Summit County real estate feeling impact of ‘wealth effect,’ broker says
June 18, 2018
May by the numbers
191: Total real estate sales
196: Total real estate sales (2017)
$133.6: Total value of sales
$125.4 million: Total value of sales (2017)
$6.9 million: Most expensive sale
$2.9 million: Most expensive sale (2017)
29: Sales of at least $1 million
35: Sales of at least $1 million (2017)
Source: Summit County Assessor
What a difference five years can make, said Dennis Clauer, owner Real Estate of the Summit Inc., after looking at Summit County's real estate statistics from May 2013 and comparing them to the same month this year.
For example, in May 2013, the average median listing price of a home was $309,900, while the average number of days it spent on the market was 148 days. Fast-forward five years, and the average median price is up to $386,950 while the average days on the market is down to just 22.
"Certainly, I think that's a little barometer for how quickly properties are moving relative to five years ago," the longtime real estate broker said.
In May, the volume of real estate sales was up at the same time the number of transactions remained relatively flat. The month was buoyed by a $6.9 million deal related to a new timeshare development in Breckenridge.
Rounding out the top five sales of May were three single-family homes in Breckenridge, including a $3.4 million, 5,290-square-foot house with five bedrooms and six baths, and one in Silverthorne.
Altogether, the county saw 29 real estate transactions over $1 million in May, and another 16 properties went for $900,000 or more.
For Clauer, all of this comes as a product of a strong national economy, and the most active part of the market, by far, are the homes priced in the $400,000 to $500,000 range, he added.
"Perfect case and point is Dillon Valley East and West," said Jim Roth at the Summit County Assessor's Office.
For quite a few years during the recession, Roth explained, properties in the Dillon Valley actually decreased in value. Now, when one of those homes hits the market, the seller can almost count the days before it sells on one hand.
"From looking at things, I would have to say it's continuing down the same path we've been seeing with sales prices being on the increase," Roth said of the current market conditions. Like Clauer, he too knows that homes in the more moderate price range are some of the quickest sold.
"Once we get down to, I don't want to say affordable, but homes in the lower price zones, they're going almost immediately," he said.
The Summit County Assessor's Office is fast approaching the end of its most recent two-year, data-collection period, which goes from July 1, 2016, to June 30, 2018. In all classes of residential of property across Summit County, the office is projecting "significant increases," Roth said. "More specifically, the month of May is continuing on that path."
Clauer said he believes all of this is a telltale sign of what he calls, "the wealth effect," or when the national economy is strong, consumer confidence is riding high and the stock markets are hovering at or near historic levels.
The effect on Summit's real estate, Clauer said, is that many people cashing in on the financial markets start looking to diversify their portfolios, want to invest in real estate and often gravitate toward desirable properties in resort destinations, like Summit County.
"The wealth effect is really shown in our market, but it's evident everywhere in the country when it comes to resorts," Clauer said.
Furthermore, the local real estate market continues to be defined by scarcity, as a lack of available inventory is driving up prices and bringing down the average number of days a home spends on the market.
As of June 7, there were 643 active listing, according to the Land Title Guarantee Company of Summit County, including 451 for residential units and 192 for vacant land. The county has seen a steady uptick in the number of active listings since February when there were 462.
It's not uncommon for a surge in spring listings, with the majority of real estate sales typically happening in summer months, but the availability of housing in Summit remains at historic lows, especially compared to years during and after the recession.
Asked to predict what this summer might bring, Clauer said it's shaping up like another strong summer.
"I think values will continue to rise," he said, adding that buyers in Summit County "seem ready, willing and able to spend more money on a higher-end property than ever before."
In fact, he just closed a deal in April worth more than $3 million for a luxury home in the high-dollar Highlands at Breckenridge neighborhood. Within the high-end housing market, Clauer's seeing buyers willing to spend more, especially if it means better finishes, newer technology and more modern floor plans and design.
"That's the demand that's out there," He said of the luxury housing market. "People are really looking for the finish, fit, technology and design. All of those boxes are getting checked by the high-end buyer."