For the first time since the beginning of the COVID-19 pandemic, the average home sale price in Summit County declined between January and March of this year. 

That’s according to a recent report from real estate company RE/MAX, which combined sales data for single-family homes and condominiums between January and March 2023 to show an overall average sale price of just over $1.3 million. 

That figure is 8% lower than it was for that same time last year, though the price is still historically high compared to the last two decades. Single-family homes sold for an average of just over $2.14 million, a 15% decrease from last year, while condos sold for an average of $813,365, an 8% increase. 

Much of that increase, however, is attributed to four sales in Breckenridge that were between $2.3 million and $3 million. Without those, condo sale prices actually decreased by 2.3%, the report states. 

The number of home sales also dropped by about 19%, and it’s taking longer for properties to sell — about 34 more days on average, according to the report. It’s a trend that’s held since the beginning of the year.

Dishon Lutz, associate broker for Real Estate of the Summit and president for the Summit Association of Realtors, said it’s too early to say if this represents the new normal for the housing market. But a slew of economic factors point to a shifting landscape, he added.

“How long will that last? It will be interesting to see,” Lutz said. “I think we may be more on the doorstep of what’s to come.”

To understand why the housing market may be unraveling from the intensity of the pandemic — when home prices reached record highs — Lutz pointed towards the factors that caused it. 

Historically low interest rates; increased disposable income; a mix of flexibility, from remote work opportunities; and restrictions from global border shutdowns that blocked international travel. 

The pandemic brought opportunities for prospective homebuyers to capitalize on these factors to absorb limited housing stock — some of which were converted into short-term rentals. But over the past year, much of that has changed. 

The United States Federal Reserve increased interest rates from a range of 0.25% and 0.50% at the start of 2022 to 4.5% and 4.75% as of February. With that, payments on mortgages climbed for new homeowners. 

Locally, more restrictions on short-term rentals were also introduced, though some, such as unincorporated Summit County’s, will not go into effect until later this year when those licenses are renewed. 

“That pressure on the consumer, I think, is impacting it, which is what the Federal Reserve intended to do,” Lutz said of interest rates, while adding that short-term rental regulations are also “creating the pressure to change our market.”

Real estate brokers in the county have questioned whether regulations, which seek to reduce the number of units that can be used as a short-term rental, will restrict movement in the housing market. Short-term rental owners who may be locked in to a lower interest rate set at pre-inflation levels, for example, may be more reluctant to sell. 

But Lutz said there is little data to support or dispute that theory, at least for now. And while the total amount of properties sold is down so far this year, listings are up, according to RE/MAX’s report.

The report shows there are currently more than 260 home listings, a 120% increase from this time last year. Of those listings, 27% are newly constructed homes. 

Though housing supply still lags behind demand, it has increased in the county over the past year. For example, December 2022 saw 109 for-sale single-family homes, up from 61 in December 2021 while inventory for townhomes and condos increased from 233 to 263. 

Most of that new construction has been concentrated in the town of Silverthorne, where 44% of its home sales from January to March were new builds, according to RE/MAX’s report. 

Silverthorne Town Manager Ryan Hyland said within the last four years new development has surged in the town, which he said has “generally been less expensive than other parts of the county.”

With investments in creating a walkable downtown that has spurred more hubs for arts and culture, town officials have “created an environment where Silverthorne is a great place on its own,” Hyland said.

But even as it woos developers and subsequent buyers, Hyland said that for every market-rate home built the town will continue to invest in workforce housing. That will come in the form of new deed-restricted homes, which cap appreciation, as well as income-based rental units such as the Smith Ranch Apartments, which are set to be completed in early 2025.

Despite the decrease in home prices, particularly for single-family homes, Lutz said values still remain incredibly high. A February report from Land Title shows that the market rate for a single-family home has increased by nearly $1 million since 2019.

“Will we ever go back? I don’t believe so,” Lutz said. “But will the economy somewhat support higher numbers, maybe so.”

Still, the added inventory and slow down in the timeline for sales will help give those who are looking to buy more time and options than they’ve had in years, Lutz said.

“That is the benefit for that local buyer, even if they aren’t seeing a complete change in pricing,” he said.