I hope you are having a chance to enjoy the summer and it is hard to believe we are almost into August! I think that some of the time warp is a result of the summer real estate season being the first since 2020 that has seen a noticeable shift in the buyer and seller dynamic.

Whereas the past number of years has been characterized by low inventory and short days on market,the summer of 2024 has been one of increasing inventory and lower transaction metrics. Monetary volume in June 2024 was down 10% and transactions were down 20% from June 2023.  Interesting to note that YTD 2024, transactions were up 4% and $ was up 26% from YTD 2023. Active listings in July were 1,390 in 2024 compared to 1,147 in 2024

Active listings in Summit County – Number by month

Whilst hindsight is always the precise definition for such trends, it is worth some thoughts on why the market is recalibrating.

Firstly, most of us realized that with the frantic pace of sales in recent years, there would always be a hangover from the party, when the stock of buyers would be depleted as they had already made their purchases and activity would soften.

Sellers have been keen to present their properties for sale this summer. Inventory is up. Pricing has been robust and this in large part is fueled by the seller ‘community’ being very healthy, namely benefiting from high equity levels and low interest rates. Put shortly, many are not feeling any ‘pain’.

Buyers, by contrast, are in a stronger position than they have been for several years, and with this being an election year, may well be holding tight on the big-ticket purchase. They also are hearing noises of interest rates coming down with recent favorable inflation news and if looking at a purchase with a loan, might be waiting for the rates to drop.

The combination of this push and pull between sellers and buyers has resulted in the number of transactions being lower this summer than last.

All in all, my sense is that we are getting back to a more normalized market and whilst the shift may feel significant, It is worth moderating too much interpretation as we must remember the peak from where we are transferring.

Breckenridge Single Family Homes:  Values are up by 16.59% year-to-date (YTD) compared to 2023, with an average sold price of $2,777,979. Properties are selling at 96% of the list price, averaging $791 per square foot (SF), and spending 72 days on the market (DOM).

Breckenridge Townhomes:  The market has slightly leveled off, down by 1.82% YTD compared to 2023. The average sold price is $1,603,098, selling at 99% of the list price, $855/SF, with an average of 52 DOM. This slight decrease is attributed to the mix of older townhomes being sold and fewer new townhomes available in 2024.

Breckenridge Condominiums:  Values are up by 10.00% YTD compared to 2023, with an average sold price of $988,853. Condos are selling at 97% of the list price, averaging $1,068/SF, and spending 39 DOM.

If you would like to have a chat about a particular home / neighborhood or the market in more general terms, ping me a note  by email or call me at 1-970-389-1654

On this blustery day in the mountains, I wanted to take a moment to help explain the recent NAR Settlement – Real Estate Commissions

No doubt there are many of you have been reading about the class action lawsuit settlement between the National Assoc of Realtors and the plaintiffs regarding a commission dispute. 

The main premise of the suit is that the plaintiffs accused realtors and real estate agents of ‘price fixing’ commissions. The reality of the situation is that commissions have always been fully negotiable. In the perfect scenario an agent will have discussed the commission to sell the house and that this commission is split with the buyer’s agent. Colorado listing agreements offer sections to fill in both the gross commission and what the split between the two agents will be. All parties then are required to sign (and hopefully have read) the listing agreement.

So where did the issue arise from? My belief is that there have been documented cases (voicemails, video calls etc.) of brokers saying something along the lines of…… “if they are not paying X% commission, then I won’t show the property” – This is against the code of ethics and basically very bad business. Steering clients is not allowed. Whilst not commission fixing, enough examples of this allowed the plaintiffs to make a case worthy of a settlement if not one that would have held up in court. It is worth noting that the NAR did not admit to any wrongdoing.

The reality is that because of these steering situations, the settlement was agreed upon with certain provisions. The settlement still must be ratified by the DOJ – most likely either July or August this summer.

The two main outcomes are as follows:

1. There can be no mention of the co-op commission that a seller is offering to the buyer agent in the MLS. The offer of a co-op commission can however be publicized on the brokerage website or non-MLS literature, or a buyer’s agent can ask the listing broker directly if the seller is offering a commission. 

2. Buyer’s agents are required to sign up all buyers to a Buyers Agency agreement prior to showing any property. This agreement requires the compensation being paid to the buyer’s agent to be clearly cited.

So, what does this mean for the consumer? i.e., the seller and buyer. 

I think there will be more transparency in the process for all agents and consumers. For experienced agents who have always used buyer agency agreements and explained commission levels to sellers, this will not be a huge departure from the norm. For some it will no doubt be a change.

The seller can still offer a co-op commission to the buyer’s side.
The seller can offer seller concessions to the buyer to cover closing costs etc. 
The buyer’s agent can still ask if the seller is offering a co-op commission.

There has been some discussion or indeed hope that this will reduce the price of housing. My professional opinion is that this will not be the case. With inventory levels low and sellers still feeling in a position of strength, I do not think they will drop their pricing. This is not to say that more systemic changes in the economy or interest rates won’t still have an impact on pricing.

I think that there is still a very good argument for sellers to offer a co-op commission. 

1. It ensures that both sides of the transaction are represented by qualified professionals who are incentivized to engage in the successful closing of the contract.
2. It ensures that the buyer does not have to use funds ear marked for a down payment on a home to pay their buyer’s agent. 
3. Having unrepresented buyers or buyers being represented by the listing agent can expose the contract to bias and ensuing legal matters. 

Ultimately, the onus is on us as real estate brokers to demonstrate our value, the value in showing and identifying suitable properties, the value in writing up a winning contract and the skill of negotiation, and finally the often-misunderstood value of the closing process. Namely all the details, inspections, paperwork etc. that ensures a smooth transaction. Details that often get done without the buyer or seller fully appreciating the behind the scenes work that goes on.

If you would like to have a chat about this, do not hesitate to give me a call.

1^st Quarter Real Estate market snapshot

YTD All Summit County

There were a total of 303 transactions and $380,439,483 in monetary volume.

The average transaction price for all 18 areas, plus deed restricted transactions, was $1,295,284,

The average residential transaction price was $1,424,366

The average residential Price / sqft was $829. 

Market Snapshot for YTD 2024 vs YTD 2023:  

Average indicators for $ amount:

Single Family +18%

Multi- Family +6%

Vacant Land -31% (there has been very little activity)

Median indicators for $ amount:

Single Family +21%

Multi- Family -7%

Vacant Land -48%.

Comparative Historical Cost Analysis Comparison YTD 2024-2023-2022: 

In 2024, there were 235 transactions with $334,725,920 gross monetary volume with 127 properties selling for over $1M.

In 2023, there were 211 transactions with $282,899,824 gross $ volume with 98 properties selling for over $1M.

In 2022, there were 308 transactions with $416,484,430 gross $ volume with 145 properties selling for over $1M.

FULL REPORT

As 2023 draws to a close, it is interesting to see how the market has fared. Here are some year-to-date indicators to start with;

• Market Snapshot for YTD 2023 vs Full Year 2022:  
  Average Indicators;
  Single Family -1%,
  Multi-Family +6%
  Vacant Land -1%
  
  Median Indicators for; 
  Single Family +1%
  Multi- Family +11%
  Vacant Land -2%
  
  
• Market Analysis % Change YTD October 2023: 
  Monetary volume in October 2023 was up 4% from October 2022.
  Transactions were up 2% from October 2022. 
  YTD 2023, monetary volume is pacing 18% down, transactions 14% down YTD from 2022. 
  
  
• Average Price History by Type YTD 2023: 
  Average price for residential;
  Single Family $2,030,400
  Multi-family: $957,617
  Vacant Land: $662,527
  
  
• Comparative Historical Cost Analysis Comparison 2023-2022-2021: 
  YTD 2023, there were 1018 transactions with $1,351,400,710 gross monetary volume, with 529 properties selling for over $1M.
  YTD 2022, there were 1194 transactions with $1,584,487,607 gross $ volume with 582 properties selling for over $1M.
  YTD 2021, there were 2012 transactions with $2,231,688,763 gross $ volume with 728 properties selling for over $1M.

The main takeaway from this is that compared to 2022, multi-family properties are performing well. This is in large part due to the fact that they have not been affected too severely by the Short-Term Rental (STR) license restrictions that have been introduced countywide in Summit County. Whilst you would image that higher interest rates would have had downward pressure on this sector, it has been a long time since positive cash flow could be achieved in our market based on an 80/20 loan to value split and as such, buyers are coming with higher levels of cash, so interest rates are not overbearing.

On the whole, single-family homes have been pretty static price wise. With luxury homes performing better than mid-tier homes that have been affected more by the STR licensing.

It is no real surprise that dollar market volume is down 40% and number of transactions is down 28% since the peak of the post covid surge. The difference in these two % points does illustrate that price points have been in general resilient in our market.

Looking forward to 2024

Increasingly the notion of a ‘soft landing’ is looking more and more likely. Inflation rates are closer to the Fed’s target of 2% and recent indicators are showing a cooling in the employment market. With the likelihood of interest rates being maintained at their current levels for the first half of 2024 and potentially dropping in the second half of 2024, along with plenty of liquidity in the economy, my sense is that 2024 will mimic much of 2023 with pricing holding up, inventory remaining low and transactions at a similar level. Look for properties to take longer to sell and buyers to be discerning with where they target. A normalized market that feels similar to 2019 than the rampant market of 2020 and 2021.

August 2023 continued the trend of increased transactions and gross volume across Summit County.

• Market Analysis by Area for August 2023: There were a total of 179 transactions and $207,167,239 in monetary volume. The average transaction price for all 18 reported areas, plus Deed Restricted transactions, was $1,233,456, the average residential price was $1,323,501 and the average residential PSF was $793.

• Market Analysis by Area 2022 (8 Months) YTD:  There were a total of 974 transactions with $1,120,997,223 monetary volume. The average transaction price was $1,222,720, the average residential price was $1,319,515 and the average residential PPSF was $791.

• Market Snapshot for YTD 2023 vs Full Year 2022:  Average Indicators for $: Single Family -1%, Multi- Family +5% and Vacant Land -1%. Median Indicators for Single Family +1%, Multi- Family +10% and Vacant Land -7%.

• Market Analysis % Change YTD August 2023:  Monetary volume in August 2023 was down 5% from August 2022. Transactions were down 8% from August 2022.  YTD 2023, monetary volume is pacing 27% down and 18% down with transactions from YTD 2022. 

• Residential Cost Analysis:  Residential volume in August had 140 transactions with $185,290,106 gross volume. There were 71 properties that sold for $1M and above in August.  There were 48 Single Family, 92 Multi-Family and 7 Vacant Land transactions in August.  

• Average Price History by Type YTD 2023: Average price for residential Single Family: $2,038,006, Multi- Family: $941,051 and Vacant Land: $656,152. 

• Comparative Historical Cost Analysis Comparison  2023-2022-2021:  YTD 2023, there were 742 transactions with $979,080,267 gross monetary volume with 377 properties selling for over $1M. YTD 2022, there were 922 transactions with $1,233,026,704 gross $ volume with 465 properties selling for over $1M. YTD 2021, there were 1512 transactions with $1,623,212,899 gross $ volume with 528 properties selling for over $1M.

• Top Lender Analysis August 2023: There were a total of 291 loans, 105 loans related to sales, 55 REFI's and 131 timeshare loans in August with 41% of real estate deals closing with cash.

• Foreclosure Update:  There were 11 foreclosure actions in August, compared to 3 in August 2022, YTD there have been a total of 47 foreclosures actions, 38 being timeshares.

• Purchaser Profile Abstract:  New unit sales were at 12 in August compared to 13 in July.  There were 76 upper-end sales in August compared to 67 in July 2023.  Our buyers for real estate transactions for YTD 2023: Local buyers 29%, Front Range demographic at 36% and 34% were out of state buyers with 1% International. 

•

Please note that Land Title data comes from actual recorded transactions at the County Clerk and Recorder’s Office for that particular month. The information is not directly related to MLS data. The data is an unofficial tabulation of Summit County Records that are believed to be reasonably accurate.

Below are details about Summit County for June, as well as Q2 2023. 

• Market Analysis by Area for June 2023: There were a total of 128 transactions and $141,899,800 in monetary volume. The average transaction price for all 18 reported areas, plus Deed Restricted transactions, was $1,171,322, the average residential price was $1,260,669 and the average residential PSF was $795.

• Market Analysis by Area 2022 (6 Months 2nd Quarter) YTD:  There were a total of 649 transactions with $744,874,039 monetary volume. The average transaction price was $1,213,122, the average residential price was $1,315,607 and the average residential PPSF was $788.

• Market Snapshot for YTD 2023 2nd Q 2 vs Full Year 2022:  Average Indicators for $: Single Family -3%, Multi- Family +5% and Vacant Land -14%. Median Indicators for Single Family -2%, Multi- Family +9% and Vacant Land -17%.

• Market Analysis % Change YTD June2023 2nd Q:  Monetary volume in June 2023 was down 25% from June 2022. Transactions were down 20% from June 2022.  YTD 2023, monetary volume is pacing 34% down and 25% down with transactions from YTD 2022. 

Exploring the Winter Wonderlands of Breckenridge, Keystone, Copper Mountain and A-Basin

Introduction:

Nestled in the heart of the Colorado Rockies, Summit County is a winter wonderland for skiers and snowboarders alike. With its picturesque landscapes, abundant snowfall, and world-class ski resorts, this region attracts snow enthusiasts from all around the globe. Boasting a delightful blend of charming alpine towns and exhilarating mountain terrains, Summit County offers an unparalleled winter sports experience. In this article, we will take a closer look at four of the most renowned ski resorts in Summit County: Breckenridge, Keystone, Copper Mountain, and Arapahoe Basin.