When realtors estimate how strong the Summit County market will be this year, they typically don’t base their predictions on the first quarter of the year. Many realtors point to the many properties still in use by owners during the ski season as a reason why this quarter has not seen as many transactions compared to other quarters.
During the summer and fall months—the busy seasons for many agents—a few hundred transactions can occur in 30 days. But the Land Title Guarantee Co. reports for January, February and March show much less than that. In Januarythe county broke 124 transactions in February there were 107 transactions and in Marchthere were 165 transactions.
January sales for this year were up 28% compared to 2021, but February sales were down 10% year over year and March sales were down 17%.
This does not affect Richard Wallace, broker and partner at Breckenridge Associates Real Estate.
“If you look at Land Title’s numbers, it aligns with what we’re seeing in our office, which is that the number of properties sold in Summit County is down 31% from the first quarter of 2021, so that’s significant. What’s interesting is that even though the number of homes sold is down 31%, the rise in prices has meant that total dollar volume is down just 3%,” Wallace said.
Wallace and other agents — including Ray Brueggemeier, a broker and owner of Cornerstone Real Estate, and Anne Skinner, owner of The Skinner Team — said that kind of appreciation is likely to wane. Short-term rental policies are taking hold, interest rates are rising, and inflation is making buyers’ wallets a little thinner than usual. All of these factors are affecting Summit County’s real estate market in myriad ways.
For example, Skinner said short-term lease regulations, particularly the county’s 135-day cap on its Type 2 licenses, don’t affect all buyers equally.
“It was pretty mixed for us, to be honest,” Skinner said. “I would say when it comes to short term rentals, we’ve certainly had some buyers who said, ‘If I can’t do what I’m planning to do, then this just isn’t the market for me to buy, and it makes more sense to me easy to come out and rent when I want to rent.’ We definitely had a handful of those people.”
At the same time, Skinner said there are other buyers who may not be as affected by the new regulations.
“On the other hand, we also had a good number of people who were really looking for second homes that they only wanted to rent occasionally, and for Summit County, the 135-day cap really didn’t bother those specific people,” Skinner said. “So we had kind of a mixed bag there. I can’t say it went totally one way over the other.”
Skinner said some of her clients looking to invest in the market through short-term rentals saw revenue shrink and that type of clients dwindle.
Wallace predicted these regulations could have a whole new effect on the market when it comes to who is buying the bulk of the county’s housing stock.
“I think we’re starting to see a shift to a different type of shopper in Summit County and Breckenridge, and that could end up putting us in a situation where the only type of shopper who can buy here is someone who has cash or got a loan, but they can take the loan without offsetting it against the rental income,” Wallace said.
As for inflation, all three agents said it is likely to further crowd out local buyers. Typically, local buyers account for less than 30% of all transactions each month. This was the case in January, a month when buyers accounted for 20% of all transactions. In February, 24% of transactions were from locals, and in March this figure only slightly decreased to 23%.
Even rising interest rates are not helping local buyers. Again, all three realtors agreed that rising costs will crowd out locals hoping to buy a home in Summit County.
“I would say half of the people who thought about borrowing money might not,” Brüggemeier said. “Their purchasing power has dropped just enough that they can no longer buy what they want.”
Wallace pointed out that in January and February, the number of deals that were cash transactions was about 26%. In March, this rose to 44%.
“I think the biggest thing, first and foremost, is that inflation doesn’t affect everyone equally,” Skinner said. “The people with potentially lower incomes, things like that, inflation hits them a lot harder than people in a different price bracket.”
For the remainder of the year, Skinner, Wallace and Brueggemeier said they all expect the market to gradually cool off. Already there aren’t as many listings for a single property as there used to be, and prices seem to be stabilizing too.
“I think it’s going to be a cooler year and maybe a slower year and possibly less sales but I think it’s still going to be positive in terms of appreciation and just not anywhere near what we’ve had in the past – so low, Single-digit appreciation,” said Brüggemeier. “We will see.”