Despite waning buyer frenzy and rising interest rates, house prices continue to climb
The past year has seen an unprecedented time in Summit County real estate history, with prices soaring and a flurry of local and national buyers jostling to capture the limited available inventory. And with the first signs of a recession on the national horizon, many sellers are wondering if now is the right time to take advantage of the momentum, before circumstances change.
Debbie Nelson, broker-owner at Nelson Walley Real Estate, suggests that circumstances have indeed changed in recent months, with surging mountain property sales reminiscent of the gold rush finally taking a break.
“We saw an incredible frenzy of buyers from June until about mid-March – each property received multiple offers and prices were well above the listing, based on less than 75 total properties on the market “, she says. “Buyers were rushing to buy, but that has completely changed. We are now returning to market conditions closer to what they were, pre-COVID. »
Ned Walley, Broker-Owner, says he believes there are still great opportunities for those who have carefully curated a property and who may worry about the changing financial climate, stock market fluctuations and the impact of rising interest rates.
“It’s still a seller’s market, but things are going back to a normal seller’s market before COVID, and we’re seeing the super hyperactivity of the last 18 months lessen a bit,” he says. “Now we need to remind people that even on sales under $2 million, it can take four to six weeks to sell a home, not the three days it took last winter.”
Yet prices continue to rise
Despite this market normalization, Nelson says she and Walley believe local property prices will rise significantly this year, even with smaller inventory, and even if the market begins to cool in other parts of the country. with some early rumors of a recession. and a recent increase in interest rates.
“The fundamentals of supply and demand are in play here. When we had a more balanced market, in 2014 and 2015, we had 1,200 to 1,500 properties for sale. Now we have less than 20%” “In order to achieve a more balanced market, we’re going to have to get closer to 1,750 active properties, because Summit County has become a bit of an extension of the Denver market, with so many people from the Front Range who make it their primary residence.
This equalization of the market, Walley says, has also led to a steady increase in prices.
“If you look at the land title numbers, the number of transactions is down, but the monetary volume is up,” he adds. “They balance each other out. I think we will have a total market value close to what we had in 2021, but with 1/3 less transactions.
Our unique circumstances, they suggest, mean sellers still have great opportunities to secure record prices for their properties, but shouldn’t feel like time is running out. And they also need to be realistic about finding a replacement for their current home, unless they plan to move out of county or state, because low inventory is the same almost everywhere in all of Rocky Mountain West.
“We have a lot of clients who would like to sell but still want to own mountain property,” says Nelson. “The first thing we have to ask them is, ‘Where are you going? You may have to exit this market altogether. So sometimes we have to ask customers to stop and think.
Walley said the whole 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 getting back to a climate where sellers can be strategic and thoughtful,” he says. “It’s still a fantastic time to sell and values continue to rise. If you are seriously considering selling, contact us as we hate to leave 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 don’t believe rising interest rates will negatively impact our market, although it will have a major impact on many buyers’ overall buying potential, given that 44% of Summit County’s transactions were in cash.
“However, we believe the decline in the stock market could have a negative effect on our market – as many people are pulling money from the stock market to buy properties in Summit County,” she adds. “We’ll have to wait and see what the stock market does and how that may affect real estate sales.”