REDFIN “The median U.S. home-sale price declined 0.6% year over year in February, marking the first annual drop since 2012–“

S&P CoreLogic Case-Shiller Indices recent report show home values dropping month over month in all 20 cities monitored.

Lately, the questions have been

• How’s the market? 
• Will inventory increase this spring/summer?
• What will happen with prices, and rates?
• Should I wait to buy?
• Is it too late to sell?

Ok- Don’t try to time the market. That’s almost impossible. What’s more important is the time spent in market that creates good returns. 

In general, the real estate market is more important than the property. Meaning, you could have an amazing home, but if the market is declining, that home will follow those downward trends. One thing resonates post pandemic – There are places people are leaving and places where people are going.  Appealing Shots of Steamboat. 

I’m excited for Steamboat.  I’m excited for the capital investment in the mountain resort. I’m also encouraged by the seemingly durable phenomenon of remote work. Steamboat is still an amazing place to live and others are figuring that out as well.

There’s a lot of negative headlines regarding the real estate market these days. (market crash, falling prices, housing bubble)

But I’m here to provide some real data to help answer your real estate questions.

Change is not easy. And we’ve just been through some of the biggest real estate changes this country has ever experienced. We’ve seen home values skyrocket. Interest rates double seemingly overnight. These boom/bust talks are gaining traction.  

Today, a lot of Seller’s are living 12 months in the past (when prices were rising 2-3% a month)

And a lot of Buyers are living 12 months in the future (where they are hoping to see homes prices dropping 2-3% a month)

But neither is accurate. The most recent data shows, we’re in a balanced market. I’m encouraged because buyers and sellers can make wise decisions. The urgency of the pandemic purchases is over and this market now allows time to shop, negotiate, inspect and otherwise make a more sound decisions compared to the last couple years.  

• Sold properties Jan-Feb (2022= 114) (2023=84) Sales are down from last year but it’s more in line with 2017, 2018, and 2019.  
• Pending sale down 34% year over year. Pending sales are low because we don’t have inventory to sell. If we had more listings, there would be more transactions. 
• Median Days on Market Jan-Feb (2022= 29) (2023=54) DOM are down from last year but it’s more in line with 2017, 2018, and 2019. 
• Median Sales Price for all properties  Jan-Feb (2022= $745,000) (2023=$745,500) 
• Asking price to sold price (2022 = 100%)  (2023 =95%)
• Active listings are up 14.3% recently (but still historically low) 

Supply / Demand drives prices. 

Supply is low, yeah inventory is up 14% recently, but were down 75% from the 14-year average of the available listings in Routt county  (graph here)

Demand is down with increased prices and rising interest rates. But with ski area improvement, and the general appeal of this community, we still have more buyers than sellers – keeping demand strong. 

Even though days on the market is up, of the 82 properties to sell or go pending in the last 30 days, 45% went under contract in less than 30 days. 13% took 30-60 days and remaining 41% took over 60 days to sell. We’re still seeing some multiple offers, but were also seeing price reductions as well if those aspirational sellers over-price their property.  

Again, we’re in a balanced, healthy market and for the most part, neither the seller nor the buyers have the advantage. As for prices, we aren’t seeing huge gains anymore, but we also are not seeing huge price drops either. 

 So, what’s ahead for the coming month as we head into the summer selling season? Well, inventory is not going up significantly anytime soon. There really no new construction coming on the market and roughly 85% of mortgage holders have an interest rate far below 6%, so many potential seller looking to trade up or down end up not do anything – so the resale market will be slower.

In 2005, people lived in their homes for an average of 6.5 years. Today, even though it’s trending down a bit, the average homes owner’s tenure is 12.3 years. (insert graph here) So people are living in their home longer these days. 

Consequently, many of the channels that increase inventory may not occur this spring and summer. But, historically the summer selling season typically sees inventory pick up by 200-300 properties. We may not see inventory double but it will increase this spring.

Mortgage Rates will likely stay in the 6% range as we head into spring and summer and maybe some lowering next fall where we might see them drop into the high 5’s but that still 2% lower than the long-term average rate.

Gone are the days of 3-4% mortgage rates. We’re starting to even adjust to these higher rates. We’ve seen how slight drops in interest rates show a pretty significant increase in loan applications and home buying as we saw last fall when rate dropped from 7% to 6.15% we saw loan applications increase 28%.

With stabilizing rates, I feel we’ll start to see more buyers come back to the market here in Steamboat. Will that increase in buyers outpace the increase of inventory?  If it does, we might see prices start to climb back up again. 

Remember, the market is more important than the property. Since Steamboat Springs is such a vibrant community, the current Steamboat market is more balanced and healthier than other national markets that are seeing more downturns in these unsettling times. 

One thing’s for sure, in today’s balanced Steamboat market, we’re now able to make more methodical, informed decisions in real estate because the pace of the buying and selling has slowed significantly. I’m excited for the ski area improvements, a huge snow year and I’m excited for the changes in the market back to a time where my representation and sound advice matters as I help guild you down the road to get from where you are, to where you want to be.