$12 million Home Depot land purchase in Silverthorne the year’s biggest real estate deal
January 17, 2015
The Summit County real estate market is back and more bullish than ever.
Or at least it's more enticing than it has been for the past six years. When the 2007 housing crisis and ensuing recession put a damper on real estate across the country, Colorado resort markets like Summit and Eagle counties saw a major dip in sales. The worst came in 2009, when property values plummeted and construction projects halted.
By 2014, Summit County brokers and contractors welcomed a noticeable uptick in activity across the county. There was a $12.2 million property sold to Home Depot in Silverthorne, 32 transactions worth at least $2 million and a $7.1 million opening day for the newest timeshare in Breckenridge, the Grand Colorado on Peak 8.
In Breckenridge, Summit's most expensive town, the Slifer, Smith and Frampton office at 117 Main St. found that the average price per square foot for residential properties rose from $300 in 2009 to $339, leading to 1,606 residential transactions — up from 917 in 2009.
Brokers like Joan Moats expect more of the same in 2015.
"It's been a gradual climb out for the market, but as long as it's trending upwards, we feel as though that's a good sign," said Moats, a broker based at the Breckenridge office. "In my opinion, it's better that those numbers climb gradually. Otherwise, you're really seeing the bubble effect."
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On the rebound
After poring over the numbers from 2014, Moats and other local brokers say the real estate market is healthy, and healthy in a way it hasn't been since before the housing bubble. She points to price per square foot, which has climbed 9 percent since 2009 and is often an indicator of renewed client interest.
According to brokers at several local offices, the recovering U.S. economy also has played a major role in the real estate resurgence. Take the numbers for perspective: In March 2009, the Dow Jones Industrial Average closed at an all-time low of 6,443.27. By March 2014, it had soared to 16,422.
And, of course, two seasons of decent snowfall never hurts an alpine market.
"Lending has gotten better," Moats says. "More deals are closing, and even though there could be some kind of hiccup, I think we will continue on an upward trend. Again, we're snow-driven. Even looking back to the '80s the market improves with good snow."
For Kevin Smits, the owner and managing partner for The Smits Team in Frisco, second-home owners showed renewed interest in buying — and keeping — the county's priciest properties. This led to lower volumes and higher demand for the first time in at least six years, which again comes back to the recent recession.
"People who own second homes are keeping them," Smits says. "They're not recycling them as they would have and a lot of that is because people bought at the height of the market, and the market hasn't increased to the point they can get out of it what they put in."
Smits' office had a record year in 2014, spurred in part by increased demand for properties in the $800,000 to $1 million range. His office recorded 150 transactions last year, up from 129 in 2013, and he predicts his brokers will close on 250 transactions this year.
"I think we'll see an increase in volume over 2014," Smits says. "Banks, I think, are starting to loosen up again. They're lending money again, and they're starting to lend on spec homes again."
Across Summit County, single-family homes in the $400,000 range are historically popular, and both Moats and Smits said 2014 was no different. A total of 803 single-family homes sold in 2014, with more than half located in Breckenridge, according to the Summit County Assessor.
"We're definitely selling a lifestyle here, and I think people are back to playing as long as the weather cooperates," Moats said. "We're a little investor driven here, but we're more about the experience. If you can buy a piece of Breckenridge, that's a very attractive perk."
Along with single-family homes, condominiums did well last year, particularly in the booming Frisco real estate market. Of 1,802 total condo sales across the county, 180 were within town limits, but that represents an 11 percent jump over the county valuation period between May 2013 and May 2014 — the steepest increase for any town.
Tough rental market
While home and condo sales are on the rise, Smits said the rental market is one of the worst he's ever seen. He can't quite pin down the cause, but he believes it's driven by a number of factors, from lower property volumes to a shift in resident attitudes.
"This has been the hardest year I've ever seen," says Smits, who moved to Summit County in the '80s to be a ski bum. "I think we're starting to see less of the migratory ski worker than we did before. People are coming out here, staying here, and we're starting to see less of a shoulder season. It's like the reduced inventory we see for the sale market."
Along with a tight rental market, Smit and Moats both noticed that more clients are purchasing with cash. Yet Brooke Roberts with the Land Title Guarantee Co. in Breckenridge says the proportion is in line with the past few years, with cash-based transactions making up 38 to 40 percent of total sales.