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, 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.