Home News Short-term rentals, inflation and rising interest rates all had an impact on Summit County’s real estate market in the first quarter of 2022

Short-term rentals, inflation and rising interest rates all had an impact on Summit County’s real estate market in the first quarter of 2022

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This 6-bedroom, 6-bathroom luxury home in Brickenridge is one of many properties managed by Summit Luxury Estate. Summit County realtors say short-term rental restrictions, inflation and rising interest rates affected local markets in the first quarter of 2022.
Adam Parker / Summit Luxury Estate

When realtors are measuring how strong the Summit County market will be that year, they usually don’t make forecasts based on the first quarter of the year. Many agents point out all the properties that owners are still using during the ski season as a reason for the low trading this quarter compared to other quarters.

During the busy summer and autumn months for many agents, hundreds of transactions can occur within a 30-day period. However, Land Title Guarantee Co.’s January, February, and March reports show much less. In JanuaryThe county has accumulated 124 transactions. During February There are 107 transactions, MarchThere were 165 transactions.

Sales in January of this year were up 28% compared to 2021, while sales in February were down 10% compared to last year and sales in March were down 17%.

This has nothing to do with Richard Wallace, a broker and partner of Brickenridge Associates Real Estate.

“The number of land ownership is consistent with what we see in our office, with the number of properties sold in Summit County down 31% compared to the first quarter of 2021. This is important. Interestingly, the rise in prices has reduced the total dollar value by only 3%, even though the number of properties sold has decreased by 31%, “Wallace said. I am.

Wallace and other agents, including Ray Brueggemeier, broker and owner of Cornerstone Real Estate, and Anne Skinner, owner of the Skinner Team, said the momentum of this kind of appreciation is expected to slow. Short-term rental regulations I’m starting gear, Interest rates are rising When inflation The buyer’s wallet is a little thinner than usual. All of these factors are being demonstrated in countless ways in the Summit County real estate market.

So far, Summit County real estate transactions have fallen 31% in the first quarter. Local realtors say this isn’t surprising, as the summer and fall months are busy, while the first quarter of the year is usually late.
Jenna De Jong / Summit Daily News

For example, according to Skinner, short-term rental restrictions, especially the 135-day limit for county Type 2 licenses, do not affect all buyers in the same way.

“For us, it was honestly a fairly mixed bag,” Skinner said. “When it comes to short-term rentals, I’m sure there were some buyers who said,’If I can’t do what I’m planning, this won’t be a market for me.’ If you buy in, it makes more sense to come out and borrow when you want to. Certainly those people were only a handful. “

At the same time, Skinner said some other buyers were less interested in the new regulations.

“On the other hand, many people were really looking for a villa that they wanted to rent from time to time. In Summit County, the 135-day limit didn’t really bother those particular people,” Skinner said. rice field. “So we had a mixed bag there. It’s not a complete trend from one direction to the other.”

Skinner said he learned that some clients who wanted to invest in the market through short-term leasing had reduced earnings and depleted those types of clients.

Wallace predicted that these regulations could have a whole new impact on the market as to who buys most of the county’s housing stock.

“I think Summit County and Brickenridge are starting to see changes for different types of buyers, which means that the only type of buyers that can buy here has cash or intends to take out a loan. It’s a loan that can be absorbed without offsetting rental income, “Wallace said.

When it comes to inflation, all three agents said it was likely to further hunt down local buyers. Local buyers typically make up less than 30% of all transactions each month. This was the case in January, when buyers accounted for 20% of all transactions. While 24% of February deals came from locals, March deals fell only to 23%.

Rising interest rates don’t help local buyers either.Again, all three agents agreed to increase costs Overtake the locals I want to buy a house in Summit County.

“I would say that half of the people who think about borrowing money may not,” Brueggemeier said. “Their purchasing power is declining so far, so they can no longer buy what they want.”

Wallace pointed out that the number of closings, which are cash transactions in January and February, remained at around 26%. In March, it jumped to 44%.

“First and foremost, inflation doesn’t affect everyone equally,” says Skinner. “Potentially low-income people, such and inflation, have a far greater impact than people in different price ranges.”

For the rest of the year, Skinner, Wallace and Brugemeier all said they expect the market to cool gradually. Already, one property doesn’t have as many offers as it used to, and prices seem to be slowly stabilizing.

“I think this year will be a cool year, maybe a late one, and sales may decline, but it’s still positive in terms of gratitude and very different from what it was in the past. Very low. , Single.-Thanks for the numbers, “says Brueggemeier. “understand.”

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