An all-time high demand for properties is transforming Summit County real estate
Post-pandemic interest in county homes shows no signs of slowing
Brought to you by Nelson Walley Real Estate
These are unprecedented times in the American real estate market, with post-pandemic prices continuing to spike and demand continuing to outpace supply in most of the country’s major centers. And as we have seen for the past year in Colorado, the situation is even more unbelievable, with record prices and transaction business that’s never been seen before.
The scale – and the hyperbole attached – may have some buyers (and potential sellers) wondering if a peak is on its way, and if they should be concerned about what seems like too much of a good thing in resort property sales.
Debbie Nelson, owner/broker at Nelson Walley Real Estate, urges interested parties to take a deep breath and consider some of the realities of the current market. And, especially for potential sellers, if this seems like a golden opportunity to maximize on the extremely high demand for inventory, it might be an ideal time to talk to a well-established real estate professional with deep local ties to the Summit County community.
“We still have incredibly low inventory and prices continue to rise,” she said. “But we are not in a bubble. Supply just isn’t meeting demand.”
Summit County remains a huge draw for urbanites
As has been the case since about this time last year, Colorado’s mountain communities have become some of the most in-demand real estate markets in the nation – as urbanites have continued to seek out a more laid-back and family-friendly environment.
And with remote work arrangements looking like a permanent opportunity for many American employees, the desire for a home in an environment that offers the equivalent of a year-round vacation for big-city or coastal folks means things are very, very tight, Nelson explained.
“We currently have 1.5 months of inventory for all residential property in the county, and just 1.3 months of inventory for residential property under $1.5 million,” she said. “Remember that six months’ worth of inventory is a balanced market.”
Inventory shortfall is driving demand, prices
The situation, Nelson said, is unlike anything she’s ever seen in her decades serving the community.
“In the past 12 months, there were 3,166 residential sales in Summit County,” she noted. “To achieve that six-month balanced market, we would need 1,584 residential properties on the market. And to get a six-month inventory of properties $1.5 million and under, we’d need 1,382 properties. We currently have 154. That’s entirely new territory for us.”
It’s also created what might be the ultimate seller’s market in Summit County history, and Nelson said the blazing speed of properties being offered and then immediately snapped up is changing the local real estate playbooks.
May 2021 saw prices again at all-time record levels, with across-the-board average sales prices for homes in the county reaching $954,160. Multi-family homes averaged $774,577, and single family homes reached a nearly unbelievable $1,743,878 average – a situation that would have seemed impossible just three years ago.
Those record prices mean that the price per square foot for single family homes spiked at $553 at the end of May, and $645 per square foot for multi-family homes.
Nelson said the pace of sales is also creating huge competition, as buyers’ enthusiasm shows few signs of slowing.
“The average days on market in May was just 18 days for all residential properties,” she said.
Advice for navigating a runaway market
Ned Walley, Nelson’s co-owner/broker, said that these slightly bewildering circumstances absolutely call for trusted, local professionals – whether that be navigating the market to find a great deal for a buyer, or spending the time working out the numbers and taking the proper steps for those who see this as the time to sell.
“Our phone continues to ring off the hook, and that’s the market talking to us,” Walley said. “Word is certainly getting around.”
An overexcited market also makes it absolutely crucial to work with a real estate team that understands the mixture of timing and the value of properly marketing and staging a property to provide the maximum profit for sellers. Occasionally, he said, sellers also simply can’t believe what demand and rising prices will mean for them, especially if they’d had cold feet in the past about testing out the market.
“We had a recent listing appointment and we got along very well – we told them the real value of their home, and they liked what they heard,” he said. “They told us that’s not what the other companies had told them, and they were a bit hesitant. But they took a leap of faith with us, and it worked out well.”
Both Nelson and Walley emphasized the importance of a savvy pricing strategy to find success in the current conditions.
“We know that there is a fine line when pricing a property,” Nelson said. “The value needs to be high enough so that we don’t leave money on the table for our sellers, but low enough to still draw enough interest to receive multiple buyers.”
The firm is confident in their pricing strategy, and data from the past year supports that assessment.
“Our Sales Price to List Price percentage for all 44 listings we sold in the past 12 months is 99.25%,” Walley said. “And keep in mind a few of those previous 12 months were during the short-lived COVID related drop in values. Even with us pushing the market in the last few months, the firm’s Sales Price to List Price over the past six months is 101.3%.”
As values for homes in Summit County continue to rise, Nelson and Walley said they plan to continue working with their sellers to help them understand what’s possible in the current marketplace and feel confident about the recommended price for their home.
“The biggest challenge now, with single-family homes value increasing 3% per month so far in 2021 is convincing sellers that our proposed values are indeed correct,” Walley said.
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