The Steamboat Springs real estate market is not the only resort market to have softened over the past several months. Comparing results posted by affiliate members of the Rocky Mountain Resort Alliance, a trade organization of MLS boards throughout the Rocky Mountains, seven of the boards that have posted results for the past five years show a similar downturn in activity.
For the first six months of 2008, the Colorado resort areas of Summit County, Telluride, and Vail, along with Park City, UT, Sun Valley, ID and Jackson Hole, WY are all reporting slower than normal sales.
Listing inventory in the Steamboat Springs Multiple Listing Service is at an all time high, with over 2,100 properties for sale at the end of the second quarter (June 30) of 2008.
The 5 year average is 1,338, equating to 159% of the 5 year norm. Park City, UT is right behind Steamboat at 158% of normal, while Sun Valley is the lowest and sitting near average at 102% (1,574 listings).
Of the seven resorts surveyed, listing inventory in Steamboat has the highest percentage increase over the 5 year average.
Over the past 5 years, Steamboat has averaged 669 transactions for the first half of the year. In 2008 only 462 sales closed, representing a 69% performance from normal.
However, comparing the other areas, this is the second best result, as Telluride is at 78% of normal in sales, while Jackson Hole is at 59%, Summit County is at 58%, Vail and Park City are at 53% and Sun Valley saw a total of 187 sales in the first six months of 2008, which is only 47% of their 5 year average of 399 transactions.
The absorption rate, which is the relationship of how rapidly the inventory (listings) is absorbed by the market (sales) or, supply vs. demand, shows Steamboat sitting in the middle of the pack. The first half of the year has our absorption rate at 43% – quite a way off of our 118% 5 year average or 37% of normal. Telluride fared best in this category at 58% of normal and Park City has the worst absorption rate at 27%.
The absorption rate provides a buyer and seller with an idea of how long one would expect a property to stay on the market. As an example, a 100% absorption rate would mean there would be 200 listings in a year and 200 sales per year. A 50% absorption rate would equate to 200 listings a year and 100 sales, and one would anticipate a property to be on the market for two years before it sold.
Of the seven markets surveyed, Steamboat typically sits in 5th place in total dollar volume. Vail averages slightly over $1 billion in transactions for the first six months of the year. Park City sees $800 million, Summit County averages $422 million, Jackson Hole $314 million, Steamboat $303 million, Sun Valley $274 million and Telluride comes in at $155 million.
Although the number of transactions was down significantly, the total dollar volume of transactions did not seem to be affected as much. Steamboat hit 84% of its 5 year average at $253 million, and as mentioned earlier had 69% of the normal number of transactions.
Summit County showed the best at 92% of their average, while Sun Valley fell off dramatically at 51%, or $139 million of their average $274 million of total dollar volume for the first half of 2008.
Even with the slowdown, the average prices for a majority of the seven resort areas increased over the past year. In Steamboat, the average price dropped 2% from the prior year, to $547,000 from $558,000.
Sun Valley and Telluride dropped as well ($819,000 to 743,000 and $1,494,000 to $1,313,000 respectively). Jackson Hole increased from a first-half 2007 average price of $1,312,000 to $1,708,000 in 2008, and Vail increased from $1,169,000 to $1,447,000.
What does this all mean for the Steamboat Springs real estate market?
First of all, it’s nice to know that we are not the only market experiencing a slowdown. National and international factors have all contributed.
Second, for the end of 2007 to beginning of 2008 Steamboat activity was accelerated more than the other resort areas due to the ski area, Sheraton, Bear Claw III and Steamboat 700 sales, among others. Take these sales out of the picture and how they impacted the market and our downturn is not as dramatic as most of the others.
However, what is most interesting is the number of listings currently on the Steamboat market. In the record year of 2007, there were 1,729 sales and averaged 1,081 listings over that time. With half of 2008 completed, Steamboat is sitting with 462 sales and 2,125 listings.
Double the sales totals for the first half of 2008 and we could be at 920 sales by year-end. That equates to over a two year supply of listings! Park City is in a similar situation, and one could argue that Vail is, as well with 145% listings than normal.
However, Vail only has 300 more listings than Steamboat, and conducts nearly twice as many sales. Acting in our favor is that with an average purchase price of $546,000, Steamboat Springs real estate is, by far, the most affordable market area surveyed, which should attract those seeking value in a Rocky Mountain resort town.**Nothing on this website should be confused with financial or legal advice. If you need this, or any other type of advice, please seek the help of a competent professional. In addition, because real estate laws change all the time and differ from state to state, and even city to city in the same state, everything in these pages should be considered general marketing advice and ideas. Please see link to full Disclaimer at the bottom of this page.