Breckenridge are second homes, people coming into Summit County using disposable income to purchase a real estate investment. He also added that the increase did not bring rates up by much, and that rates have been relatively low for how strong the economy is.
“People have taken it for granted,” Wolfe said.
Wolfe is also a broker for commercial properties with Liv Sotheby. The turnover for commercial real estate is not as frequent as residential. But there are certain similarities between the two. Prospective business owners are facing a lot of competition for properties in Denver. Wolfe said that buyers have been coming from the Front Range in the hopes of less people to bid against.
Although demand for homes in the middle market remains strong, Clauer said that luxury homes, properties priced over $2 million, have not bounced back in the growing economy. These homes tend to spend more time on the market. He added that while different towns have varying levels of what is considered to be in the luxury market, those homes have not been doing well in resort areas.
“That market remains slow,” he said. “The luxury market in resort areas in Colorado have been slow to come back as the economy’s continued to expand and grow.”
On the other side of the market is the workforce in Summit County, and while developments for more affordable options have started, construction takes time.
Wolfe said that developments can take a minimum of three years from the planning and development phase to the final process of a person moving in. He added that while many of the towns in Summit have done a good job obtaining land to build housing projects on, there are only so many places to go.
“We don’t have more land that we can keep annexing in,” he said. “The housing crisis will be with us for a while.”