Steamboat Springs Fall Colors & Market Update
Real estate is very local. What’s going on nationally doesn’t mean the same thing is going on here in Steamboat Springs. So today, not only are we going to talk hyper local real estate market here in Steamboat, where we’ve noticed two strong distinct trends going on, we’ll compare that to national trends. We’re also going to show you the fall colors currently in and around Steamboat, just because we know that’s what you actually want to see. Those 2 strong trends we’ve recently noticed in Steamboat are:
- New Nightly Rental Zoning Regulations
- Ski Area improvements
“According to the S&P CoreLogic Case-Shiller 20-City Home Price Index, home prices dropped 0.8% in July, the sharpest monthly decline since 2012. The declines that have occurred in many markets reflect mortgage rates in the 5%-6% range, and mortgage rates are now well above 6%. The increased sensitivity to interest rates suggests home buying will pull back even further.” Wells Fargo Economist Charlie Dougherty & Patrick Barley
That is true for Steamboat as well, we are seeing a slow-down. But we still have record-low supply and a decent demand so we’re not seeing huge price drops to sales prices. In our last video, see up here, we talked about the majority of price reductions we’re seeing are those properties that were overpriced to begin with.
“Keeping that in mind, we now look for home prices to register year-over-year declines in 2023, with the national median existing single-family home price expected to fall 5.5% during the year. We note there is likely to be significant regional variation. “
Yep, and one of those variations is playing out here in Steamboat. Last month, our city counsel passed our new SHORT-TERM RENTAL regulations.
These new regulations limit the amount of properties that are allowed to rent nightly. What this has done is increased the amount of interest in those properties in the GREEN zone. Thus, “green zone” properties are appreciating while yellow and red zone properties are either remaining flat or appreciating slower. With all the ski area improvements, Steamboat is becoming more appealing for those looking to vacation and own a ski area property and offset their mortgage with nightly rentals. Thus, even though we are in a typical shoulder or off-season, we’re still seeing pretty good activity for ski area properties. Nightly rental properties are selling in the $750 – $1,200 per foot range.
We believe a lot of this has to do with the ski area improvements, the IKON Pass and the new nightly rental regulations making green zone properties more valuable. Ok, Steamboat’s a pretty desirable location. In Steamboat Springs, our absorption rate, or months of inventory is roughly 3 months. Thus, it’s still a sellers-market. So, we continue to have a tighter supply of inventory. And thus, in theory, prices should “Hold up much better.” “If our forecast for Fed rate cuts is realized, mortgage rates are likely to fall slightly just as cooling inflation pressures boost real income growth. A modest improvement in sales activity should then follow, which will reignite home price appreciation heading into 2024.
”While national trends are expecting median home values to fall 5.5% during the year”
In Steamboat, on a hyper local level, we are seeing some asking prices correcting, but we’re not necessarily seeing values, across the board going down. If anything, real estate values are remaining relatively flat or trending slightly up for single family homes, but “green zone” or nightly rental properties continue to see prices rising. We believe these hyper local trends are due to the new nightly rental regulations and the ski area improvements.
Regards, Charlie Dresen & Travis Crooke
The Group Real Estate, Inc. 970-846-6435
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