While double-digit price increases are likely a thing of the past, buyers need to consider some more strategic approaches to make the most of Summit County real estate
With real estate markets across the United States beginning to cool after the nearly out-of-control frenzy of the post-Covid period, buyers may wonder if the situation in mountain communities like Summit County is also starting to stabilize.
According to Debbie Nelson and Ned Walley of Silverthorne’s Nelson Walley Real Estate, the local market remains a challenging environment, but stress that a mix of flexible financing options and expert assistance can still help land the right property.
The good news for buyers, Nelson says, is that the cascading growth of prices seems to have peaked in May, though average prices are consistently up 16% over the last year. But with a steady stream of federal interest rate increases and the impact of ongoing local government restrictions on short-term rentals, Nelson notes the market has settled considerably – though there is still less than two and a half months’ worth of inventory available.
“When there’s a change in the market, we focus on educating people and letting them know how these price fluctuations are a normal part of the process,” she says. “You may have missed the boat by not buying three years ago, but we have to look historically to keep things in perspective and guide our clients on navigating our current market changes.”
As Walley explains, tighter market conditions make it all the more important to enlist local real estate professionals who have been working in the market both before and after its recent pricing peak.
“Our job is to hold people’s hands and guide them through the process. We offer our detailed analysis of what’s going on, to help our clients get the best deal.” Walley says.
Adjustable Rate Mortgages Offer A Flexible Tool
Some may associate adjustable-rate mortgages with the chaos of the 2008 economic crash, but Nelson says the ARM has become a useful tool for buyers who are interested in entering our once-again volatile market but don’t plan on holding onto their property forever.
“We encourage buyers to talk to lenders and consider the phrase, ‘marry the house, date the rate’ … and consider an ARM as a way of getting into the market until lower interest rates hit,” she says. “We’re anticipating a settling in federal interest rates in the fourth quarter of 2023, and this is a way to get into the house you love now, and figure out things later.”
Walley says that the average length of home ownership in Summit County is between six and seven years, suggesting that many buyers already use their properties as investments, or trade up for larger homes to suit their family or lifestyle needs. But with the new reality of higher interest rates and the ongoing issue of historically low inventory, buyers may need to be more flexible in their intentions.
Short-Term Rental Rulings Changing the Market
Another issue facing investment buyers is the sweeping range of restrictions local governments have or are in the process of placing on Summit County properties. “We think these policies will have an adverse effect on our economy in general,” Nelson says. “This is a resort community. Our economy is based on tourism and there simply are not enough hotels to serve tourists.” Nelson notes that a current listing of Nelson Walley Real Estate is a one-bedroom Treehouse condominium community in Wildernest which is located in unincorporated Summit County, has gone with hardly any showings by real estate professionals primarily because of the uncertainty of what the County’s final decision will be regarding short-term rentals in Wildernest.”
A nine-month-long moratorium on new licenses for short-term rentals in certain neighborhoods will be in effect until February 2023. Walley says that will continue to create roadblocks, and at the same time, benefit those who are still allowed less restricted rental policies.
“If you’re lucky enough to already own in a resort community where it’s permitted, the government has essentially given you a 10% to 20% jump in the value of your property,” Walley adds. “Helping our buyers invest wisely in the right property to meet their needs is what we do best, whether it’s in a short-term friendly neighborhood or not. Debbie and I are not just realtors but are also both seasoned real estate investors. This added perspective is yet another benefit we provide to our clients.”
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