It’s clear as day: Summit County’s real estate market is still going strong. When looking at the average price per square foot, the average transaction price, monthly sales volume and how many sales were for properties $1 million and up, the community real estate market is still hot.
But beneath the surface, real estate agents are starting to have conversations with buyers about the community’s short-term rental programs and regulations. It’s got some worried that what happens in the future could impact the market next quarter or next year.
Even still, the local industry’s third quarter performed well by all accounts. Dana Cottrell, former board president of Summit Realtors and a broker with Summit Resort Group, said July, August and September are historically some of the busiest months of the year, mostly because this is when many agents are closing on deals they sent out weeks prior. By the end of September, agents typically aren’t putting together as many deals — yet this year has some singing a different tune.
“What I’m seeing is that we’re putting together a lot of deals, that our number of sales have still been pretty significant,” Cottrell said.
According to Land Title Guarantee Co.’s July, August and September reports, the county’s real estate industry had about 784 transactions amounting to over $857 million in monetary volume. Each month has also shown a rise in the average price per square foot. In July, that equated to $675. It was $694 in August and $700 in September.
Homes that cost at least $1 million make up the majority of the inventory, and this has held steady all quarter. In July, this inventory made up about 65% of sales. It was 68% of sales in August and about 65% of sales in September.
Those who are doubtful about the market should also take a peek at the average price of a resale family home. In July, the average price was about $1.64 million, and it jumped nearly 11% to almost $1.81 million in August. In September, it increased slightly to nearly $1.83 million.
Even still, it’s hard to get the whole picture of the market without factoring in what’s happening with the community’s short-term rental market. Breckenridge recently passed a cap on nonexempt short-term rentals that takes effect Nov. 2, Summit County approved a temporary short-term rental moratorium while it overhauls its vacation rental program, and other towns are following suit with other programs.
All of this discussion, especially what’s happening in Breckenridge and unincorporated Summit County, has buyers and real estate agents skeptical of how these programs will impact the local real estate market. According to Land Title’s reports for the third quarter, an average of 77% of buyers are coming from the Front Range and out of state, meaning a good portion of these properties are likely bought 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 that some buyers have waited to proceed with a property purchase until after the regulations have rolled out. Simson said she primarily works in neighborhoods that are in unincorporated Summit County, such as Wildernest and Dillon Valley, both of which will be impacted by the county’s new rules.
“It’s a lot of people from the Front Range,” Simson said. “… And they want to buy their second home up here, and they count on rentals to help offset the payment. I would say the rental income is helpful, but it certainly isn’t going to cover all of your expenses. (But) how does it affect them? It’s like any property right that gets taken away from you.”
Cottrell said she has seen sellers wanting to get their properties on the market in advance of Breckenridge’s ordinance taking effect so that buyers who want to purchase and rent their properties have time to do so. Right now, she said she’s fielding a lot of questions about what these programs will look like once implemented.
“We just don’t have those answers yet,” Cottrell said. “The discussions have created this air of worry between buyers and sellers. I wonder if there isn’t a little bit of, ‘Oh, let me get this sold before we have these changes; the market is good and then whoever buys it can still do what they want with their property.’”
In general, both Simson and Cottrell said they expect sales to stay strong despite a lot of uncertainty for how these rules will impact the local market.