Photo by Liz Copan / Summit Daily archives
As the end of the year approaches, Summit County real estate reports are showing accumulated data that reveals trends from the 2022 market. From increased interest rates to high housing demand, Summit County real estate has had an interesting year.
“That flight out of cities and to more rural areas, or — the Rocky Mountains, where everyone wants to live and come play — that really boosted our pricing here in Summit County, more so than anything else,” said Chris Lankhorst, Slifer Smith & Frampton’s real estate market president.
Land Title Guarantee Co.’s Summit County market analysis for the end of October shows that while prices shot up, transactions went down. Even then, due to the increase in real estate transactions from 2020, 2021 and the beginning of 2022, the analysis presents that prices have decreased.
Lankhorst said, due to the outstanding real estate boom that occurred during the COVID-19 pandemic in Summit County, 2021 can be deemed as an outlier.
“Since ‘08, ‘09, we’ve been climbing up climbing up climbing up, and then all of a sudden, you get to 2021, where everything kind of peaked,” Lankhorst said. “We peaked so high and appreciated so fast that … 2021 will be that outlier.”
This has led to a decrease in the historic market change. 2022 is the first year since 2016 that the monetary volume in the market — the total value of all the real estate sales in the county — took a dip. In 2015, the market dipped about 2%. The year-to-date comparison of 2022 shows the market dropped whopping 25%.
While it may seem significant, real estate trends from 2021 indicate that the drop may not be as bad as it seems.
Former Summit Realtors president and real estate broker Dana Cottrell said there were days in 2021 where she could only find two properties for sale in the town of Dillon, and at times there were none.
“(Prices) normally don’t accelerate at the rate they did after COVID,” Cottrell said. “It really truly was an anomaly. I’ve been involved in real estate for 25 years, and I’ve never seen prices go up like that before.”
Lankhorst explained if 2022’s real estate trends were compared to 2019, they wouldn’t seem as significant. In fact, the county has $400 million more sales compared to the same time in 2019.
One factor that has gone up is the average price of a single family home. In 2021, the average price of a single family home was about $1.72 million. The average year-to-date price of a single-family home so far in 2022 is just under $2.08 million — about a 21% increase.
Cottrell also pointed out that 2022 experienced the tail end of 2021’s frenzy, which could have skewed those single-family home prices. Lankhorst called it the “hangover.”
The only two months of 2022 that real estate sales were not in lower comparison to 2021 were January and April. January experienced a 28% jump while April barely made it over the hump at 2%.
Cottrell added that demand decreased more and more each month over the year.
While folks flocked to each sale she managed at the beginning of 2022, by June, she said offers had dwindled. Then, interest rates surged. Where interest rates used to be around 3%, they are now up to 6% or 7%, which increases the cost of a mortgage and, according to Lankhorst, a buyer’s purchasing power as well.
That’s when Cottrell said offers dropped off.
“It was really dramatic,” she said.
According to the market analysis, each month of 2022 brought a decrease in the number of transactions from 2021, the lowest being October of this year, which saw a 49% drop.
Lankhorst said this increasingly affects local families. Though Summit County has been affected by expensive housing since the ’70s and ’80s, Lankhorst said, it’s become more severe as of late.
By October of this year, about 41% of buyers were from the Front Range, 32% were out-of-state domestic buyers and only 27% were locals. Cottrell said in the past, transactions were more evenly split into thirds. Now, locals are at the bottom of the heap.
“I think right now it’s even more so because of the flight to the mountains, the flight to those rural areas out of the cities, and it’s increasingly harder,” Lankhorst said. “We’re running out of land in Summit County, there’s just not anything more to be built upon.”
Both Lankhorst and Cottrell said a peak like Summit County saw in 2021 is unlikely to happen again.
Lankhorst explained that folks who have the 3% to 4% interest rates they received in years past are unlikely to move since their new interest rate would likely double. If his theory comes true, Lankhorst said inventory will become more balanced.
“If you’re a local and you’re thinking you want to get into a bigger place … that becomes really hard when you look at just that 3% to 7%. It’s such a massive increase,” Cottrell said.
At the end of the day, Cottrell and Lankhorst said a year like 2021 is not likely to happen again. Whether the market bends toward buyers or sellers is still in the air, but both expect Summit’s hot real estate market is likely to cool down.
