With COVID came a massive shift in the way people work and live, and real estate has become a hot topic. Some folks believe the market is overpriced while others see opportunity. As a realtor, I always look at both the upside and downside in the market. I constantly remind my clients they have to run their own race and not compare their situation to their neighbors, friends and co-workers. There will be times when it is more opportune to buy or sell for you personally. Life events often make it a necessity for some to buy and for others to sell. Here’s a look at the pros and cons of each right now.
Currently, it is a seller’s market.
There are significantly more people looking to buy houses than there are houses currently available. REColorado, the provider of the local MLS system, notes that Routt County’s current inventory of homes is the lowest it has ever been since they started tracking. In 2016 there were 792 active listings at this time. Today, there are 241.
Sellers can demand higher prices and still average closing at 99% of the ask price. Buyers are also making concessions on contract stipulations since more often than not there are multiple offers on homes. This gives sellers confidence that the deal will close.
Of course, it’s not the right time for everybody to sell.
If your only real estate holding is a primary residence, it could be daunting if you have nowhere else to move. In this fluid market, that transition can be intimidating and it may be easier to hold onto your home and renovate to your current needs. Trying to sell high and rent until prices correct could be tricky as well, because it is difficult to time the market. The pandemic has been tough, and some may not have the desire to give up their home and the security it affords.
Buyers are hoping to buy now because they see plenty of growth still to come.
Routt County has become more appealing to many over the last decade with countless infrastructure improvements and the addition of Steamboat Resort to the Ikon pass. The recession in 2008/09 hit housing hard and caused new construction to slow considerably. Supply now doesn’t come close to matching the increased demand. Steve Goldman, the CEO of Colorado Group Realty notes that, “It’s simple economics. When there is a supply deficit to demand, prices escalate. In a desirable place to live like Routt County where there is low inventory, we don’t expect prices to fall any time soon.” Since 2016, REColorado notes the median home price has risen from $380,000 to $598,000.
The $400M in improvements over the next few years at Steamboat Resort provide yet another reason buyers may want to jump into the market right now. Within the next three years, Steamboat will have a new base area, loads of added terrain and additional up-hill capacity. The improved resort means more potential for tourism and more sustained growth. Just like valuations get baked into growth stocks, some believe now could be a great time to take advantage of potential growth the resort may create.
Remember, the economy constantly changes.
The real estate market is cyclical, and a future downturn could create other opportunities that buyers and sellers had not before considered. As a current or potential owner of real estate, it behooves you to always stay on top of the rapidly changing market conditions.
In the end, it is important to remember the decision to buy or sell will be dependent on your individual situation.
While there are a lot of global factors the pundits like to discuss, there are also local and personal elements that influence decisions. It could be useful to consult a financial advisor or a realtor that can help you determine if now is the right time for you to buy or sell.
Photos: Charlie Dresen