“Now is the time to buy Steamboat real estate.”
How many times have you heard a Realtor say that? Everyone's situation is different, so you won't hear that blanket statement from me even though it is true that many Steamboat properties are priced at too-good-to-pass up prices and we’ve seen the bottom of the market in several neighborhoods.
According to Tobin’s Q, a theory James Tobin wrote in the late 1960’s,it really is time to buy. James Tobin’s theory says:
Market value of company / replacement value = Tobin’s Q
So how does that relate to Steamboat real estate? When the price of Steamboat real estate is below replacement cost, stop procrastinating and buy. When real estate prices were rising, developers could build a property then resell it immediately for more than it cost to build. Everyone became a developer (or a Realtor) which lead to the building boom and bust in Steamboat Springs and across the nation.
Now the opposite is true. It’s cheaper to buy a resale home or condo than to build it from scratch, which is why only 500,000 new homes are being built in the US annually, down from 1.6M-2 M during the last years of the housing bubble.
Here in Steamboat, 200 (+/-) building permits were issued each year between 2001 and 2006. Last year, only 33 building permits were issued. The market has turned so that buyers can purchase property for less than it would cost to build—and in some cases a whole lot less.
With time, buyers who purchased property now should see nice appreciation gains once the market comes back, and history shows a rebound is inevitable.
Search all the Steamboat properties for sale here, or call us at 970.819.6372 to talk about what place is right for you.