News
ENLARGE
With the beginning of a new year, market activity in Keystone and Summit County has increased! There is renewed hope in our economy and the prospects for all real estate (especially resort real estate) is that it will once again be a solid and wise investment. However, with all the renewed interest and activity to purchase resort real estate, I am continually asked by prospective buyers: “Since prices for resort real estate are still coming down (a true statement!), why don't I just wait until they are at the bottom?”
Good question! However, sometimes we need to realize how GOOD current pricing really is AND what a great selection of properties are currently available! Here in Summit County, the market has remained relatively stable compared to other areas … and other ski resort areas! Our prices have only dropped an average of 20-25 percent, as compared to over 50-70 percent in areas like California, Florida and Nevada! Therefore, real estate in Keystone and Summit County is relatively stable compared to most areas, and actually very affordable for a ski resort area! Once reason is that prices had gone up so much in 2006 and 2007 (over 30 percent due to EXTREMELY low inventory levels at that time of 2-3 percent), sales prices had already adjusted earlier in 2008 by approx. 5-10 percent, compared to 2006 and 2007! Therefore, there were already some very good opportunities to purchase prime resort real estate currently prior to the current time!
So then you ask : “How much further could prices go down?” Another good question! Although we had been seeing more ‘vertical' price drops (looking at a pricing graph) of approx. 25 percent on average between 2008 and 2010, we are now seeing more ‘horizontal' reductions. In other words, prices in 2011 have ‘leveled off' and have only come down only about 5 percent over the past year. Part of the reason for this is that inventory levels are relatively low right now — approx. 7-8 percent of all properties in the county. To put this in perspective, we did enjoy inventory levels of 3-4 percent in 2006 and 2007 when we had 30 percent appreciation during those years. Therefore, since a 10-15 percent inventory level is usually considered a ‘normal market,' we currently have a very healthy inventory level and unless inventory levels go up much (which is doubtful given that the other economic factors seem to be headed in the ‘right direction'), there is no reason to think that prices will go down that much further. Does that make sense?
Remember, although everyone is impacted to one degree or another by this economy, we are a secondary resort market and most of our owners are professionals, executives and successful business owners who don't ‘need to sell' or ‘have to sell.' In other words, for the most part, they WANT TO SELL — when the time is right … for THEM! They can also rent out their properties (as approx. 80 percent do) to defray expenses considerably. Therefore, with no pressure from large inventories and most owners not feeling any pressure to part with their properties (and really enjoying owning AND using their resort property), there's really no reason for sellers to lower prices THAT much more! Again, does that make sense?
Therefore, if you've even been considering a resort real estate purchase, you may want to stop procrastinating! Also, with loan rates still hovering below 5 percent, how long can they remain there? If one needs a loan, money IS available … and ‘it's cheap.' One just needs to qualify for it — as it should have been before — then we wouldn't have been in this ‘mess.'
You still may be thinking, since I can get a lower price in the future, why not wait? However, MY question is: “Will there be as good of a selection of properties at ‘the bottom' and will interest rates be as low as we currently have TODAY?” That is, if you can find a property that fits your parameters, if the seller is motivated (their price is ‘pre-2005/2006' — 20-30 percent off of peak prices in 2007/2008) and if you can get an extremely low interest rate, then I would ask: “WHY NOT?”
Remember the words of Warren Buffet, probably one of the most successful investors of our time, “Be fearful when others are greedy and be greedy when others are fearful. What is likely is that the market will move higher, perhaps substantially, well before either sentiment or the economy turns up. So, if you wait for the robins, spring will be over. In short, bad news is an investor's best friend. It lets you buy a slice of America's future at a marked-down price!” His words definitely apply to Keystone and Summit County real estate, there is really ‘no better time to buy than NOW' … iF the time is right for YOU!!
Contact Craig Walsh at the Walsh Group by phone at (800) 594-1010, via email at craig@walshgroupproperties.com or just visit the website at www.KeystoneColoradoProperties.com.
Good question! However, sometimes we need to realize how GOOD current pricing really is AND what a great selection of properties are currently available! Here in Summit County, the market has remained relatively stable compared to other areas … and other ski resort areas! Our prices have only dropped an average of 20-25 percent, as compared to over 50-70 percent in areas like California, Florida and Nevada! Therefore, real estate in Keystone and Summit County is relatively stable compared to most areas, and actually very affordable for a ski resort area! Once reason is that prices had gone up so much in 2006 and 2007 (over 30 percent due to EXTREMELY low inventory levels at that time of 2-3 percent), sales prices had already adjusted earlier in 2008 by approx. 5-10 percent, compared to 2006 and 2007! Therefore, there were already some very good opportunities to purchase prime resort real estate currently prior to the current time!
So then you ask : “How much further could prices go down?” Another good question! Although we had been seeing more ‘vertical' price drops (looking at a pricing graph) of approx. 25 percent on average between 2008 and 2010, we are now seeing more ‘horizontal' reductions. In other words, prices in 2011 have ‘leveled off' and have only come down only about 5 percent over the past year. Part of the reason for this is that inventory levels are relatively low right now — approx. 7-8 percent of all properties in the county. To put this in perspective, we did enjoy inventory levels of 3-4 percent in 2006 and 2007 when we had 30 percent appreciation during those years. Therefore, since a 10-15 percent inventory level is usually considered a ‘normal market,' we currently have a very healthy inventory level and unless inventory levels go up much (which is doubtful given that the other economic factors seem to be headed in the ‘right direction'), there is no reason to think that prices will go down that much further. Does that make sense?
Remember, although everyone is impacted to one degree or another by this economy, we are a secondary resort market and most of our owners are professionals, executives and successful business owners who don't ‘need to sell' or ‘have to sell.' In other words, for the most part, they WANT TO SELL — when the time is right … for THEM! They can also rent out their properties (as approx. 80 percent do) to defray expenses considerably. Therefore, with no pressure from large inventories and most owners not feeling any pressure to part with their properties (and really enjoying owning AND using their resort property), there's really no reason for sellers to lower prices THAT much more! Again, does that make sense?
Therefore, if you've even been considering a resort real estate purchase, you may want to stop procrastinating! Also, with loan rates still hovering below 5 percent, how long can they remain there? If one needs a loan, money IS available … and ‘it's cheap.' One just needs to qualify for it — as it should have been before — then we wouldn't have been in this ‘mess.'
You still may be thinking, since I can get a lower price in the future, why not wait? However, MY question is: “Will there be as good of a selection of properties at ‘the bottom' and will interest rates be as low as we currently have TODAY?” That is, if you can find a property that fits your parameters, if the seller is motivated (their price is ‘pre-2005/2006' — 20-30 percent off of peak prices in 2007/2008) and if you can get an extremely low interest rate, then I would ask: “WHY NOT?”
Remember the words of Warren Buffet, probably one of the most successful investors of our time, “Be fearful when others are greedy and be greedy when others are fearful. What is likely is that the market will move higher, perhaps substantially, well before either sentiment or the economy turns up. So, if you wait for the robins, spring will be over. In short, bad news is an investor's best friend. It lets you buy a slice of America's future at a marked-down price!” His words definitely apply to Keystone and Summit County real estate, there is really ‘no better time to buy than NOW' … iF the time is right for YOU!!
Contact Craig Walsh at the Walsh Group by phone at (800) 594-1010, via email at craig@walshgroupproperties.com or just visit the website at www.KeystoneColoradoProperties.com.
