Year End Estes Park Real Estate Report – 2009
It is no secret that real estate markets across the country have been hammered in the last year and a half. In the past, Estes Park has responded to nation-wide real estate market swings with steady increases in value. Unfortunately, the recent recession and nation-wide housing crash was far too widespread for Estes Park to escape unscathed.
Estes Park has always enjoyed a steady stream of 2nd home buyers who have been vacationing in Estes Park for years. While the numbers of vacationers coming to town has not dropped significantly, the ratio of vacationers making an effort to purchase real estate has dropped, as reflected in the numbers in this report. The few who did pursue real estate were far more cautious and took their time to make an informed decision – even when it occasionally resulted in a less-than-ideal situation. One common thread in the mentality of buyers this past year was that they were only interested in getting the “best deal” available. Only 17% of all sold properties in the Estes Park area were sold for full price which is down from 25% the year before.
People trying to sell property in this past year have had a terrible time as well. Average times on the market for sold properties have sky-rocketed to over 200 days. The properties that are currently for sale are averaging over 300 days on the market, waiting for a buyer to come along. Many sellers are lowering their prices in an attempt to generate more interest while others are content to sit on their price and wait for a buyer to come along even if it results in very little activity. All in all, it’s a very tough time to be selling a property in Estes Park.
This year’s Real Estate Report is dismal at best, but there are a few interesting rays of hope pointing to a solid year in 2010. Before I attempt predicting the future and make any recommendations for buyers or sellers, let’s first see what the statistics say about how 2009 played out.
Overall Summary
As you can see, we had a severe drop in the number of people willing to purchase properties in Estes Park. Vacant land was the hardest hit with a 71.4% drop in the number of sold properties. With only 8 sales of vacant land for the entire year, any statistician will tell you that average and median numbers run a high risk of being skewed and unreliable. You can be sure about one thing, if you are trying to sell a higher priced lot in Estes Park, don’t expect a quick sale.
Single Family Homes
It was no surprise that the smaller homes with under 1500 square feet and 1 to 2 bedrooms fared far better than the larger homes. There were actually more small homes sold this year than in past years. Unfortunately, the increase in the number of sales did not necessarily translate into increasing value for these small homes. As you will see elsewhere in this report, the higher-priced listings had a very difficult time selling.
So What Homes Are Selling?
With a 44% decrease in the number sales above $500,000, inventory in the upper price ranges are growing steadily. Along the same lines, we only saw 2 homes over $1,000,000 sell this past year while we have 29 homes over $1 million currently for sale on the market.
Homes under $200,000 had a relatively good year increasing the number of sales and keeping inventory very low in comparison to the rest of the market.
Condominiums
Even with the severe decrease in the number of condominiums sold this past year, there are some interesting correlations that can be gleaned from these numbers. Surprisingly, the newer and larger higher-end condominiums showed increases in prices, reflected in both median and average numbers.
So what Condos are Selling?
The middle price range of the condo market was hit hard this past year. Everything between $150,000 and $400,000 failed to match 2008’s production. The higher end of the condo market was a big surprise. While this portion of the market makes up a small portion of our overall numbers, every category over $400,000 met or exceeded 2008’s numbers.
Predictions for 2010
The year ahead has the potential to be a very healthy year in Estes Park, or it could be just as disappointing as 2009. There are a few external factors that will play a heavy role in determining and shaping property values in Estes Park.
1. Interest Rates Will Increase
Several mortgage brokers I work with are warning that interest rates will rise in the coming year. Since the sub-prime mortgage market tanked, there have been very few (if any) private investors buying mortgages on the back end. In order to keep rates at the low amounts they were already at, the federal government had to pick up the slack in demand for buying mortgages in the secondary market. In the very near future, the federal government will run out of the money they allocated towards buying these secondary mortgages. As a result, rates will rise until they are attractive enough for private investors to jump back into purchasing mortgages on the back end.
Potential buyers need to act as soon as possible to take advantage of the low rates while we have them. Many experts are predicting mortgage interest rates will increase dramatically this summer.
2. Supply and Demand in Our Local Real Estate Market
In nearly every category of Estes Park’s real estate market, we have more inventory (supply) than we have demand. Elementary economic principles of supply and demand show there are only two ways to find where the demand is in a market. You can either reduce prices or reduce quantities. These principles have shown to be true as the only properties that are selling are properties that are priced well in comparison to their competition or are extremely unique.
3. Tax Credits
In addition to the first time home buyer tax credit, the most recent amendment to the economic stimulus package included a $6,500 credit for buyers who have owned their home for 5 years out of the previous 8 who are moving into a new home by the middle of 2010. A contract on the new purchase has to be in place by May 1, 2010. They do have to occupy it as their primary residence, but the good news is you don’t have to sell your previous home in order to qualify for the credit. While the original stimulus home buyer tax credit had little effect on Estes Park, this new legislation has much more potential to impact the decisions of home buyers in Estes Park. Contact me if you are interested in more detail on this tax credit. You could also contact your CPA or accountant if they are up to date on the recent changes in tax laws.
4. Positive National Real Estate Housing Market News
Every day I seem to be seeing more and more positive national real estate news mixed in with your typical doom-and-gloom put out by the national media. As this trend continues, people will become more and more comfortable investing in real estate. This will only help Estes Park.
Summary:
Contrary to the overall Estes Park real estate market in 2009, I am very pleased to report that I personally had my best year ever regarding the number of sales I was able to close. While my average value per closing was way down, I have nothing to complain about considering the severe drop in real estate sales for Estes Park as a whole. The vast majority of my sales were due to repeat clients or referrals from past clients, friends, and colleagues in the real estate business. Thank you for your continued support and for trusting me to represent your real estate needs in the Estes Park area.
Although 2009 stats were gloomy at best, I am more than happy to shift my focus to 2010. With higher inventory, low buyer demand, tax credits for buying a home, and a national housing market that is beginning to show signs of recovery, the next few months seem to be an ideal scenario to buy a home in Estes Park.
Please give me a call or email if you would like a more detailed report containing any of the segments mentioned above. I can customize your report to include days on the market, closed price to list price ratio, and just about anything else you can think of.
***All stats pertain to the immediate Estes Park area determined by zip code and do not include the surrounding areas. All stats have been obtained via the IRES Multiple Listing Service.
