Sunday, September 30, 2007
Steamboat Springs One quarter remains in the 2007 business year, and the Steamboat Springs real estate market has already surpassed last year's record $1.12 billion in transactions. The new record was accomplished with only 54 percent of the unit volume, or transactions, needed to set the old standard.
Bruce Carta of Land Title Guarantee Co. compiled statistics from Routt County records and reported that as of Aug. 31, the county has already seen $1.156 billion in transactions this year.
Every month of 2007, save February, has seen transactions rise above $100 million. If sales in the final four months of the year were to match the corresponding quarter in 2006, the 2007 total would exceed $1.5 billion.
Pam Vanatta of Prudential Steamboat Realty expects the trend to continue through the end of the year and beyond.
"We feel the last quarter of 2007 will remain strong in comparison to the last quarter of 2006," Vanatta said.
David Baldinger Jr. of Steamboat Village Brokers said historically low inventory is fueling the rise in prices here.
"When there are more buyers than sellers, prices go up in big increments," Baldinger Jr. said. "You get an unprecedented price every time. In my opinion, this trend will probably continue in terms of dollar volume. But the number of transactions will continue to go down (for two or three years), especially in terms of mountain condominiums."
Steamboat's new record dollar volume was achieved with 1,869 transactions, compared to the 12-month total of 3,477 needed in 2006 to reach $1.12 billion.
Big sales near Ski Area
The statistics compiled by Carta show that the "mountain area" at the base of Steamboat Ski Area has contributed 46 percent of the dollar volume in the market year-to-date. However, it's worth remembering that the $534.5 million generated by the mountain area in the first eight months includes some very large transactions, which are very different than smaller purchases, such as one family purchasing a vacation condominium. Interpreting the significance of Starwood's purchase of the Sheraton Steamboat for $57 million, or Cafritz Investment's purchase of Thunderhead Lodge and Ski Time Square for $53.9 million, for example, is tricky. And pieces of institutional deals sometimes aren't recorded for months or even years.
Of the $1.15 billion in transactions, residential units account for $685.57 million.
Low price, fast sale
The current statistics show 148 sales of homes priced at $1 million or more this year. Yet, across Routt County, homes priced between $200,000 and $500,000 account for much of the unit volume. Home sales priced between $200,000 and $300,000 total 208 through August, and anot-her 299 priced between $300,000 and $500,000 have sold. They represent 25 percent of the residential market this year.
"Average sales prices are higher, and as a consequence, properties under $500,000 are selling quickly," Vicky Hanna of Prudential Steam-boat Realty said.
Forty-three homes priced in the $300,000 to $500,000 range sold in August alone, for an aggregate value of $17.7 million.
Baldinger Jr. said the Steamboat market has been relatively immune to the turmoil in the national home lending markets.
"The sub-prime (mortgage) crisis doesn't have much effect on us," he said. "There have been very few transactions that haven't closed because of a financing issue."
Baldinger Jr. said even at the lower end of the Steam-boat market, people buying $400,000 and $500,000 homes are either comfortably purchasing a second home or are local homeowners using equity in their homes to trade up.
Banking on the 'Boat
Baldinger Jr. is confident he perception of Steamboat as an attractive place to invest is influenced by all of the activity here, from Intrawest's purchase of the ski area in March and subsequent capital improvements, to major developments announced at the mountain and the number of construction cranes changing downtown's modest skyline.
As accountants advise baby boomers to use their inheritances to diversify in real estate, Steamboat, with its track record of growth in prices over the long term, looks like a good bet compared to depressed markets in other parts of the country, he said. They even get the bonus of a desirable vacation destination along with an investment that outperforms the stock market.
Although August totaled $152.6 million in transactions, it felt moderate compared to the $176 million in July, Hanna said, and that's not all bad.
"Nothing indicates a market that is not healthy and ongoing," Hanna said. "If there is a slight measure of reserve in the market, it is good news to see a moderating market."