Indicators are pointing to a market correction in Steamboat. It is likely already happening. Thus, it’s a transition market here in Steamboat Springs, which means opportunity for buyers and sellers.

I made a video that digs into this idea.  Click below to view it, or read on for an overview.  

We look closely at 3 important metrics:

  1. The gains experienced during the pandemic.
  2. Transaction and Sales volume.
  3. Current inventory, and supply levels.

Appreciation, or gains:

  • At this point, most homeowners know their property values have dramatically increased since the start of the pandemic. Do you know how much they have appreciated? As we look at some of the more popular nightly rental areas, it’s significant to note that many have had the average sales price double since 2019.
  • The average sales price of the Rockies went from about $297K, to just over $569k. That’s a 92% increase. The Lodge increased by 94%, Eagle Ridge appreciated by 117%, and The Ranch appreciated 127%. The West is up 108%, while Storm Meadows appreciated by 72%

WOW! That means that if you paid cash, you likely doubled your investment! However, if you financed and you put down roughly 25% (which is the norm for investments), your invested money has increased by 350%!

  • For the locals out there, you’ve experienced similar appreciation in single family homes downtown (101%), and actually in most of Routt (90%).
  • This is great news for homeowners, but if you look at what has been happening recently between 2022 and 2023, the growth is either marginal, none, or slightly down. Steamboat is usually the last to be affected and the first to rebound in recessions. This metric likely signifies the start of the trend reversal in Steamboat, which also means this has likely already happened in the rest of the country.

Transaction volume in relation to overall sales price:

Looking at this chart of total sales volume and total transaction volume through August:

  • 2022 saw transaction volume transition back to pre-pandemic levels.
  • That trend has continued in 2023 and it’s now below that pre-pandemic level by about 15%.

Thus, the Fed’s interest rate hikes have clearly taken their toll. Higher interest rates reduce buying power, and have prevented many locals and investors from transacting in Steamboat. Compare this to sales volume:

  • This chart also shows sales prices are about 25% higher than they were at this point in 2020. It’s clearly dropped off from pandemic levels, but if a trend line is drawn from 2019 to 2023, the pre-pandemic trend continues.
  • However, there was a pandemic, sales volume did shoot up during that time, and now it is trending down from those peaks, as evidenced from 2021-2023.
  • If the current trend continues, this could be another major signal for a market correction here in Steamboat.

Current inventory and supply:

To be clear, current inventory is still seasonally trending the same way it has since before the pandemic, as seen in this 10 year graph of active inventory. What is starting to change, is supply, or the rate that houses are coming on and leaving the market.

Routt County Active Inventory

  • Traditionally, 6 months of supply denotes a balanced market, less than 6 months implies a seller’s market, and more than 6 months is a buyers market.
  • While it is still mostly a seller’s market, it is worth noting that some categories are trending towards, or have already shifted towards, being more favorable for buyers. For example, most of the luxury categories are actually buyer’s markets at the moment.

Steamboat Supply

  • If you are looking for a high-end home in Steamboat, you have more options and leverage than you might think.
  • Additionally, if you are thinking about selling in this category, you should determine how you can distinguish your property because if you don’t, expect a sales process that could potentially last over a year.
  • Most people haven’t realized this opportunity, and this is an indicator that this market is transitioning faster and quicker than most want to believe.

Luxury Steamboat Supply over $4,000,000

So what’s my take? Most of these stats show a return to pre-pandemic levels (excluding prices and active inventory).

  • If you have owned property for a few years, you are likely in a strong equity position. When faced with the prospect of a move, it could be easy to hide behind your low interest rate, but do you want to let interest rates stand in the way of living your life today? I don’t.
  • As a buyer, you have more buying power than you have had than at any time in the last 4 years. Sellers are offering financing incentives like 2-1 buy-downs, and many lenders are rolling out products that incorporate free refinancing when rates drop.

Get back to life planning, call me, maybe talk to a lender, and start chasing your dreams again!