Tom Ross

08-21-2009

Realtors in Steamboat Springs were keeping a lookout for entry-level buyers this month, as the Routt County market showed signs of a late summer upswing.

During the two-week period from Aug. 6 to 20, records on file at the Routt County Assessor’s Office reflect 20 real estate closings, not including timeshare sales.

There were some million-dollar-plus transactions, but the deals that may prove to pique the most interest of Realtors were the sale of a 650-square-foot condo on Anglers Drive for $164,900, and a Fish Creek Falls condominium for $199,500. Those are the type of sales that could be emblematic of entry-level buyers beginning to come back into the market, Realtors say. And in turn, they could set young families free to move up into single-family homes in the price points between $500,000 and $800,000.

Some Realtors report a dearth of those entry-level buyers, while others see signs that they’re back in the game.

“We need entry level, first-time buyers,” Coleman Cook, of Colorado Group Realty, told a noon gathering of the Steamboat Springs Rotary Club on Aug. 18. “All of us have buyers who want to take advantage of the current buyer’s market and trade up to single-family homes. The problem is they need to sell their Stagecoach townhome to do it.”

Cam Boyd, broker owner at Prudential Steamboat Realty, agreed that without first-time buyers to absorb entry-level townhomes and condos, it’s difficult to sell move-up, single-family homes in the middle of the residential price range.

“We have an exodus of carpenters and other construction workers,” Boyd said. “We don’t have the people coming up,” to purchase those homes.

Boyd’s colleague, Lisa Olson, said she is seeing movement at the entry level. She cites the recent sale of a Sierra View condo in Oak Creek for $169,900 as a sign that things are loosening up.

“In that lower-end market, there are people wanting to move if the price is right,” she said.

Olson stressed that with mortgage rates just above 5 percent, and the impending end of the federal tax credit of as much as $8,000 for first-time homebuyers — or homebuyers who haven’t owned in three years or more — there is a narrow window of opportunity that will close Nov. 30.

Realistically, Olson said, homebuyers need to be under contract in early October to take advantage of the tax credit.

Veteran Realtor Randall Hannaway, of Colorado Group Realty, said in 20 years, he has not seen the convergence of market factors that the Routt County market is experiencing right now.

In other years, “we’ve seen a lot of inventory and high interest rates,” Hannaway said. “Or, we see low inventory and low interest rates. But now, for the first time, I’ve seen really good  supply — a 25 percent increase in inventory, which isn’t radical, and almost historically low interest rates.”

Local values

Olson, who with partner Beth Bishop scouts out values in the current market, cites three homes that are listed for sale at discounts of 23 to 25 percent from their 2008 selling prices.

They include a three-bedroom Timber Run condo that sold for $500,000 and is currently listed for $375,000.

Similarly, there is a two-bedroom Villas at Walton Creek condo that sold for $450,000 last year and is listed for $348,000, and a four-bedroom, single-family home in Bear Creek Subdivision that sold for $775,000 and is listed at $599,000.

Realtor Michelle Garner told the Rotarians that a clear pattern has developed this summer.

“I can tell what’s going to sell before it sells based on price and comparables,” Garner said. “Properties that show the best in their price category,” are the ones that sell.

“When I see them pop out,  in a month or two, they’re sold,” she added.

Pricing within a product category to get prospective buyers in the door is essential to sales in this market, Garner emphasized.

“The (asking) price you want to arrive at is the price that will drive people into your home,” she said.

Hannaway sees another trend driving people toward mountain town purchases — the inevitable ticking of the clock.

More and more baby boomers are reaching prime second-home-buying age every year, Hannaway observed, and those who can afford to consider a purchase in a Colorado mountain town are interested in pursuing an active lifestyle — they intend to ski, hike and mountain bike for a good long while. Boomers’ own advancing ages create a sense of urgency, he said.

Now, there is pent-up urgency, and though he won’t make a prediction, Hannaway is optimistic that when the Steamboat market comes back, it may come back with “a vengeance.”

However, even more urgency for baby boomers can be created by the sight of their grandchildren growing up.

One of the primary drivers in resort purchases is a desire to gather extended families. In some cases, affluent buyers may even feel guilt about time they didn’t spend with their families while building their careers and amassing their fortunes.

The awareness that their 12-year-old grandchildren are due to become increasingly independent teenagers any day could lead resort buyers to look in places they know will appeal to adult children and willful teenagers.

Bishop said second homebuyers aren’t the only ones finding opportunity in this market.

“Teachers and nurses who haven’t been able to buy for five years are able to purchase homes now,” she said. “I helped two get their earnest money from the bank this month.”