The share of real estate deals will decline from 2021 to 2022, forming a buyer’s market for the first time since 2019.
But that doesn’t mean it’s a better market for local labor.
Two Summit County real estate brokers explained the situation, saying that a combination of rising interest rates, short-term rental restrictions and slowing development may have contributed to the decline in total purchases. .
Purchase volume is the total value of real estate transactions in a calendar year.
From 2020 to 2021, the purchase volume of Summit County real estate transactions soared. April, May and June brought increases of about 242%, 304% and 176% respectively.
Flickinger attributes this high percentage to high demand for Summit County real estate and a long period of low interest rates.
One theory he had for high demand was a population boom in the front range.
According to the US Census Bureau, as of April 1, 2010, the city of Denver had a population of 600,158. As of April 1, 2020, the population has grown to 715,522.
According to Flickinger, historically, 40% of the Summit County real estate market was Front Range buyers. With its growing population, demand soared.
Another reason the percentage was so high was “historically” low interest rates.
“This increases the purchasing power of everyone,” said Flickinger. “Interest rates were so low and unsustainable that the purchasing power of some people doubled him, if not tripled.”
Well, interest rates have risen. A few years ago he was 3%, now he is 5% in primary housing and 6% in secondary housing.
Comparing the spring and summer months of 2021, when the percentage surged, to the same months of 2022, Summit County real estate transaction purchase volumes have either barely increased or decreased significantly.
It increased only 2% in April, dropped 12% in May, and dropped sharply to 37% in June.
Coldwell Banker Mountain Properties real estate agent Leah Canfield said high interest rates have led to a decline in second-home purchases because many second-home owners in Summit County cannot afford a home without short-term rentals. she added.
In May, a summit committee of county commissioners voted to start the nine months. Short-term rental license moratorium.
In addition Town of Breckenridge votes In late August, we will approve a series of short-term rental regulations, creating specific short-term rental zones and placing limits on licenses.
Canfield reported seeing many interested buyers leaving Summit County once the possibility of a short-term rental license was out of the question.
So what are the implications of these changes in the market?
Canfield said active sales were up this summer from last summer, while pending sales were nearly halved.
“That means people have their properties listed and on the market,” says Canfield.
She and FIickinger said the trend could continue, creating a more lucrative market for buyers.
“This has created a healthier real estate environment where buyers and sellers are on an equal footing,” said Flickinger.
Instead of rushing to compete with cash buyers, primary buyers will have more time to adjust the deal to their liking, Flickinger said.
Still, Canfield said the price problem remains and will lead to more vacant homes.
“Unfortunately, that doesn’t necessarily translate to more opportunities for locals,” Canfield said.
There are more homes on the market, but only one single-family home listed for less than $1 million.
So while interest rates are rising and short-term rental regulations are slowing home purchases, the available housing stock offers more options for local workers who may want something more affordable. does not provide
“Because if a house averages $2 million and the homeowner has to rent $10,000, $15,000, $20,000 a month to cover the costs and the mortgage, that’s a lot for locals. Because it’s not affordable, anyway,” Canfield said.
So while Summit County’s real estate market has become more favorable to buyers, Canfield says if a buyer is on a budget, finding a home in the county, at the very least, will be difficult.