#Breckenridge, Colorado.
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| Michael Yearout Photography |
It’s summer, and that means the local real estate market is sweltering hot.
That’s not always the case — only three years ago, Summit investors were still gun shy from the 2008 Recession — but, the past two summers have brought booming business to commercial and residential brokers, leading to a whopping $114.5 million in total transaction during May 2015. That’s nearly $20 million more than last May, which itself saw $95.1 million in sales.
One thing’s for certain: Early summer is when everyone — from prospective homeowners to established business owners — starts signing papers for the properties they eyed all winter. A total of 204 properties moved this May — that’s 25 more than in 2014 — ranging from four $375,000 units at Lake Forest Condominiums in Frisco to two homes over $2.5 million in the Highlands at Breck-Highlands Park neighborhood.
Compare those lofty sales totals to the figures from February 2015, when sales barely reached $50 million, and only four transactions hit the $1 million mark.
Just three months later, 15 properties went for more than $1 million, including the big daddy of them all: the final undeveloped plot at the posh Shock Hill neighborhood in Breckenridge. It sold for $10.25 million in early May to a small group of local developers, and, before the papers were even signed, they had tabbed Double Diamond Property and Construction of Frisco as the developer.
“No one was interested in a major project, but, when people were willing to pull out checkbooks and write a seven-figure check on the spot, that’s a sign the economy is picking up.”Ned WalleyManaging broker, Cornerstone Real Estate
Managing broker Ned Walley, of Cornerstone Real Estate, says the Shock Hill sale was highly competitive — a major change of pace from when he first took on the property in 2013.
“When I first got the listing, I just sat and stared at a phone for a few months,” said Walley, who notes the 6.67-acre plot was originally slated for a resort-style condo complex that never came to be. “It never rang. But then, when things started getting better, when the economy turned, I started getting more interest. No one was interested in a major project, but, when people were willing to pull out checkbooks and write a seven-figure check on the spot, that’s a sign the economy is picking up. Interest picked up.”
All told, the 15 high-dollar sales in May 2015 accounted for nearly $33.7 million of the $114.5 million total, or roughly 30 percent of all sales. But here’s a fascinating tidbit: In terms of sheer volume, last May actually outperformed this May in the $1 million-plus arena, with 20 transactions totaling $30.86 million (about 32 percent of the total). Yet, 2015 saw seven sales over $2 million, including the Shock Hill plot. That sale skews the comparison a touch, but more sales at a higher price point speak to Walley’s point: Investors and homeowners alike are now more willing to seven-figure checks.
“When it seemed like the dust settled and other suitors didn’t pursue, we took another stab at it,” said Chris Canfield, spokesman for the Shock Hill owner, ROCA Holdings. “We’ve had a plan from the start to build homes that fit into the Shock Hill aesthetic. It’s the most coveted area in Breckenridge, and we are looking at a unique and special product.”
THE DARK SIDE OF SUMMER
As any developer knows, unique and special in a red-hot market is key, particularly as inventory continues to shrink across Summit. Breckenridge is now at 90 percent build out, while Frisco has even less room for properties larger than 1 acre.
The looming property crunch shows the “dark side” of a sizzling real estate market. At some point, as property values climb to peak levels, inventory will reach all-time lows and developers will be forced to continue expanding. This tug-of-war between development and conservation has already sparked heated debates in two local towns, Blue River to the south and Silverthorne to the north, where the combination of a rejuvenated economy and fervent interest from second-home owners led developers in both towns to triple density levels. Yet, none of the units on either parcel is considered affordable, at least as defined by the state and county: Ruby Placer in Blue River calls for units around $500,000 and up, while South Maryland Creek Ranch in Silverthorne calls for units in the $550,000 to $625,000 range.
And, only time will tell what happens to Summit’s southern and northern limits. Maryland Creek was approved by the Silverthorne Town Council in late May, and Ruby Placer is scheduled for a public vote on Sept. 15.
Courtesy of the Summit Daily News.
