Summit County real estate market cools off as fear of recession grows nationally
FRISCO — Summer and early fall are often the busiest times for real estate in Summit County, with the months of June through October historically carrying the highest volume of sales. But with national news predicting an economic recession paired with a downturn in Denver’s real estate market, Summit County buyers seem to have backed off.
July’s number of home sales, total sales volume and luxury home sales were all lower than July 2018, with decreases ranging from 10% to 18%.
“We’re seeing more listings, and they’re staying longer on the market, so we’re moving into this phase that sometimes is seasonal coming when people go back to school,” Summit Association of Realtors president Thomas Coolidge.
While Coolidge said this downtick in the Summit real estate market could be a seasonal fluke, he also attributed the slump to several other potential factors, including changes in the overall national economy and the real estate market in the nearby Denver metro area.
“There is a general cooling down on the economy, especially in Denver, and we’re close enough to be a bit affected by Denver’s market,” Coolidge said.
In Denver, residential housing sales went down by 2.5% for the month of July compared with July 2018. While the slowdown is smaller than here in Summit, it’s a definite shift for a market that had been booming. Denver was ranked No. 1 most competitive housing market by Forbes going into 2019.
However, Coolidge pointed out that there are several national factors at play that are giving people pause. The upcoming election, a stock market downturn and the trade situation are just a few, he said.
“People are just looking at the alternatives,” Coolidge said.
Despite growing fears nationally, Coolidge was optimistic that Colorado and Summit County won’t be as affected as the rest of the country, citing evidence that Colorado has a diversified economy.
“Over the years, as I’ve seen the downturns here and how they affected Colorado, each time Colorado became more and more resilient in learning from its mistakes,” Coolidge said.
Another feasible reason for the downturn in Summit and Denver is the possibility that prices in both areas might be reaching a ceiling.
“I think Colorado is poised to continue to grow, but on the other hand, the prices in Summit County and even Denver are very high. I think people do feel there should be a pause,” Coolidge said.
Prices can’t keep rising indefinitely, he said, and the high cost is making buyers more careful when it comes to purchasing a home.
There’s also speculation that a slowdown in Summit’s real estate market is simply because land is running out for new development. Both Coolidge and Buyer’s Resource of Summit County founder Chris Eby reported that the area is affected by the limited amount of space for new development.
“In terms of our marketplace right now, we’re very inventory starved,” Eby said. “There’s a lack of inventory to satisfy the demand of buyers, so it’s not surprising that we aren’t able to keep up with the demand.”
About 80% of the land in Summit County is public land, leaving comparatively little space for housing development. Approaching the limit of space for new developments in the county could lead to a shift in the local real estate market.
“The (development) companies are getting closer to buildout, and that’s a wildcard of where the market’s going to go,” Eby said.
Coolidge mentioned attention for new development is turning to Park County, which is much less developed than Summit. However, he acknowledged luxury homebuyers likely will still favor the Summit County area based on their interests and will find a way to build luxury houses with available land.
“We haven’t seen values go down significantly, so the inventory that’s out there, if its decent inventory, is going to get a lot of action,” Eby said.
Despite the downturn in sales, Eby still predicts a continued appreciation of the housing market in Summit County and advises buyers to get in on the market sooner rather than later.
“At this stage in the game, the best thing I can tell my buyers is I think you’ll be a lot happier if you buy now than if you’re shopping a year from now because I think the market will still keep appreciating,” Eby said.
Eby pointed out that people are still moving to Denver, which only expands the second-home market for Summit County. So, while sales are down, it doesn’t necessarily mean trouble for Summit County’s housing market, unless there is a national economic downturn.
“We’re 10 years into this cycle in Summit County of an upward trend,” Eby said. “So at some point, one knows that the cycle is going to adjust.”
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