First Quarter Prices Make new Record… a big one!

After a dismal performance in February, March brought a strong rebound with an above average number of sales and a record high average price for the 1st Quarter.  Avg.Qtr Price
Through March, 382 properties had closed, still a long way from the 543 which sold to date in 2006, but the highest number since 2008.
The average sale price for all properties sold through the Summit Association of Realtors MLS blasted through last year’s 1st Quarter record and ended at $672,900.
The 1st Quarter average sale price jumped by over 18 percent from the 1st Quarter of 2016, the largest increase since the 2007 to 2008 increase of about 17 percent.
It is likely that prices will not finish the year at this level, but they will probably be close.   And a little slower increase would be a good thing.  Overheated prices are not healthy as we have seen in the past.
As we all remember, things went south for four years after the euphoria of 2008 but prices have finally and fully recovered.
It would seem that the laws of supply and demand have finally caught up with our market.   For the past three years, the inventory has steadily declined to its present historically low number of properties for sale.  Despite this lack of supply, prices had risen at a relatively sedate five to eight percent per year until now.
Rising interest rates will have an effect on this market, but mostly in the lower end where buyers are more likely to need a mortgage.  Undoubtedly some have been priced out by the recent increased borrowing cost.  In addition the lack of supply and resulting price inflation is still centered squarely on the most affordable part of the market.
Buyers who want in before the market gets farther away from them need to act as soon as a new property appears on the market.  This means picking a broker and getting on number sold 1st Qtran automatic search and notification program to even have a chance to see new listings before they go under contract.  Zillow won’t cut it any more.  Too slow.
A pre-qualification letter is crucial as your competition will probably present one with their offer.  Only the most committed, prepared and active buyers are having success these days.
You would think that these conditions would bring more for sale by owner and pocket listing sales, but the number of properties offered on for sale by owner web sites and that mysteriously appear in the MLS as sold before listed has not risen much.  Almost all transactions in Summit County still involve a Realtor.
Secret sales are not in anyone’s best interest.  You never know if the home was sold to a relative, if the owner financed it, there are no pictures in the MLS, you don’t know what the offering price or maybe even the real sale price was.  Full disclosure makes for honest markets.
Smart sellers know that more buyers exposed to the property means a better chance of multiple offers and the best possible sale price.
And smart sellers are getting their properties on the market as soon a possible while these conditions last.
These days, you really never know what’s going to happen next.  Now more than ever the next Depression may be only a snarky tweet away.

Rumor, Gossip & Innuendo

radar-dishesCancel the emergency… that big pile of dirt and all the earthmovers parked in front of Lookout Ridge isn’t the start of big box construction… yet.  The Town says it’s just being levelled .  But can a big box store be far away?

If you’re thinking about trying Sauce on the Blue… better make reservations. After 10 years of vacancy in the Silverthorne Town Center, the space is finally a restaurant and a great one at that.  When the Performing Arts Center opens right next door, you won’t be able to get in the place.

Science comes to the rescue again… Aspen and Evergreen may require DNA samples from dogs so owners who leave dog poop behind can be tracked and fined… seriously.  Wouldn’t it be cheaper to just offer a bounty for cellphone video of dog owners scuttling away from their mess.  There could be a Youtube channel just for this: “Shame on you for residue”

Once again, it stopped snowing in March… after huge storms from December to February, March looked more like June.  Kite skiing stopped early as the lake got slushy. That’s OK… with job killing CO2 regulations gone, we’ll all be too busy at our new high paying oil and coal patch jobs to ski anyway.

Guess the Colorado moose re-introduction program has been a success… They’re hangin’ around the Safeway in Frisco, racing skiers down the runs at Breck, standing on my front porch and generally trending and going viral on the web all winter long.  Every moose gets 15 minutes of fame these days. 

The Safest Bet in Real Estate… rent will continue to go up

The stock market is teetering at spectacularly high levels.  Investment professionals insist there’s gonna be a new health care system,  a huge tax cut and huge public spending on roads and stuff.   Stocks dip or soar on every new tweet.
Meanwhile, inflation is rising, the Fed is raising rates, and home owners are hoarding real estate such that there’s nothing for sale.
What does that all mean?
It means that there will be even more renters than owners in the future.  Owner:rental table
Why did hedge funds and REITs grab massive amounts of property that got foreclosed in the Bush Depression?  And why are they holding on to it instead of liquidating and putting their huge gains on the sure bet that stocks will hit 30,000 this year?
Because they’re not stupid.  The worse the economy is for average people, the more renters there are.  And, if we leave aside that we are establishing a permanent underclass of tenants, why would this be a good thing?
Well, other investments go up and down, but rent almost never goes down. 
In Summit County, as in most resort areas, it’s an even better bet for landlords.  People might stop buying second homes, but they still take vacations.  So we still need workers and workers need housing.  And we certainly won’t pay workers enough to buy any, so what will they do?
RENT, of course!
So what can you learn from the hedge fund geniuses who brought you credit default swaps and other wonky stuff that caused the melt down of 2009?  Buy real estate and rent it out.  Let the suckers play the Wall Street slot machine.  You rent to the workers running the place.
But what about those benighted workers?  
Well, the Federal Reserve says that you guys will be worth about 40 times less than your landlord unless you make the leap into ownership.  Right now you have a median net worth of $5000 versus the $200,000 the guy you just rented skis to probably has.
Yeah, I know, you don’t want to be tied down to property, or own a car, etc.  And in the past that was OK until it dawned that eating dog food in your old age wasn’t appealing.
You used to be able to make up time and finish well.  
That ship has sailed.  Renters need to start earlier and work harder to catch the elevator these days, especially in resort areas.  But it can be done.  
I did it – you can, too.

Mis-informed at the Speed of Light or Looking at the world through a keyhole

zillow trulia RealtorHere’s a common web lead for real estate: I get an email from a lady who says

“Hello!
We are interested in 123 Whatever Lane.  Is this property still available?  Thanks!
Susie Sunshine
Sent from my iPhone”
She’s crushed to hear that this property has been under contract for months and will close next week.  I ask where she found this hot listing so I can clean it up and she says it’s on “several web sites.”  No doubt.  Once a property hits the web, it gets bounced and reposted through the whole web universe beyond anyone’s control.
I use e-marketing, a lot of you will read this online at my web site, so I’m not a troglodyte.  But Internet shopping for real estate still has real limitations.
The foremost problem is accuracy and lag in updating changes in price or status.  A quick sample comparing actual listings from the Summit Association of Realtors Multiple Listing Service and Zillow shows several Zillow entries that have sold, been withdrawn, are re-listed with another broker at another price or are active and not shown on Zillow at all.
It’s not just Zillow.  CraigsList is the most egregious offender.  I object to having my listings mixed in with escort services and offers for murder for hire, but worse than that, I’ve had inquiries for properties that sold years ago but were still shown as available and for a spectacularly low 5 year old price.
And what about online appraisals?  If the Zillow database isn’t accurate, particularly with regard to whether a property has actually sold or not, a Zestimate is pretty suspect.
But even a formal appraisal by a certified appraiser is a picture of value in the past few months, not the next few.
A Realtor’s price opinion will take intangibles like market momentum and competing inventory into account to give you an idea of what your property will actually sell for in the near future.
And the only way to have accurate information about properties currently for sale is from a Realtor who has actual listing details and who has experience in the local market.
While the majority of folks now begin the search for real estate on the web, the same buyer beware advice applies for this, just as it does for any other on-line commerce.
By all means have a look at reputable sites like Realtor.com to get a broad picture of the market, but for the real scoop call a Realtor.  Like me.

The Very Rich ARE Different… they have no lift lines

 

cim-heli-1

All this can be yours for just a few $million. The whole mountain for just you and a few friends.

Looking for first tracks all week?  Want to ski down to a secluded home in spectacular back country with a few dozen neighbors spread over a few thousand acres?
You can, but bring your check book.  For $2 to $3 million per building site and up to $20 million for a home, there are a small number of these highly exclusive private mountain clubs in the West.
Cimarron Mountain Club near Gunnison, the Yellowstone Club near Big Sky Montana, the Hermitage in Vermont, Shadow Mountain Ranch in Grand County and more in the West, Canada and back East offer a luxurious private world for well-heeled members.
You can buy into clubs that have ski lifts, snow cats, lodges with restaurants, yurts, warming huts with food and drink on the runs.  
Some have designer golf courses, some offer heli-skiing, guided fishing, stocked lakes, rafting, and working cattle operations with drives that owners can participate in.
And you thought Aspen, Telluride and Beaver Creek were the top of the line.
Before the turn of the 20th century, wealthy Europeans bought huge swaths of the West for cattle ranches and hunting lodges.
The selling of the West is happening again.

The Final Word

OLYMPUS DIGITAL CAMERABuyers are lined up to buy, although the line is getting shorter. Sellers are clinging to their properties. The inventory is squeaky tight.  
And prices are topping out again.  
That will drive some owners to sell at the peak instead of waiting until it’s past.
And then I’ll be hearing from unhappy folks who missed the wave… again.  
If you are waiting to sell, don’t be that guy.
I’ve been here, seen this, got the t-shirt.
Call me now.

Chuck Leathers, CRS
owner/broker

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