The impact of COVID-19 and a forecast for next year
The year 2020 will go down in recent history as a year of change and discovery. What a ride it turned out to be for the real estate market in Steamboat Springs. Leading into the year, we had a steady and healthy market. The first quarter started out strong with a 15% increase in residential sales volume year-over-year. But things quickly slowed down amidst the Coronavirus shutdown in the spring of 2020. In the second quarter, residential sales volume dropped a whopping 44% as compared to 2019. Values, however, did not slip during this slowdown and median price-per-square-foot was up 5%.
As people stayed at home, they became more aware of their surroundings and their dreams. Many also recognized significant changes to their needs within their homes. A theory began to emerge that with more people being given the freedom to work remotely, many would choose to live outside of urban areas. Mountain resort towns like Steamboat were a natural choice. Once the summer months hit, this theory quickly became reality. Restrictions were lifted and buyers began to flee their urban environments in search of greener pastures. For many, this was an opportunity for a full-time move to the mountains while for others, it was an opportunity to find a second home for extended stays.
The sales volume during the summer months ramped up quickly.
The market was also fueled by historically low interest rates, giving buyers a significant increase in their purchasing power. During the third quarter of 2020, the residential sales volume was up 100% compared to the third quarter of 2019, the median sales price was up 19% and the available residential inventory at the end of the third quarter was less than half of the prior year.
It’s no surprise that a large number of buyers focused on our area. With the high quality of life, excellent amenities, great schools, proximity to an airport, and the friendly, genuine community that Steamboat is known for, our town was an obvious choice. Buyers searching the mountain regions also realized what a great value Steamboat is. Being a little further off the beaten path of the Interstate-70 corridor, Steamboat has also remained a bit less discovered.
There are many questions about what the future looks like as we head into 2021. How long will our current market trend continue? How will any future Coronavirus shutdowns affect our market? While there are many uncertainties, the demand remains very high and there are no indications of that changing. Colorado, and especially the mountain resort areas of Colorado, remain very desirable places to live and to visit. The supply also remains very low with a limited number of sellers and with new housing construction not keeping pace. This imbalance will continue to maintain a strong market and solidify values. The low interest rates are also expected to continue for some time, giving buyers great opportunities to purchase with great terms.
With the buyer shift towards the less populated areas, the Steamboat real estate market is poised to continue its strong trend into 2021. Our community offers a safe environment and a high quality of life for our residents and visitors to enjoy. The high demand and limited inventory will likely continue to support a strong market this year. We look to 2021 with high hopes and great expectations, but if 2020 has taught us anything, it is that there are many unknowns.
Barkley Robinson is a real estate broker at Steamboat Sotheby’s, dad of 3, and living the dream in Steamboat Springs, CO.