Data: Deed-restricted homes weather housing bust
June 13, 2011
While single-family homes in Summit County have declined in value the last few years, deed-restricted homes have seen an average annual appreciation rate of 2.5 percent.
“In Frisco, Copper, Breckenridge, Silverthorne and unincorporated Summit County, single-family home values have declined 21.6 percent,” said Summit County Assessor Beverly Breakstone. “Yet people are not seeing declines in the single-family homes located in deed-restricted neighborhoods, which is truly exceptional.”
Breakstone said the last time property values went down in Summit County was in 1989. Since then values had been increasing between 2 and 35 percent, depending on the year.
Because of the nature of deed-restricted homes, owners did not see the same dramatic increases as open-market homes during boom times. But, Breakstone said that means they’re not going to see the same dramatic decreases when the markets go down.
“(Deed-restricted homes) saw gains, but not at the open market level,” she said. “In a year like this when single-family go down 21 percent on average, (deed-restricted houses) don’t see that. They could still be going up because they’re catching some of the slow-growing gains. They’re still a little bit behind.”
Breakstone said if open-market home values go down again in 2012 and 2013, deed-restricted values may still go up again because they’re still behind that large open-market growth curve.
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“We’ve always maintained that deed restricted homes are a safer investment than unrestricted market homes,” said David O’Neil, developer of Frisco’s Peak One Neighborhood and Breckenridge’s Wellington Neighborhood – both of which are largely comprised of deed-restricted housing for locals. “We have real people, buying real homes with real dollars. As a result, it is a very stable market.”
Courtney Kenady has been sales and marketing director at Wellington for the last 10 years. She said demand has remained solid through the recession.
“Currently, the Wellington Neighborhood has only two deed-restricted single-family ‘re-sales’ for sale,” she said. “A big part of this is that we have had no foreclosures.”
Breakstone said because there are so many wealthy owners buying in Summit County – often in the second-home market – market value is usually pushed up.
“There’s a lot of value in getting into something that’s set at a level accommodating income levels set by the adjusted median income,” she said of the deed-restricted homes. “It makes sense to have units where the growth in value is restricted so people can continue to buy them.”
The data comes from the Summit County assessor’s office data study period, which ran from June 2008 through June 2010.
Breakstone said she’s hoping for a leveling of values by the end of the current data-collection period, which ends in 2012, because she doesn’t want to see entities reliant on property taxes – like schools or fire departments – have to cut their budgets.