Although the Summit County real estate market performed well in Q3, buyers are starting to be skeptical of new short-term rental programs.
It’s clear as day: The Summit County real estate market is still going strong. When looking at the average price per square foot, average transaction price, monthly sales volume, and number of sales for properties $ 1 million and over, the community real estate market is still trending.
But below the surface, realtors are starting to have conversations with buyers about the community’s short-term rental programs and regulations. Some fear that what happens in the future will impact the market next quarter or next year.
Despite everything, the third quarter of the local industry performed well in all respects. Dana Cottrell, former chair of the board of directors of Summit Realtors and broker of the Summit Resort Group, said that July, August and September are historically among the busiest months of the year, mainly because it is at this time. – where many agents are closing the deals they sent out weeks ago. . At the end of September, agents usually don’t close as many deals, but this year some are singing a different tune.
“What I see is that we are doing a lot of deals, that our number of sales is still quite large,” Cottrell said.
Based on the month of July from Land Title Guarantee Co., August and september reports, the county’s real estate industry has had approximately 784 transactions amounting to over $ 857 million in monetary volume. Each month also showed an increase in the average price per square foot. In July, that was equivalent to $ 675. It was $ 694 in August and $ 700 in September.
Homes costing $ 1 million or more make up the majority of inventory, and this held up for the quarter. In July, this inventory represented about 65% of sales. It accounted for 68% of sales in August and about 65% of sales in September.
Those doubting the market should also take a look at the average price of a resale family home. In July, the average price was around $ 1.64 million and it jumped almost 11% to almost $ 1.81 million in August. In September, it edged up to almost $ 1.83 million.
Even still, it’s difficult to get the big picture of the market without considering what’s going on with the community’s short-term rental market. Breckenridge recently passed a cap on non-exempt short-term rentals that takes effect Nov. 2, Summit County approved a temporary moratorium on short-term rentals while it reviews its vacation rental program, and d he other cities are following in the footsteps of other programs.
All of these discussions, especially what’s going on in Breckenridge and unincorporated Summit County, have buyers and realtors skeptical about the impact of these programs on the local real estate market. According to Land Title reports for the third quarter, on average 77% of buyers are from the Front Range and out of state, which means a good chunk of these properties are likely being purchased as second homes.
Allison Simson, owner and broker of The Summit Real Estate Team, said the programs have caused a lot of uncertainty among buyers and some buyers have waited to proceed with the purchase of a property until the regulations. is in force. Simson said she worked primarily in unincorporated Summit County neighborhoods, such as Wildernest and Dillon Valley, both of which will be affected by the new county rules.
“That’s a lot of people from the Front Range,” Simson said. “… And they want to buy their second home here, and they rely on the rentals to offset the payment. I would say rental income is useful, but it certainly won’t cover all of your expenses. (But) how does that affect them? It’s like any property rights that are taken away from you.
Cottrell said it has seen sellers wanting to put their properties on the market before the Breckenridge order goes into effect so that buyers who want to buy and rent their properties have time to do so. Right now, she said she was answering many questions about what these programs will look like once implemented.
“We just don’t have those answers yet,” Cottrell said. “The discussions created this air of concern between buyers and sellers. I wonder if there isn’t a little bit of, ‘Oh, let me sell this before we have these changes; the market is good and whoever buys it can always do whatever he wants with his property.
In general, Simson and Cottrell said they expect sales to remain strong despite many uncertainties about the impact of these rules on the local market.