Property inventory in Summit County remains low, causing a fast-moving market with a sense of urgency in the start of 2017.
Real estate sales for January started the year off strong with 136 sales, 12 more than the same time in 2016. Sales value also saw a boost. Revenue from sales was over $86 million, compared to $63 million last year.
Sales for properties hitting the million-dollar mark more than doubled in January. In 2016, there were 11 sales in that range. This year, January had 25 sales for properties at $1 million or more.
“I’ve never seen it like this. Right now it’s tight. It’s challenging for buyers to find property that meets all their criteria in our market given the low inventory.”Dennis ClauerOwner and broker at Real Estate of the Summit Inc.
Dennis Clauer, owner and broker at Real Estate of the Summit Inc., said that this shows that the high-end market is trending up.
The month's highest sale was a 4,500-square-foot home in Breckenridge that sold for more than $4 million. Before the most recent home was built on the plot, the land was home to a small gray shack. Beverly Breakstone, the assessor for Summit County, said that the previous owner sold the property in 2010. The shack was then torn down to make room for the new home.
January is not typically a strong month for real estate in the county. The reason for higher sales can be hard to nail down, especially because brokers are still seeing low property inventory. Breakstone said that the nice weather Summit has been seeing could be a factor. Nice weather can make it easier for brokers to show properties.
Cody Thomas, a broker associate with Paffrath and Thomas Real Estate, said that since Summit is still in vacation mode in January, there's not typically a high volume in sales. But this year, he said there was a sense of urgency for buyers trying to find the right property. Some of this is created by the brokers hoping to get eager buyers into homes. Having a low inventory means that properties have not been staying on the market for long.
"Part of that urgency is created by brokers to try and get these people that really want to be in the market and help them to get in," Thomas said.
In previous markets, buyers could take their time, and be more picky about shopping for a future home. Unlike last year, Thomas said that he's seen multiple offers for one property. While people are not getting bid up over asking price, he said that offers get closer to it because buyers are afraid the next property they look at may be more expensive.
"It was not this way last year. This year, who knows what will come available, so you might want to move on something," Thomas said.
Many of the recent stream of buyers are trying to take advantage of the low interest rates. But Clauer thinks that the recent interest rate raise will start to have an impact on the market. Nationally, he said that for every increase of one-tenth of a percent, home sales decline by approximately 35,000 units. Average mortgage interest rates have risen from 3.5 to 4.2 percent.
"On a national basis … we're looking at maybe a slowing of sales by a quarter of a million units in an annual year because of that interest rate," Clauer said.
Currently, the market is enjoying the wealth effect from people who made money in the recent stock market increases. Clauer said that the effect helps to fuel buyers looking at resort properties.
As many as 40 percent of buyers, mostly on the higher-priced end of the market, pay for properties upfront. The interest hikes are not going to affect these buyers. But on the lower end of the market, where the county has some of the lowest property inventory, Clauer suspects that demand will go down.
In the meantime, inventory remains a barrier for buyers, particularly those looking in the lower end of the market where there only a handful of properties available.
"I've never seen it like this," Clauer said. "Right now it's tight. It's challenging for buyers to find property that meets all their criteria in our market given the low inventory."