As the coronavirus pandemic lingers on and people tire of new puppies and baking bread, what’s left? Remote workers able to log on from anywhere combined with historic low interest and high savings rates created the perfect storm of demand for second homes.
By some estimates the demand for second homes currently outpaces that for primary homes. The highly active real estate markets in Colorado’s desirable mountain communities are evidence of that. These markets are likely to stay strong but it’s predicted that more buyers could get priced out of their budgets for a discretionary second home purchase, especially as offices reopen and people rethink their priorities.
A June 2021 report by the Northwest Colorado Council of Governments, The Mountain Migration Report, attempted to answer the question, as residents of these communities observed that their communities were busier, was the in-migration real?
- 44% of mountain newcomers did not spend time in their respective county on a regular basis prior to COVID.
- About 60% of newcomers and 70% of part-time mountain residents work for an employer outside of the county, compared to ¼ of existing full-time residents.
- New residents expect to reside in their respective county for close to 9-months per year on average this year in and in future years, an increase of over 6 months from pre-COVID time.
- Close to 70% of newcomers and 80% of part-timers have household incomes over $150,000 per year, compared to 40% of existing full-time residents.
Local real estate agents corroborated the shift in new buyer occupancy trends. Their experiences assisting newcomers revealed that motivations to purchase affected home amenities needed. Most prevalent were turn-key immediately livable homes as opposed to fixers, home office space, enough room for families to live versus visit, and both rural and in-town locations.
We are delighted to have so many exceptional referral partners in Colorado’s mountain communities who were kind enough to share the following information, and some market stats for the period through June 2021.
Crested Butte
This is the perfect summer getaway with hiking, mountain biking, summer concerts and gorgeous wildflowers.
According to Bud Bush, Principal with Blue Bird Real Estate, buyer confidence in this market and lifestyle is “higher than ever… and the demand is keeping supply at record lows. 50-50% of current buyers I’d say are non-local.”
“Crested Butte surpassed an average selling price of $2 million for the first time, with and a price per square foot over $900.” And they have less than three months of inventory available. Twice as many condos have sold to year to date.
Durango
Once known as the “Hollywood of the Rockies” due to the town’s many appearances in films, is a charming Western town and vacation destination for both winter sports and summer excursions.
According to John Wells, Broker/Owner of Wells Group Real Estate, “The volume of travelers descending on the mountain communities has grown exponentially from pre-COVID times. We believe it will continue for some time. The exodus, for a second or vacation home and for pure lifestyle relocation, is at an all-time high.”
YTD in 2021 80% of Durango area homes sold over $1M were to second homeowners and vacation home owners/investors. Overall, Wells has seen 30-35% of all sales are for non-primary homes.
Steamboat Springs
With more than 13,300 year-round residents, up from 12,000 in 2015, robust cultural and nightlife amenities, and countless outdoor activities, Steamboat is more that its’ “Ski Town USA” designation.
WK’s partner company, Colorado Group Realtors, reports that there are more non-locals in town since the pandemic started, and many new families staying in Steamboat for the school year. Thank goodness for a new K-8 school that is opening this fall as school district officials have been “frazzled” by the sheer volume of new families applying for enrollment. The community that has needed a new school for a long time is hoping they don’t immediately outgrow it.
Average home price in Steamboat Springs is now $1.2M forcing people both down and up valley to other communities such as Craig, Hayden and Oak Creek.
Steamboat got a boost recently with a $23M anonymous donation to the Yampa Valley Housing Authority, with the benefactor specifying the funds be used to purchase land to help Steamboat keep its character. This means the housing authority can direct how the land is developed and not be at the whim of a private developer focused mainly on risk and profit margin.
Breckenridge
Multiple offers, if sellers miss/over price on the high side buyers are willing to pay ridiculous but not double. Over list, waiving, lots offers, escalation, appraisal,
Matt Powers, Managing Broker/Partner of Breckenridge Associates Real Estate, said the percentage of homes in their area that are second homes hasn’t changed with the pandemic, and is still around 60-70%. But the rental income for mountain properties has been so good this past 18 months that investors/2nd home are buying properties they might not have considered buying before.
At the time of this writing Matt reported that their MLS showed current 85 active residential listings, a mere 25% of “normal” levels. However there were 125-130 properties in pending status, and 50 of those went under contract in the last week. It’s not that there’s nothing for sale, it’s that the absorption rate of any inventory is extremely high.
The number of new full time residents from out of state seems to be tapering off. Many people that moved there in the beginning of the pandemic thought they were never going back to office, and their kids would continue with online school. With offices and schools reopening that mountain lifestyle dream has softened.
Grand County
Grand County is a popular second home destination for residents in the Denver Metro due being the first ski area turn off on I-70 West out of the Denver metro. to the short approximately 90-minute drive.
Popular with skiers, Winter Park saw a 45% increase in condo sales compared to the same period in 2020, with the largest increases in the $700,000-$749,000 price range. Sales of single-family homes over $2M more than doubled, median home prices increased by 13% and days on market was cut in half to 102 days, down from 215 in 2020.
The quaint community of Grand Lake also saw a significant median single family home price increase of 34%, and 15 sales over $1M compared to only one sale through June 2020. The top two highest sales in all of Grand County were in Grand Lake at $4.6M and $4.1M.
Land sales in Grand County tripled this year compared to 2020 and median sale price rose from $86,000 to $120,000.
Another result of the growing demand and escalating prices in mountain communities is that local workers are increasingly edged out of these housing markets. If people can’t live in even near the community where they work, what does that do to the community? As a result, the workforce available to work in restaurants, transit and retail is dwindling everywhere. This housing problem isn’t new, but it is exacerbated by the second home trend.
Financial website SmartAsset tracks the top 25 hottest secondary home markets, and fortunately none of our Colorado mountain towns made the list which was instead dominated by a variety of sun-drenched coastal locations where one in three mortgages are for secondary homes. While popular with residents along Colorado’s Front Range, perhaps we can keep these mountain gems a secret from the rest of the world just a little bit longer!
If you or someone you know are interested in exploring the possibility of a second home, in Colorado or elsewhere, please allow our WK Relocation Department to introduce you to an experienced real estate professional from one of our partner companies through Leading Real Estate Companies of the World®.