Steamboat Springs in Spring is an excellent season! Flowers are up and things are getting green. We have just had several fronts move through that made sure that we remembered that this is still ‘Mud Season’. Today, the skies are blue and it’s 68 degrees. …
Steamboat’s weather is changing to Spring faster than I realized. One day recently, I was looking up at the resort and saw a large patch of dirt amongst the snowy runs. This was a surprise to me because I had been in full ski season mode, even though temperatures were rising.
With Spring, comes the closing of the resort on April 11th. This is very evident in the occupancy report.
This report I find very interesting. Looking at the red line, last year’s occupancy, and the blue line, this year’s occupancy, there isn’t too much difference. When the grey line, the historic actual line, one can see the effect the pandemic has taken on occupancy.
The historic actual shows how hard hit rentals got when the initial stay at home order was put in place and resorts shut down. So, a month and a half of income was lost, as well as a month and a half of good times not had by many. In the end, the red lines meant nothing for 2019/2020 season and may not reflect the actual volume of rentals that may have been made at the last minute. The blue lines may represent an average more so.
And looking at the blue lines through early March, the impact that the pandemic is having on skier stays. Business is down, though by the number of folks on the ski hill would make a person think differently. Up until last weekend, lines were longer than expected and traffic on the runs appeared average. Perhaps more owners are staying in their units – I don’t have this information.
Equally interesting to me is the trend through the beginning of shoulder season (mud season). The amount of persons coming to Steamboat Springs is equivalent year over year. During shoulder season, as residents, we welcome the break to the hubbub of Winter and Summer (and equally enjoy the return to activity). When we run into visitors in this time, it is interesting because they are almost an anomaly. Why would anyone want to be here when mud is everywhere and clean up crews are as well?
Looking forward, there does not appear to be anything changing these trends. Well, for the short term. Once we all have moved on from pandemic restrictions, it seems reasonable to expect occupancy numbers to go up. That being said, professionals in the short term lodging management industry have said that Steamboat rarely goes above 80% occupancy.
A close friend of mine is turning 50 years old in the near future. We have spent many days together and are over 400 days snowboarding together. We also have done other things frequently, like rafting and camping. When I asked him what he …
Things have changed in Steamboat for occupancy. This past weekend is a prime example. Tourists were everywhere enjoying Steamboat as best they can. Though lift lines were beyond record length, folks were enjoying the first real storm of the season.
The chart above is provided to me through the Steamboat Springs Chamber of Commerce.
Looking at the past weekend and comparing it further out, it appears that this weekend, Presidents Day and Valentines Day, will have an equivalent number of people here. Then, over the end of Winter, the historic pattern of bookings occurs. It appears to me from this chart that Steamboat Springs, still working with the same drop off of business as usual, will be above average for bookings, though down from last year.
We saw a similar pattern through the Fall mud season, where we had reduced number of tourism from Summer, but normal to above normal numbers.
COVID has brought a different trend for us this year. Families want to get out of their homes. I do too. Steamboat and other places in western Colorado are great places to get away to. With our communities now almost a year into COVID restrictions, caring for ourselves is different. Many people bring an Instant and order take out. Masks are commonplace. In fact, everyone would rather wear a mask and keep the resort open than risk personal or resort penalties.
2019/2020 was a better season for bookings, and this season isn’t too far off. It is a big question for most of us on how things are going to look different in the future.
COVID has kept most of us home more than we like, except for the best introverts. Recently, Kristen and I got serious cabin fever and had to escape our condo. Steamboat Springs, realistically, is in the middle of nowhere. Located in the northwest corner of …
The photo above was taken in early Winter. Today the ground is covered in at least a foot of snow everywhere. The weather was great through Christmas break, with a couple feet of new snow falling. This gave Steamboat the chance to open new terrain, including Closets and Shadows, two of my favorite tree runs.
It’s been over a month since I reached out to you with new information on the local Steamboat Springs market. Here is current information from the Steamboat Springs Board of Realtors:
I don’t think there is anything here that surprises you. The number of listings is down and the value of sales is up, across the market. Here is a snapshot of the activity on the MLS for the past several days (Jan 10-13):
The biggest question I am getting right now is “When will things change?”. This is most often from frustrated buyers.
Well, when it is going to change is a challenge to answer. There are several things we know:
- The pandemic has an end in sight
- Prices of real estate are causing people to move around differently than before in recent times
- Interest rates are not going up soon
- Appreciation without jobs to support home values will leave the market open to less workforce and diversity
I ran into an article about some Denver economists discussing how the real estate market in Denver is ‘running out of gas’. They pointed to facts that include:
- Colorado had been seeing a slow down of migration into the state for awhile
- Couples are delaying having children
- Slowing of job growth nationally
- And distressed sales will increase due to forbearance plans being granted and borrowers will be looking to relieve themselves of their debt.
These are things I can get behind. Most of these, for Steamboat, are a bit irrelevant. In the past 6 months, I have not run into one person who has used the forbearance option. Job growth here is pretty good except for well-paying jobs, which are not as quickly to be found. And babies are happening everywhere I am.
For the local market, I’m more inclined to think that things are going to continue to be vibrant. Well priced housing units in this market receive multiple offers in the first few days. And there are still buyers waiting for the right property. The backlog of buyers will take several months to relax.
This leads me to a think tank article I ran into on the long term value of Colorado real estate. This article states that the value of Colorado real estate, if it continues to appreciate like it has in recent years, by September 2030, Colorado real estate will be one of the most expensive in the United States.
For the first half of this year, I don’t expect much to change. For things to change that would cause the market to slow down, I would expect to see one or more of these things to occur:
- Change in interest rates or borrowing terms that make buyers step back.
- More housing inventory in the middle to upper income to become available.
- A change in everyone’s personal assets that causes a pull back in spending.
I don’t expect any of these things to happen soon. Overall, borrowing rates are not changing significantly this year. There are over 200 apartments coming on the market this year for middle income persons. This I don’t expect to affect the market because these persons normally cannot afford to purchase in Steamboat. Some can, but not the majority. And a change in personal assets, especially a stock market correction, doesn’t seem soon on the horizon.
That being said, here is an article by a smart fund manager who has predicted stock market changes correctly, within a few years, for his entire career. He states that stocks are overvalued now. (I can agree to this in most popular stocks.) In the next three years, he thinks there will be a correction that will be noticeable.
Perhaps the market over the past year was much like eating too much sugar or drinking a Red Bull. There is a lot of energy for a while and then there is an energy crash leading to a resting period. This is where I’m leaning towards. If I’m wrong, then this is a strong locomotive rolling down the line, hopefully not being driven by a monkey.
As I’ve often said, Denver trends are about 6 months ahead of Steamboat’s. When I found information on the rental market in Denver changing, I had to follow up. Today I ran into an article from the Denver Post about Denver rents going down. This …