Breckenridge Real Estate and Property
This article is written to help address the concerns and question, “Will the Breckenridge Real Estate Market Crash?”
The opening lines of an article quickly summarizes the current activity of buying real estate in a Colorado resort town in the mountains and it links to other articles and stats that demonstrate the activity and history of the resort town real estate market. The article by the Colorado Sun is titled Buying frenzy slows but home prices remain sky-high in Colorado mountain towns.
At Mountain Habitat Real Estate in Breckenridge, we work hard to provide insight into the mountain real estate market. In fact Dina has spent time on the phone discussing the current market with long-time community brokers and gained their market perspective. Please contact us to find out what she and others think about the current real estate market and whether or not the the Breckenridge Real Estate Market will crash.
The number of transactions is waning as the supply of homes for sale declines, but buyers continue to pay record-setting prices for high country homes.
While the number of transactions are diminishing, the purchase price of the properties is still increasing, especially in those markets where property is finite,” Renshaw said, describing how mountain-town home builders are so backed up that buyers sometimes must wait several years to build a new home on vacant land, which makes existing homes “more desirable and expensive.
And cash remains king in most resort markets, where fewer home purchases are influenced by rising mortgage rates.
Source: The Colorado Sun, Buying frenzy slows but home prices remain sky-high in Colorado mountain towns
Price Cuts in Denver and the Front Range
Some say that the mountain market follows the Denver market, but I will say that sometimes that true, and other times, it does not apply. Another article from The Colorado Sun, What’s Working: More home sellers cutting for-sale price in metro Denver, Colorado Springs, gives a reference point for how much the price cuts are for the housing market. Overall, the median cuts are minimal and less than 5%.
Denver and Fort Collins both were below the national average for the median size of price cuts. But both places are increasing. The median price cut in Denver was 2.7% in June, compared with 3.3% nationwide. In spring 2021, Denver’s median price cut was 2.3% while the U.S. was 2.9%. Denver was also at a historical low when it came to the number of listings with price cuts at only 6.1% of houses.
Inflation and Interest Rates
We all have been hearing the constant doom and gloom of the possibility of a major recession next year and the rising interest rates. However, this has yet to play out, while certain areas of the economy can be considered in a recession already. Some experts have even backtracked saying that we might have seen the worst of inflation already.
While some buyers seem to know what’s going to happen with the market and seem happy to wait until the market falls, I would be leary of that. Here’s a quote that comes from Bankrate’s article, How interest rates and economic factors impact housing.
Predicting the future of the real estate market is difficult even for the experts. No one really knows how things are going to change in the future.
One the one hand, interest rates have risen significantly in recent months and the Fed has not done anything to make it seem like it plans to slow down. However, housing prices have spiked in the past few years, increasing by more than 30 percent since 2020.
Some believe that rising rates and an economic slowdown will force prices to fall. Others insist that inflation and reduced housing supply caused by a slowdown in new construction and institutional investors buying inventory will lead to prices holding steady or continuing to rise.
Mortgage Pro Opinion – Josh Smith
We met Josh as a client and have now come to work with Josh as a colleague and friend. He splits his time between Texas and Colorado and is licensed in both states and can help shed some light on the current market with the following video. Please let us know if we can help patch you through to ask Josh more questions. He’s one of a few mortgage pros we recommend potential buyers consider when working on the financial part of the equation when purchasing a Colorado home near Breckenridge.
The Looming Possibility of Recession
Supply and Demand and Current Price Per Sq. Foot
The bottom line is that there is still high demand for high country homes, albeit less than the record setting pace of the last two years that drove values up over 30% in that time. In fact, prices are as high as ever in areas, as another Colorado market resource said that Breckenridge PPSF is $945/House and $1,021/Condo, for the previous week, dated October 17, 2022.
Prices Unlikely to Drop Significantly
Another reason to believe that the Summit County Real Estate market is insulated from any major market crashes is an article titled, 2023 FORECAST: Colorado home values to increase in 14 markets, decline in two, where it says that there may actually be a 4.1% INCREASE in overall property values in the Breckenridge area. Click here to read that article.
Another article titled “Think Home Prices Are Going To Fall? Think Again” explains a bit more about the throught process about why no major declines in prices will occur.
“. . .we’re still well below normal levels of inventory and that’s why even with the pullback in demand, we still see house prices appreciating. While there is more inventory, it’s still not enough.”
As a result, experts are projecting a more moderate rate of home price appreciation this year, which means home prices will continue rising, but at a slower pace. That doesn’t mean prices are going to fall. As Selma Hepp, Deputy Chief Economist at CoreLogic, says:
“The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”
Is it Still a Sellers’ Market? Yes, but it’s Still a Good Time to Buy
Some Highlights from the Infographic Above
- While buyer demand has moderated and housing supply has grown in recent months, it’s still a sellers’ market because inventory is low.
- The latest data shows sellers continue to benefit from serious buyers and competitive offers. In July, the average home received 2.8 offers and 39% sold over the asking price.
Market Corrections and Inventory
According to others, there will be NO MAJOR MARKET CRASH (10:00 in Graham Stephens video), but there may be some market corrections. But, don’t expect them be nationwide and across the board, meaning our resort mountain market may be insulated from any major market moves, as demand is still high. Therefore, the prices and overall property values MAY ACTUALLY INCREASE.
Graham Stephan, a real estate agent and investor, suggests the following:
- Shop Your Mortgage Rate – Doesn’t hurt to ask, and you can always refinance later on.
- Don’t Get Too Attached to Any One Property – Do your best to negotiate and don’t be afraid to walk away.
- Lock in a Fixed Rate Loan – Get the longest term you can up front.
- Only Buy a Home You Plan to Keep For at Least 7 – 10 Years – Allows you to ride out any market fluctuations until they rise again to all new highs.
Where are the Buyers? Patiently Waiting, or Just Living Life
I’ve watched videos and read more than a few articles, and I’ve gotten the general feel that no one really knows what’s going to happen. It’s simply all speculation. Of course, you can look at big trends and some indicators that may lead to generalized actions in urban areas, but living in the mountains has taught me that those kinds of articles and videos don’t apply to the mountain communities.
My opinion was recently reflected in the video from Graham Stephan, says that buyers may simply be doing the same, reading and watching, and holding off to see what happens through the beginning of the year. Then, they will know what happened with elections and which direction policy may be heading and how it could affect their assets, investments and how to move forward.
4 Reasons Why it’s Easier to Buy Now than 6 Months Ago
- You Have More Time To Make a Decision – Previously you had to make an offer immediately or after one showing.
- There are More Options – 6 months ago there was less inventory and you had to settle for what was available in the market.
- You Can Keep Your Contingencies – Before you likely had to remove all your contingencies for an offer to be considered, let alone accepted.
- Seller Credits – Previously you had to make an offer, way over asking, and you didn’t get a seller’s credit, whereas now you can possibly get credits to help with closing costs or to help bring down your interest rate.
Wow, you made it through the article and are a the end, congratulations! I’m sure you may have questions about what homes fit your criterion for the perfect family home, and we’re here to help answer questions and concerns. Click here to go to our contact page, or use the form below.