MY PERSONAL REAL ESTATE INSIGHTS FOR THE NEXT 12+ MONTHS
The past 4-6 weeks have certainly been a very interesting time in the Summit County real estate market. Signaled by the opening of short-term rentals and the easing of COVID restrictions, activity in real estate has been very significant indeed.
Many of us have talked about a structural shift taking place, where the demand for an escape from metro areas would significantly impact our market. What many of us did not fully account for was how quickly this demand would ramp up and the degree to which buyers would be willing to act on the impulse and drive the surge in properties going under contract. As of today, the 20th July 2020, Breckenridge has 262 active residential listings available. There are currently 167 residential properties under contract. Put another way, pending listings represent almost 2/3 of the total number of residential listings that are active.
Is this heightened activity the result of a ‘mechanical’ rebound due to suppressed activity during April and May? Or is it a function of COVID related demand? My sense is that it is a combination of the two. The intensity of this increased real estate demand is likely to continue through the fall which mirrors our traditionally busy selling season.
So this begs the question – ‘What does the future hold?’
As mentioned above, I predict that we will continue to see an active buying and selling pattern through the fall. This winter is a tougher prospect. Certainly, much depends on how much the Breckenridge Ski Area is able to offer this ski season, I have no doubt that they will be doing their best to offer the most terrain to the highest number of guests possible. Regardless of how busy the ski area is, I believe that we will have a contraction in buying and selling activity this winter. Pricing will be impacted by confidence factors such as how close we are to a vaccine (recent news is positive), short term rental availability (we have been very busy so far this summer) and how much capacity the ski area can sustain. The spring will offer a rebound in activity and I have no doubt that the structural shift of people acquiring second homes or spending more time in the mountains and working from home will resume.
My advice to investment buyers (who are looking at rental income) is that if they find the right home and they are looking for a long term investment, they must be comfortable with the price of the home and they should build in contingency funds for this winter in the short term.
I have had many conversations over the past few years with clients waiting for prices to drop and the market to become a buyers-market. The reality is that even with the shock of COVID this has not happened. Logic would point towards a strong buyers-market but the reality is that we are in a neutral position between seller and buyer markets. Buyers are ready to enter real estate investments and sellers are also keenly aware of pricing and not overstepping the mark.
As is always the case with real estate transactions, there is never any substitute for good knowledge, making sure that you target the main reason for purchasing and making sure that you have pre-planned all the financial requirements.