Who are the winners of the urban exodus?
In the economy, whenever there is stress in one part of the market, there are always winners and unfortunately losers. From the pandemic, there are three primary winners in ski real estate.
Land: I have been surprised to see raw land near ski resorts go as quickly as it has. I’ve seen some lots sitting on the market for extended periods of time, that are now selling.
Free standing single family: People want their own space and the ability to ride out future pandemics in comfort. In ski towns throughout Colorado, many second homeowners from large cities moved to their ski home to weather the pandemic. I don’t see this trend reversing, if anything it will only accelerate.
Multi-Family: There has still been plenty of activity in the Condo / Townhome / Duplex market despite these traditionally being income generating properties and the uncertainty f the upcoming winter. As a group they have matched the number of sales of single family homes
Ranches: Ranches, whilst not really a part of the Summit County market, have been slow movers the last 4 or 5 years as older generations aged out of the large properties and their kin no longer wanted the hassle of such a large property. The pandemic has put these properties back in vogue for their unique qualities and remoteness. Remote is now back in style in real estate as long as there is a good internet connection! Park County land sales are on the up.
In my last post on the State of the Market, I made some predictions that are playing out and being reinforced by continued high levels of activity. So why is this happening?
What is driving this trend of increasing prices and low inventory?
Second homeowners: There has been a shift of use by second homeowners in mountain communities, from infrequent usage and rental income, to more regular remote working from the second home and extended periods of use. This will drive less inclination to sell and reduce inventory.
High building costs: Building costs in many mountain communities is $500/ft and up, so a 3k foot home will cost 1.5m + costs of the land. There is a huge shortage of highly skilled workers and few available lots which substantially increases building costs.
Lifestyle enabled by remote work: the pandemic has ushered in a period of “forced” remote work and many workers and business owners quickly realized that they could operate in a remote environment which has opened up opportunities to relocate to more desirable locations like a Colorado Ski town.
What has happened in Colorado resort markets since July?
Since June, the real estate market in various resort communities has been busy. Data for July is not out as yet, however it is safe to say that in Summit County the preliminary numbers are impressive.
Statistics are for all of Summit County
- Sales volume for July 2020 vs July 2019 - 44% up
- Number of transactions July 2020 vs July 2019 - 43% up
- Number of listings on the market July 2020 vs July 2019 - Down 4%
- July single family sales - 134
- July condo sales - 96
- July townhomes sales - 32
- July duplex sales - 23
- July multifamily sales as a group - 151
- July land sales - 82
(Source - Summit County MLS)
In other Markets - In Steamboat from June 2019 to June 2020, the median sales price is up 18.3%(source Colorado Association of Realtors.) in Aspen during the first two weeks of July, 111 properties went under contract, compared to 46 the same period in 2019. These same trends are playing out throughout the high country as prices increase and inventory declines
What does the future look like for Colorado ski real estate?
Whilst I don't foresee this flurry of activity lasting through the winter months, I do see it lasting through the fall and then picking up again in the spring as the three drivers mentioned above will still be firmly embedded in the real estate market. Towns like Steamboat, Vail, Telluride, Aspen, Breckenridge, and Crested Butte will continue to do better and outperform the real estate market as a whole