The weather has stabilized here with rain coming every now and then rather than every day. The fields here are very green, with the hues of many kinds of grass making a textured landscape that is agreeable. The Yampa River hit its peak early last week and is now clear enough to feel like going fishing would be a good idea.
The real estate market here is showing signs of clearing as well. For the past few weeks, there has been a noticeable change in transactions occurring. The day-to-day properties for sale versus the number of closings indicates that we are seeing more inventory on the market.
There are more persons backing out of transactions now, whether they be cash deals or involve a loan. This to me is significant when for more than a year it was rare to see someone not close a property.
Also, there are more properties lowering their prices. After years of consistent price growth, sellers are finding they are sitting on their assets with no offers. Often with few or no showings. The higher-end homes are seeing price decreases of up to 10% of the asking price. 5% seems to be more common. And there are a few Sellers who drop a small amount in hopes that something will occur.
And from watching the number of sales on a weekly basis, it appears that our market is consistently selling $30 million-plus weekly. No real changes up or down in a while.
Overall, I don’t expect much to change in our market in Steamboat Springs until Fall. Things might continue on a pace that would be considered pre-pandemic ‘normal’ after the Fall, but the interest rate changes from the Federal Reserve in the past three months will be felt in six months.
Many people are talking about a recession. A recession might bring more normalcy to some markets. For Steamboat, I’m waiting to see what happens. It seems natural that a destination like Steamboat Springs would see a drop in tourism when less discretionary money is available. Steamboat Springs could also see no change in tourism, except from those families who are less affluent.
The most likely changes in real estate values are probably seeing upper-end homes seeing larger value drops than more affordable property. As a blanket, seeing 5% or more value decrease in the Steamboat market seems unlikely without something major hitting the markets across the nation. Something that might be large enough? War. Interest rates that don’t stop rising. Weather-related problems. And a slew of stuff I can’t think of.
What I am curious about, and have few thoughts about, is rent values. Will rent become more affordable in the future? I have two thoughts right now. Those who rent in the affordable range are likely to see the market open up some with new apartments coming online in the next few months. Those families who have good jobs will continue to afford nicer apartments and hopefully buy something as the market stabilizes. Also, the short-term rental market will fluctuate, with competition now limited after the City Council’s decision, the most visible changes will be if we do have a recession and less persons are traveling.