The past year has seen an unprecedented period in Summit County real estate history, with skyrocketing prices and a flurry of local and national buyers scrambling to capture the limited available inventory. And with the first hints of a recession now on the national horizon, many sellers are wondering if this is the right time to cash in on the momentum, before circumstances change.
Debbie Nelson, broker-owner with Nelson Walley Real Estate, suggests that circumstances have indeed changed in recent months, with the gold rush-styled surge in mountain property sales finally taking a breather.
“We saw an incredible buyers’ frenzy from June until about mid-March – every property got multiple offers and prices were all way over list, based on less than 75 total properties on the market,” she says. “Buyers were rushing to purchase, but that has completely changed. We’re now headed back to market conditions more like what they were, pre-COVID.”
Ned Walley, broker-owner, says he believes there are still great opportunities for those who’ve carefully held onto a property and may have concerns about the changing financial climate, fluctuations in the stock market and the impact of rising interest rates.
“It’s still a sellers’ market, but things are returning to it being a normal pre-COVID sellers’ market, and we’re seeing the super hyper activity of the last 18 months tapering a bit,” he says. “We now have to remind people that, even on under-$2 million sales, it may take four to six weeks to sell a home, not the three days it has been this past winter.”
Still, prices continue to rise
Despite that normalization in the market, Nelson says both she and Walley believe that local real estate prices will increase considerably this year, even with smaller inventories, and even as the market begins to cool in other parts of the country with some early talk of recession and a recent increase in interest rates.
“The basics of supply and demand are at play here. When we had a more balanced market, back in 2014 and 2015, we had 1,200 to 1,500 properties for sale. Now we have less than 20% of that,” she says. “In order to reach a more balanced market, we’re going to need to be closer to 1,750 active properties, since Summit County has become a bit of an extension of the Denver market, with so many people from the Front Range making this their primary residence.”
That market equalization, Walley says, has also meant ever-increasing prices.
“If you look at Land Title figures, the number of transactions is down, but the monetary volume is up,” he adds. “They’re balancing each other out. I believe we’ll have a total market value close to what we had in 2021, but with 1/3 fewer transactions.”
Our unique circumstances, they suggest, mean that sellers still have great opportunities to get record prices for their properties, but shouldn’t feel like the clock is ticking. And they also need to be realistic about finding a replacement for their current home, unless they plan on leaving the County or State, as low inventories are the same almost everywhere in the entire Rocky Mountain West.
“We have plenty of clients who’d love to sell but still want to own a mountain property,” Nelson says. “The first thing we have to ask them is, ‘where are you going? You may have to leave this market entirely.’ So sometimes we have to ask clients to stop and think.”
Walley said the entire situation helps illustrate the benefits of working with a localized real estate team that has deep, long-standing roots in the county.
“If anything, I’d say we’re just going back to a climate where sellers can be strategic and thoughtful,” he says. “It’s still a fantastic time to sell, and values continue going up. If you really are considering selling, reach out to us as we hate leaving money on the table in any transaction. We can help people strategize – should they sell now, or wait 12 months?”
Nelson says she and Walley do not believe that rising interest rates will negatively impact our market very much, though they will have a major impact on many buyers’ overall buying potential, considering that 44% of Summit County transactions were cash.
“However, we do feel that the declining stock market could have an adverse effect on our market – as many people pull money from the stock market to purchase Summit County properties,” she adds. “We’ll have to wait to see what the stock market does and how that may affect real estate sales.”