Home market picking up after market tumble
SUMMIT COUNTY – With a volatile stock market taking unpredictable turns recently, investors are headed to real estate offices.
“We’re seeing more people reinvesting what little remains from their stock portfolios – especially in resort communities,” said Andrew Biggins, president of the Summit County Association of Realtors. “People are thinking of diversifying and not putting it all in the stock market.”
Activity has picked up particularly in the last two weeks, he said, with professionals and local residents doing most of the buying.
There’s plenty out there, too.
According to the Multiple Listing System, there were 567 single-family homes, 1,646 duplexes, condos, triplexes and townhome units and 626 vacant lots for sale in Summit County as of Monday – not including those homes for sale by owner.
Home sales escalated throughout the 1990s but began to flatten out last year as the national economy softened. Homeowners – particularly those with second homes – put their homes on the market. And when the stock market began its tumble this summer, some investors began to think about diversifying their portfolios to include real estate.
“A lot of properties are on the market,” Biggins said. “We’ve had a tough time in the real estate industry. First we were hit by the dot-com crash, then Sept. 11, then we had the fires – people called to cancel their visits, saying they never knew their house could burn down. Then we had the Enron bookkeeping scandals. People kept putting properties up for sale, and they weren’t selling.”
But Realtors may be seeing the light at the end of the tunnel.
Rick Bunchman of Coldwell Banker Bunchman Real Estate in Breckenridge said he’s had several potential buyers looking to diversify their investment portfolios to include real estate.
This year, 18 homes have sold for more than $1 million apiece.
“It’s definitely a buyer’s market,” Biggins said. “We’ve never seen this much inventory for sale.”
Currently, there are 147 properties listed for $1 million or more. Of those, 37 are listed for $2 million or more, and eight are listed for more than $3 million. The most expensive asking price for a home in Summit County is $4.7 million ,for a home at Summerwood, overlooking Lake Dillon between Summit Cove and Dillon, Biggins said.
“It’s a tremendously saturated market,” Biggins said.
Home prices haven’t dipped much. Over the past decade, homes have appreciated an average of 8 percent a year, Biggins said. The last 24 months, however, that’s been closer to zero percent.
A residential unit typically sits on the market for 200 days, he added, because 70 percent of sales in Summit County are made to people who intend to use the residence as a second home. Often, the would-be buyer visits Summit County in the winter but doesn’t have time to look at houses. They then return in the summer. Seventy percent of units sold are sold in the summer, Biggins said.
The primary market – those looking for a house in which to live year-round – move a bit faster.
“Those people are committed to moving and buying,” Biggins said.
Biggins said he doesn’t know what the average asking or selling price is for homes in the county because county officials eliminated a half-time statistician’s position at the end of last year. The Realtors’ board is working to obtain the information on a regular basis again.
Condos and rental-income units are selling best, said Bob Kieber, vice-president of United National Mortgage in Silverthorne. And the most popular purchases are second, rather than primary, homes, most in the $150,000 to $400,000 range.
“The potential first-time home buyers can’t qualify to buy a tent,” he said. “They don’t have enough for a down payment, or, if they have a credit history, it’s generally pretty lousy.”
Additionally, people are borrowing more, in part because interest rates are so low – many 30-year fixed loans hover around 6 percent – but also because they can’t afford to put down larger sums after losing money in the stock market.
“Most of the prices have leveled off and are rebounding,” Kieber said. “I wouldn’t wait too long to buy.”
Jane Stebbins can be reached at (970) 668-3998 ext. 228 or email@example.com.
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