With the first half-year of 2008 in the rear view mirror, data compiled from the Steamboat Springs Multiple Listing Service from the first six months reveals a continuing slowdown in real estate activity in the Steamboat area real estate market that began in the fourth quarter of 2007.
The record pace that began in 2003 and carried through until the 4th quarter of 2007 has not only been tempered by local conditions, but also national concerns. The recent sale of the Steamboat Ski Area, as well as other large real estate holdings accelerated the market over the past several years.
On a nationwide level, the loss of access to easy mortgage money, a struggling economy and election year uncertainties have consumer confidence at a lower level than prior periods. Combined, results show the market performing in a slightly less than normal course. A 23 year trend analysis estimates transactions should be around 675 for the first half of 2008, however actual posts show 462 transactions in the first six months.
In the shorter-term second quarter of 2008 (April 1 through June 30, 2008), the MLS posted a total of 225 transactions, $135 million in dollar volume and a median price of $315,000. With the unique circumstances and resulting sales surge in 2007, it would be more reasonable to compare market performance on an average rather than to last year’s record setting pace.
Consequently, since 2000, the average for the second quarter activity is 377 transactions (-40%), $154 million in dollar volume (-12%) and a $265,250 average for the median price (+6%). The second quarter of the year is typically the second most active quarter in Steamboat.
More notable is the increase in the number of listings. Now, with over 2,000 listings in the MLS books, buyers have more property to choose from than ever before (or at least since 1995). At the conclusion of Q2 of 2007, there were 1,046 listings.
With all of the construction that has occurred over the past several years and the new construction that is adding more product to the market, it is reasonable to expect listings would increase.
However, the quarterly absorption rate (number of sales divided by the number of listings (or supply to demand ratio)) calculates to 11% for Q2, which is was a much lower rate for the Steamboat Springs market than what it has experienced since the 8% rate posted in Q1 of 2003, and the first time the rate has dropped four consecutive quarters.
The absorption rate is the rate at which inventory is consumed by the marketplace. An 11% quarterly rate means 11% of the listings are absorbed (purchased) by the market in a 3 month period. The highest quarterly absorption rate in Steamboat Springs was during Q2 of 2007 where 54% of the listings were sold in that three month period. The lowest was 7% in Q1 of 1997, and the eight year quarterly absorption rate average is 20%.
From 2000, the average number of residential transactions (single family homes, townhomes, condominiums, mobile homes, timeshares and farm & ranch properties) averaged 264 in the second quarter with an average median price of $354,887. In 2008, the second quarter posted 136 transactions (-48%) with a median price of $477,500 (+35%).
The least expensive single family home purchase in Routt County was a two bedroom, 976 square foot home built in 1911 in Phippsburg for $157,000. The most expensive was a 9,400 square foot mountain estate situated on 149 acres with an 11 acre reservoir, detached caretakers quarters and custom barn.
Located in the South Valley, the property was purchased for $8 million…$1.5 million below list.
Of the 46 condominiums that sold in Q2, a Mt. Werner Meadows condominium at 295 square feet was the most affordable, and was purchased for $165,000, or $559 per square foot. At 2,182 square feet, a four bedroom and bath, slopeside Christie Club condominium was the most expensive purchase at $2 million, or at $917 per square foot.
A brand new 3,465 square foot Stonewood Townhome captured the high sale in its category at $1,887,775, while a modest two bedroom, one bath 969 square foot townhome in Hayden was on the other end of the spectrum and sold for $159,000.
The land market was down considerably in the second quarter of 2008, posting only 48 sales. Average for Q2 is 90, equating to a 53% decline. This trend is not surprising and likely will continue as less land is available for development (and is becoming more expensive with added regulations). As supply declines, it is little surprise the median price was up a substantial 86%, to $302,000 from the prior eight year average of $162,222.
An unbuildable $7,000 lot near Steamboat Lake was the least expensive purchase, while the most expensive land purchase was a 664 acre parcel near Stagecoach for $6,250,000.
There is no doubt the amount of inventory in the Steamboat Springs market will slow the rate of appreciation all properties have experienced over the past several years.
However, there remain certain property types that are still difficult to find (older slopeside condominiums or acreage under $200,000, as examples). At the current sales pace, it will take a while for the market to absorb what is already available, but the market has been in similar situations before. As with all markets, sellers and buyers will make the final determination on when the time is right to make their move.