Prices Have Rarely Been Higher in Summit County
Only 2007, 2008, 2009 averaged above right now
The ski season was a little above average for snow and conditions were good or excellent from Thanksgiving through March. The winter visitor count will probably be a new record. So 2015 is off to a good beginning.
More properties have sold in every month so far this year than last year, extending a streak that began last May. At this pace, this year the number sold could reach the 25 year average of about 2200 sales. This would be the first time since 2007 that there have been an average number of sales. This will also be the first time that there have been 300 or more sales in the 1st Quarter since 2008.
The average sale price in the 1st quarter was $517,100, about 2% lower than last year to date. The slight decline is due to several expensive new condominiums at Breckenridge selling a year ago making March 2014 prices higher than any other month last year.
Even so, average prices this March were the third highest in Summit County history.
Some neighborhoods are closer to the peak prices of 2008 than others. Some never fell very much and have stayed close to the peak for all these years. Others still have a ways to go but are rising rapidly. Willowbrook prices, for example, are higher than all but 2007 and 2008 and are above $400,000 for only the 4th year in history.
On the other hand, Dillon Valley East prices are still only two-thirds of the way back to the peak of $179,500 in 2008.
The severe shortage of properties for sale in Summit County continues into the 2nd Quarter. There have been fewer than 1200 properties for sale since late November. Having sold nearly 1900 properties last year, there has been about a 7 month supply. About 350 of those properties for sale are vacant lots, however, making the stock of improved properties even tighter.
In the first part of the 2nd Quarter, properly priced properties are lasting only days on the market and new listings are barely keeping up with sales. There are many potential sellers who are waiting for another property to come on the market so they can move. This has increased the number of contracts contingent on selling the old property. Everyone is more or less frozen in place waiting for inventory to increase.
Most owners who would like to sell after the typical 7 years of ownership are waiting for prices to climb back to the levels of the year they bought. Seven years ago prices were the highest in history and the overall market is not back there yet. Those owners are staying out of the market because they don’t have to sell even though they want to.
So we are down to those selling for other reasons: health, death, long time ownership, lots of equity. That appears to be less than half of the seller pool.
Fortunately, there are only three years (2007,2008, 2009) in which prices were higher than right now. Unfortunately, over 5100 folks bought in those three years. That’s a large supply waiting to enter the market.
Normally, scarcity of product would force prices up quickly. However, the reluctance of appraisers and lenders to approve prices very much higher than the last sale keeps the lid on appreciation. Both appraisers and owners are waiting for each new sale to close at a slightly higher price than the last sale. This makes for a really slow recovery of prices.
As long as these conditions last it will be the best time for sellers in several years. It could take until late next year for the inventory to normalize and that assumes a 6 or 7 percent price increase this year and next. For now, it is as close to a seller’s market as we have seen in a decade.