Wow! Last week's Market Insights column was very popular. The title was “When will prices go up?” (read the article at www.summitdaily.com and in the upper right, search for “market insights”). Here is what I heard from readers over the past week: “Tell us more.” It seems there are a lot of people who want to be able to figure out where the market is going.

So, with the strong desire to learn more about when prices will rise, I have compiled this list of the seven signs that indicate a recovery might be coming to Summit County real estate.

1. Solid recovery of markets across the U.S.

This was explained in the last issue with the fly fishing analogy. In a nutshell, you can expect the market here to rebound after the rest of the country.

2. Major developers break ground

And what do I mean by “major developers?” The 800-pound gorillas, and in our market, the most dominate one is Vail Resorts.

3. Inventory balances out

The amount of inventory varies dramatically based on the segment of the market. Here are two examples I sent clients in the past week. Condos in Breckenridge near the ski slopes priced under $250,000: There are about two years of inventory. At the other end of the spectrum are homes priced over $3,000,000 in Breckenridge. One sold in the past year, and there are 17 on the market, which means, in theory, 17 years of inventory. Based on my involvement as a resort & second home specialist of the National Association of Realtors, a balanced market is around six months of inventory.

4. Few, if any, bank-owned or short sales on the market

As I wrote about in the Jan. 7 Market Insights article, distressed properties appear to be on the decline.

5. Shadow inventory dissipates

Shadow inventory is a term Realtors like to use which refers to the properties that are not on the market, yet the owners want to sell. In most cases, these sellers are waiting “in the shadow of the market,” and once prices look like they will go up, these people jump on the market. I was quoted in a national real estate magazine on this subject this month. For more info, email me and I'll send you the article, which explains shadow inventory in detail.

6. Volume of transactions increases substantially

History shows us that usually when there is a strong increase in the number of properties selling, this precedes prices going up. Makes sense to me. If more properties are selling, that means there are more buyers in the market.

7. Prices increase

This the last sign for a reason. I expect to see most of the other signs take place before we see price appreciation. Too many people wait to see prices going up. To be ahead of the pack, look for the other signs.

Market insight for the week

To know when the market is recovering, just keep reading Market Insights. I'll keep you informed.

Daniel Webster Johnson looks forward to your comments and feedback. He is a broker associate at Resort Brokers Real Estate in Breckenridge. Contact him at (970) 393-3300 or Daniel@YourMountainBroker.com.