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Summit County Colorado real estate update

By
Real Estate Agent with Coldwell Banker Colorado Rockies Real Estate

Our Summit County, Colorado real estate market continues to be strong.  It is a topic of conversation everywhere I go these days.  A couple of days ago I met with some Realtor friends for lunch and some client friends for dinner, and the market conditions were discussed in both places. 

When the rest of the country is in a slump with no real signs of any upward swing yet, and the mortgage market in the mess it is in, people assume that our market is also down.  That is not the case!  market analysis

Why would Summit County, not be affected?  In my opinion there are several reasons.  Of course they are generalizations, but tend to be true for most of my clients.

  • Baby boomers are the prime buyers of second homes.  They are pretty insulated from the economy.  Boomers are in their highest earning years, are close to retirement and they have been saving money  most of their lives. They have benefited from the increase in stock prices over time.
  • Baby boomers know that current interest rates of 6.5 to 7% are still good rates.  They have seen 10 or 11% or more, and have the history behind them to know these rates are low.  They are willing to take out fixed rate loans and so did not see the cost increases that affected others so negatively as adjustable rate loans adjusted up. 
  • Baby boomers did not refinance in order to roll in other debt.  They look at their homes as a savings account while younger people tend to look on their homes as a checking account, taking out equity for purchases of boats, jet skis and other items they "need".  Our tax code has encouraged it by having interest paid on a mortgage be deductible while interest on a loan for a boat or car is not.  People who borrowed against their homes until they owe more than it is now worth are some of the people in foreclosure.  As the price of homes has declined and the market has slowed, they are not able sell them to get out of debt.   
  • Our inventory levels of property are low, with many areas approaching build out and fewer new properties being built.  It is the law of supply and demand, with less supply and more demand driving up prices.  Here, if someone has financial problems, they are usually able to sell their home and perhaps break even as it would have appreciated since they bought it. 

Yes our market is strong, but I think we are a bit overbuilt in the $1,000,000+ category.  In that price range, we have enough inventory for a couple of years of sales, and I am seeing people come off their optimistic prices they set early in the summer.  Also, jumbo mortgage interest rates have jumped dramatically.  That is probably temporary and they will come back down soon.  Many of our high end buyers pay cash.  Lower price ranges (under $600,000) are as strong as ever, and we are seeing multiple offers when we are lucky enough to find good property under $450,000.  It is an interesting time, and it remains to be seen if  the softness in the real estate market in the  rest of the country will affect our prices here.  I will keep you updated as I get a personal perspective on it!

The statistics are courtesy of Land Title Guarantee Company. 

Comments (17)

Mana Tulberg
805 County Real Estate - Camarillo, CA
Real Estate Agent - Camarillo CA
Joanne, you should add that Summit County is a beautiful and breathtaking place to live. The facts that you have stated about baby boomers are so true.
Sep 11, 2007 05:10 PM
Lynda Eisenmann
Preferred Home Brokers - Brea, CA
Broker Associate ,CRS,GRI,SRES, Brea,CA, Orange Co

Hi Joanne,

Nice to hear your Colorado real estate market is still going strong. Every now and then I read about an area that is the exception like yours.

Sep 11, 2007 05:29 PM
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate
Joanne, as a baby boomer, you hit the nail on the head, we do see rates still low at 6-7%. My first house was at 13%, the second was at 11%. The Gen X and Gen Y, have no perspective. Nice to hear you inventory is still low.
Sep 11, 2007 11:11 PM
Dena Stevens
Rocky Mountain Realty - Canon City, CO
Putting The Real Into Realtor Since 2004
The key to success in my mind, is stop looking at the newspapers and turn the radio off. People shouldn't buy into all the media. (It's like when you hear the price of gas is going to go way up tomorrow because geese are flying south. What do people do? They line up and the gas station.) Anyway.......let's keep the ball rolling!
Sep 12, 2007 12:41 AM
Joanne Hanson
Coldwell Banker Colorado Rockies Real Estate - Frisco, CO
Summit County, Colorado Realtor

Mana, you made me realize this is one of my few posts without photographs!  I don't do that very often.

Lynda, we never seem to follow the market; we are always a bit contrarian it seems.  When the rest of the country was booming a few years ago, we had about 5% appreciation a year, so there is no telling. 

Missy, I think the younger people remember 5% a few years ago and think that should be the norm, but historically, rates that low are really unusual.  Rates today are great!

Dena, I agree.  The  media is always looking for a way to spin the information (usually negatively) and then people believe what they have to say and act accordingly.

Sep 12, 2007 01:18 AM
Stephanie Edwards-Musa
thredUP.com - The Woodlands, TX
knitwit at thred UP
Joanne,  Great information on Summit County's market. 
Sep 12, 2007 12:15 PM
Joanne Hanson
Coldwell Banker Colorado Rockies Real Estate - Frisco, CO
Summit County, Colorado Realtor
Thanks Stephanie.  It is nice to be in a good market, I must say!
Sep 12, 2007 01:17 PM
Chris Liverett
Associated Brokers Of Pagosa - Pagosa Springs, CO
Pagosa Springs Real Estate
Great outlook for your market. It's good to know that your inventory is still low. Ours is suffering a little, but I am confident that it is short term. We see the same buyers on a smaller scale than you do on the corridor. We are seeing a good number of Fall buyers coming in to support that. I could not agree with you "boomer" perspective more!
Sep 12, 2007 02:09 PM
Rita Taylor
None - Sanford, NC
Sanford NC Real Estate - Homes for Sale in Sanford North Carolina

Joanne,

It is great to see that your market in Summit County is doing well.  My mother-in-law worked in real estate in the early 80s and has some interesting stories about double digit interest rates.  I am looking forward to snow reports in a few weeks!    

Sep 12, 2007 04:17 PM
Joanne Hanson
Coldwell Banker Colorado Rockies Real Estate - Frisco, CO
Summit County, Colorado Realtor

Chris, it is nice to have Boomers as clients, isn't it? 

Rita, you can be sure that you will get snow reports, complete with photographs!

Sep 12, 2007 04:55 PM
Jason Adams
Coldwell Banker Colorado Rockies Real Estate - Dillon, CO
Realtor - Summit County, Colorado
Nice post on the market. Lets just hope it stays that way.
Sep 13, 2007 11:02 AM
Paula Henry
Home to Indy Team @ HomeSmart Realty Group - Avon, IN
Realtor - Indianapolis Real Estate - 317-605-4174
Joanne - The markets around the country with vacation and second home buyers do seem to be doing well. Keep it up. Summit County sounds like the perfect place for a second home!
Sep 13, 2007 01:22 PM
Joanne Hanson
Coldwell Banker Colorado Rockies Real Estate - Frisco, CO
Summit County, Colorado Realtor

Jason, I have my fingers crossed!

Paula, I heard today that Jackson Hole was doing very well, and I know most of the other resort areas are too. 

Sep 13, 2007 02:02 PM
Susie Roscoe
Signature Realty Associates - Brandon, FL
Real Estate Specialist | Brandon, FL
Great news to hear your Summitt County market is doing so well!!  I bet sellers are LOVING THAT NEWS!!
Sep 18, 2007 10:34 PM
Joanne Hanson
Coldwell Banker Colorado Rockies Real Estate - Frisco, CO
Summit County, Colorado Realtor
Susie, I think I am beginning to see just a little softening, mostly because people are nervous about the national economy, but we will see!
Sep 20, 2007 04:21 PM
Joan Snodgrass
Midamerica Referral Network - Kimberling City, MO

Good points Joanne:  Gives me food for thought about some recent sales I've had with younger buyers of 2nd homes - and yes - they are using the escrow on their homes to buy property here.

 

Sep 28, 2007 10:20 AM
Joanne Hanson
Coldwell Banker Colorado Rockies Real Estate - Frisco, CO
Summit County, Colorado Realtor

Hi Joan,

People are now pretty aware of the dangers of over mortgaging, and will have trouble finding anyone to do it anyway.  But it did get lots of people in trouble!

Sep 28, 2007 10:28 AM