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Steamboat February 2021 Market Check In

The past month has been epic skiing.  Though the snow was slow in the earlier season, February was true to us and brought a great storm cycle!  It was good to get into steep terrain and float on some deep powder. Here is a link 

Steamboat Springs Occupancy Report February 2021

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 

Steamboat Mid-February Snowstorm

Snow fell constantly for a long time. Steamboat Springs was a great place to be for this Winter storm!

This season has been a slow snow season.  We get a few to several inches each week, but the big snowstorms have been elusive.  

I’ve come to really enjoy having multiple days in a row when I look outside throughout the day, or night, and see snow continuing to fall.  I quote one of my favorite Teton Gravity Research lines “It’s still snowing!” every time.

This year has been quite different.  We have had some snow storms, but they were quick.  And we had one snow squall where the snow came in at 40 miles an hour and dumped 4” in 45 minutes.  The storm looked like a dust storm moving across the land.  Lightning and thunder lasted the entire time.  After living in mountain areas for over 40 years, I’ve never seen anything like this.  Here is a video of it that was shot from southeast Steamboat Springs:

This week is a few snow storms in a row.  Town is pretty excited.  We have heard stories of the new four feet of snow in the Sierras.  I know- that’s common.  But not this year.  The projection is 8-16 inches of new snow on the mountain.  In town, that will be 4+” over the week.  Maybe as much as 10” in town.

Wednesday update: Well, the snow was supposed to begin at noon.  No snow has come about.  And interestingly enough, it’s supposed to rain a couple hours before!  This is the beginning of February.  It shouldn’t rain until later March.  With as warm as it is, and the delay in precipitation, it looks good for a big dump of snow.

Around 5:00 it started snow and rain mix.  By 7:00 it was snowing consistently- a light, constant snow.  Over the next few hours it snowed over a couple inches, but the warm air prior melted off a significant amount.  I went to bed after gazing out over the south valley – I saw thick clouds lit up by city lights, and flakes continuing to fall.  In the morning, I had inches on my truck.  There was 7 inches at the top of Storm Peak.

Now for Friday!  We are supposed to get up to two feet of snow for the whole weekend.  By the time I made it the resort in the afternoon, there was a great base of new snow.  The turns were light and the snow fun to maneuver.  The snow brought lots of control, so the runs were fast.  I will disclose that there was  a big wind, probably 40 miles an hour.  For me and my ski buddy, we found Ted’s Ridge to have great snow and no wind, and no one on it.  It was a great afternoon.

For the weekend, I saved the Saturday snow for the tourists in town.  They enjoyed an 18 inch storm total day.  From what I heard, the snow was excellent and crowds heavy.  All across the ski towns of Colorado, the resorts were filled with Front Range visitors who also had not see any good snow all season.  I’m grateful to have been up on Friday, and going on Sunday.

Sunday was all fun.  The snow was a little bit like cake, and overall great to push on.  Getting a couple of days on the hill has made my demeanor sooooo much better!

Deep snow for days!
The steepest runs had just opened. No Names is my favorite, and it didn’t disappoint.

Getting Out of Steamboat for the Night

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 

Steamboat Springs Local Market Report January 2021

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, 

Steamboat Springs Rents November 2020

Lincoln Avenue, Steamboat Springs’ first snow 2020

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 is the second article they published like this in a month.  The first one was citing the Pandemic as the leading cause.  The second article spoke more about overall trends and that Denver is seeing reductions greater than comparable cities.  Year over year, rents are down 5.2% in September.

Rents went down in the metro area and in the burbs.

As far as I can tell, rents in Steamboat are holding.  There were some landlords in the early stages of the Pandemic that jumped at lowering there rents, and changing into long term rentals, that got renters quickly.  After a few months, rents were back at pre-Pandemic levels and folks were filling them up.  

Today, at the beginning of October, it is difficult to find anything to rent, long or short term.  Values are also holding.  As a big change I rarely see in Steamboat, there were offers for rent to own homes.

When I hear Denver rental rates are going down, I have to ask, what does this mean for Steamboat?

My thoughts and observations are:

– current indications point to rents maintaining values through Winter

– current interest rates make it easier to buy a home rather than pay rent, which is commonly higher than the mortgage 

– purchasing/moving due to the Pandemic seems to have subsided for the meantime

– a number of apartments are coming on the market in 2021, just less than 200.  These are all meant for the workforce and lower income folks.  And this item, I expect, will have a large affect on the value of rents.

– many purchasers over the Summer do not intend on renting their new homes

– commercial property is becoming more available as months go by, and landlords are consistently getting low-ball offers for their spaces

It is hard to say what will happen in Spring.  Normally I would say that with the number of good jobs available here that housing will continue to go up in cost/value.  And Denver has many new and well-paying jobs.  Seeing Denver and other areas with rents decreasing, I wouldn’t be surprised to see this trend move to rural areas as well.

Stroll to Downtown Steamboat Springs

The first snow came to Steamboat!  What a great day this always is!  And today was a great day, with everyone staying inside and watching it snow for hours.  Good thing it’s also a Sunday so football could be a great distraction. But not for 

Gilpin Lake Hike, Two Times

Gilpin Lake hike is a classic Steamboat Springs locals hike.  The terrain is rocky and uphill, but the canyon views are outstanding.  For me, I did this hike twice in the last month.  Once because I really wanted to see the lake and, second, to 

Steamboat Market Report October 2020

Hole 2 at Haymaker Golf Course this Week

Steamboat has been dry, sunny, and full of Autumn color now for a weeks.  It’s been wonderful to have Fall breezes and blue skies for a long time.  Yes, we had some weather – like the windstorm that took out hundreds of trees on the mountainside and the few inches of snow we had.  This weekend might be more snow, with the upper mountain areas seeing 10 inches or more.  But you’re reading this for the data, so let’s get to it.

The market is slowing down right now, more so due to seasonal patterns more than anything else.  This time of year we generally see a slowing through Winter and energy picks up again in Spring. 

I have been monitoring the expected overall market activity in the nation.  The third quarter was kick butt as our communities worked to recover from the Spring shutdowns as well as other changes in our lives and living.  The fourth quarter isn’t expected to be much of anything, with growth being about 10% of what we just experienced.

What about real estate?  Great question, and one I ask almost daily, and definitely whenever I come across another data point.

Value Increase:  For the Summer, depending on the type of property being purchased, values in Steamboat rose 10-17%.  Some of these purchases were persons moving here.  Some of them were persons wanting a place to escape to.  And some were buying because money was cheap and they could diversify money into a growing destination area.

Foreclosures:  I’ve read many opinions on what real estate will do over the next while.  One that I found interesting because I saw the same trend.  Over the past several years, foreclosures have been few and competition for the opportunities strong.  With the trend in renters not being able to pay landlords, and some homeowners who cannot recover from lost income, foreclosures are imminent.  This is most likely going to look like a ‘regular’ or ‘normal’ rate rather than the trends we have just seen.  For Steamboat, I don’t expect much of this.  Owners here are commonly wealthy and smart.  This will reduce our rate of foreclosed properties.  

Still Moving Out:  To me, any conversation of the City moving to the Country isn’t very valuable.  I agree that downtown metro areas will continue to see an exodus.  To equate that to Steamboat growth doesn’t make sense to me.  Most of this movement is to the suburbs.  Movement to destination areas like Steamboat or Summit County will continue, just at what rate is the money question.  

National Slow Down:  Yep, it’s going to happen.  Right now, some pundits consider our pre-COVID pace will occur in Summer 2021.  I think it is premature to make any kind of determination about that.  Many factors ranging from the decisions of government leadership, growth of illness shutting down sections of the economy and states, supply chains maintaining health, and general mood of local and national communities are volatile to price into any projection beyond three months.

Market Pick Up:  I’ve for a couple of weeks now have been thinking the stock markets have priced themselves for a Democratic sweep nationally.  This will change many things from stimulus packages to handling of the virus.  Even with the tech shakeup just beginning (and this shakeup has been coming now for at least three years), most industries will still produce steadily.  

I’m most curious about how homebuilding stocks and supplies will fare.  It appears that this industry is very positive.  But still, I’d like to find the answer to ‘how many houses do we need before we have too many?’  There are replacement houses that need built.  There are towns where jobs are booming and need housing.  And there are destination areas that are seeing small growth from location neutral businesses.  In Steamboat, there is a housing unit for every resident in this town.  Yes, this is typical in a resort town, and is still a little fascinating.  

Really Long Term:  Steamboat Resort has plans to continue expanding.  A new gondola to take persons to the top of Sunshine Lift, Pony area expansion, as well as making beginner skiing more accessible are indicators of the Steamboat Resort’s bullish outlook.  For housing, developers who own lots in Steamboat Springs are not moving them quickly and are not in a hurry for anything.  The City of Steamboat Springs’ leaders have difficulty negotiating with big developments.  And expanding the city areas is slow going at best.  These factors will continue to put upward pressure on the values of homes in the city limits.

Opportunity Now:  Where would I put my money?  Most segments of this market look like they will grow and the properties purchased/held performs per strong investment strategies.  Of course, the commercial is soft when it comes to retail and hospitality type properties.  These values will eventually grow once new renters with strength return.  Where I think the best values are now are properties that outside of the city limits.  It’s my perception that bedroom communities nearby are seeing a renaissance which is not being seen by many because so much attention is being given to Steamboat.

History Repeating:  I’m a contrarian by nature, sometimes kicking my own butt for being more conservative than necessary.  From many whom I’ve learned the most, they believed history to repeat itself.  (Of course, I’m still waiting for the value of bonds in the 1980’s to come back!)  What I have noticed is continuing conversation about war with China over the South China Sea (and most recently about invading Taiwan).  And the lack of stimulus monies being distributed by the government.  And comparing news headlines from 1918-1920 to those of today.  Too many similarities from 100 years ago to today for me to increase my debt without good cause or use more discretionary income.

History Repeating for Real Estate:  Though times were just as awkward this time in the last century, and the stock market was uncertain, even during the Great Depression values on homes increased.  Here is a graph from the Federal Reserve Board of Dallas from a  2014 report titled No Price Like Home: Global House Prices from 1870 – 2012

Success Is Inevitable:  America rocks.  Though we have our differences, we know how to survive and maintain being leaders internationally.  I’m confident in America and our long term economic prospects.

Steamboat Springs Market September 2020

Is September almost over?  The first half of the year seemed to drag along and now it’s three months to Christmas.  Wow. Steamboat has been very busy all Summer.  Many tourists came through town.  Given the amount of RV’s that went through town as well