Months ago I wrote that the Denver market is slowing down and would do so through Winter. It did slow down. Instead of having 20 offers on a property, homes stay on the market a day before getting 10 offers. In Steamboat, similar patterns are occurring. Recently, I listed and put under contract a Villas unit, on Morgan Court. I listed it at what seemed to be the current value and we received just a few offers and settled 5% over the list price.
This is the third version of this article, toning down my argument of where is the Fed and the interest rate hikes they have been hinting at? Is this more partisan politics or just a fun game of smoke and mirrors they are playing? Analysts expected a quarter-point increase in December and a total of five hikes by the end of 2022. So far, we have heard a few news items and little action until this past week when they raised rates. This came with promises of up to 11 hikes. Let’s see what happens.
In a continuing education class, our instructor made short comments about the State of Colorado is expecting an increase in foreclosures. This made no sense to me, and especially because I respect the instructor, I asked for more information on this. He said that in the first areas to see price growth slow, they expect new homeowners to get upside down in value and walk away from the properties. With the dramatic swing upwards in value, the values went too high and will come back down to what is sustainable in the market.
In a recent article that discusses a survey of 2021 homebuyers and buyers remorse, they found that millennials, which drove much of the home buying market recently, have buyers remorse ranging from purchasing too high to not getting the best mortgage rate. 64% of those surveyed said this. I think this is also partially why Colorado state is thinking about people walking away from their new purchases.
Speaking with many smart local brokers and professionals, none of us perceive much change in the Steamboat market for several months. It will take the slowing of the economic recovery to make a real difference. And it seems that this slowing will reach Steamboat Springs later than other places in Colorado and the nation.