A breakdown of October's Real Estate Market Summary by Shanna Lalley.
Whew! What a whirlwind summer! It was inevitable that our real estate market would recover. Youll notice I didnt say is recovering or when we recover. Based on an unscientific survey of REALTORS in my office, we think we are 6 - 8 months into recovery territory. 6 - 8 months? Hmmm, I was just reading an e-newsletter from a Denver Broker who I respect and he commented that the Metro Denver area is 3 3.5 YEARS into their real estate recovery. So, why the big difference?
From 2008 to 2011 the Winter Park and Fraser areas had a lot of new construction projects just getting ready for closing. Fraser Crossing & Founders Point condos, at the base of Winter Park Resort, closed 208 new units. 156 of them closed in 2008 and another 38 in 2009. Those buyers had been under contract, at high pre-construction pricing, since 2006 andwere required to close or forfeit their earnest money. Rendezvous had about 40 new-construction townhomes and cabins under contract when the stock market crashed. And Sterling Point condos in Fraser had 22 condos under contract. These closings that occurred late into the national recession helped stave off the real estate market crash in the Winter Park area. Additionally, the closing prices of the new construction units helped to keep resale prices inflated. After early 2011, when the new construction units in the Winter Park area were all closed, the median priced condo dropped from about $240k to $170k by mid-2012.
The low point in the Winter Park area real estate market coincided with the start of the recovery in the Metro Denver area. For the past 3 3.5 years, Metro area residents who were feeling house poor have finally gotten their financial feet solidly under them. Those families that were wanting to move up/down in the Metro were able to do so and their equity was growing at the 2nd fastest rate in the country. This financial comfort has translated into disposable income which has made want-to-be second home owners feel confident in making that purchase.
Why do I keep referring to the Denver market? According to Realtor.com, Denver has the #1 hottest US real estate market in the country (Boulder is #13). We are the closest major resort area to Denver (70 miles)and we tend to follow their real estate trends as a great number of our 2nd home residents come from the Greater Denver/Boulder/I-25 Corridor/Front Range area.
Metro Denver is on track to add 51 thousandnew residents in 2015 (that is just under 1000 people/week). Given Denvers current growth it is no wonder that demand for mountain resort properties is back on. One of the best signs that we are on a growth track is that first-time second home buyers have re-entered the market. These are the buyers who purchase the entry-level condos that have been sitting on the market for a couple of years. In the past 12-24 months a seller was lucky to give away smaller, older condos. For the first time since the recession those condos have been absorbed and prices have firmed up. In the 12 months prior to the first-time second homeowner jumping into the market we saw the mid-market property owners start to buy up. It has been a long time since those second homeowners have felt comfortable enough to take on a larger property.
The real estate recovery lag in Winter Park has put us in the middle of the perfect storm for second home buying. Inventory is tight which is putting upward pressure on prices. However, so far, price increases are minimal. For the first time in 6 years we are seeing some multiple offers on properties and some full price sales. Thankfully we dont have the over bidding situation that Denver does.
Our advice is to start looking now & get familiar with the type of property you can purchase in your price point. Then have one of our experienced REALTORs set you up to receive automatic listing alerts. When you see a property come on the market that you like, dont hesitate to quickly make a strong offer. If you have done your homework and looked at properties as theyve become available, when the right property comes along you will know it.
Shanna Lalley is a Real Estate professional working for Real Estate of Winter Park.