2023 Real Estate Year In Review: Summit County Sales Statistics & The Market Ahead
The 2023 real estate market statistics for the Summit Area are here, and they have a lot to share about why residential sales prices haven't dropped in the Colorado mountains, even though the number of overall sales is down from pandemic era highs. This year, I'll be dissecting the data even more in depth than usual to see how type of property, location, and age of property all affect sales price. There's a lot of graphs to follow, but bear with me to the end, where I'll break down what this all means for both buyers and sellers heading in to the 2024 market.
We're going to look at the Summit residential market divvied up into ten catagories - Single Family Homes or Condos (including townhomes and duplexes) - for each of our five main towns. As mentioned, this year, we're also taking a look at average sales price based on age of the property. For catagories in our market with a significant amount of new construction, you'll find additional break downs to compare properties built from 2018-2023 with properties built in 2017 and prior. I've highlighted some of the most interesting statistical tidbits as we go along, and again, end with an overall analysis. Let's get into it!
The Breck single family home market is the only place where newer construction prices fell from 2022 to 2023. Perhaps the cooling cost of building materials has allowed developers more flexibility on price? That being said, the prices and increase in number of new homes sales in Breck were still strong enough to bolster the whole catagory - overall average sales price is still up 1% year over year.
In 2023, new construction single family homes in Silverthorne had by far the highest sold price to list price ratio at 104%. No other area of the Summit market even cracked 100%. The trend towards mountain modern subdivisions like Angler Mountain Ranch and Summit Sky Ranch clearly has legs.
At 11%, single family homes in Frisco saw the biggest jump in average sales price of any of our 10 catagories. In my opinion, this is probably due to Frisco's perennial appeal to both full-time and part-time residents.
While Keystone houses saw a big, 33% jump in number of homes sold between 2022 and 2023, they also saw the lowest sold price to list price ratio in any catagory. At only 95%, it's apparent that sellers in Keystone had more of a tendancy to overvalue their property when listing. Is this because of a disconnect between buyers and sellers on the added value that comes (or doesn't come) with the ability to short-term rent? I'd posit that probably has something to do with it - especially in the 2.5M price range.
Silverthorne condo sales, when broken down by year built, appear at first glance to be a real, wild ride. With a nearly 60% difference in average sales price between condos built 2018-2023 and 2017-prior, you know this is one area where the stats aren't telling the full story. Anyone who has visited Silverthorne recently knows that the town is undergoing a major transformation with new, high end condo and townhome buildings lining a revitalized downtown. All of the Silverthorne new construction sales last year were located in this hub. In contrast, the vast majority of Silverthorne condos built prior to 2018 that sold in 2023 are located in the Wildernest subdivision. The biggest difference between downtown Silverthorne and Wildernest? Downtown is governed by the Town of Silverthorne and offers short-term rental permits. Wildernest is a part of unincorporated Summit County and is subject to a very strict county rental ordinance. Wildernest has also been hit with a rezoned wildfire district that disproportionately affected condo insurance policy rates.
Impressive stats coming out of Dillon this year. This area's blend of year-round neighborhoods and short-term rental friendly zones made for a healthy housing market, with improvements accross all statistical genres. At only 22, Dillon condos had the lowest average days on market of anywhere in Summit.
I thought property value was supposed to drop last year. So why didn't it?
2023 sales activity confirms that our market has been brought back to earth, and sales patterns are falling back into a pre-pandemic groove. Yes, the overall residential market saw it's first depreciation year since 2013 at a little under -1%. However, if we look at market updates throughout the year, we'll see that average sales price was down over -8% April through June (with double digit depreciation in some areas like Breckenridge and Silverthorne), average sales price by end of Summer crept up to -5%, and average sales price after our traditionally busiest closing months of September and October was up to -3%. Then, a strong final quarter filled with Buyers eager to get into a property before ski season and new construction closings pushed our average residential sales price to $1,314,947; only down -0.7% from 2022. Ultimately, inventory - while up in comparison to the pandemic era market - was still not high enough throughout the year to meet Buyer demand. Therefore, prices stayed high.
So what does this mean for Sellers?
The summer selling season is back in a big way. You can once again expect the summer months to have the highest inventory and the highest amount of Buyer interest. I predict that 2024's first forecast interest rate drops will align with the late summer, which will also amplify this trend. Since properties are sitting on the market for longer, you will face more competition when you list. Pricing your home right will be crucial, and pricing 'to sell' is still working to gain multiple offers and bidding wars. I am confident that every type of property is able to garner that type of attention if you are open-minded with your listing price and willing to look through your neighborhood's sales stats in depth. Alternatively, you might consider avoiding Summer's peak inventory months by listing in the spring or the fall if you have less wiggle room on sales price.
Full renovations will continue to pay off in 2024, as we've seen in the 2023 data that the average sales price for newer construction is over 25% higher than resale property. Renovation projects aren't always easy to manage, but you may decide that the significant dollar gains on your sale will be worth it.
Because average sales price remains so high, the most important thing to keep in mind as a seller in 2024 is the big picture. The equity you, along with most Americans, have in your property is still at an all time high. Looking at the overall return on your Summit investment should help you navigate any sticky details or compromises that come up in your real estate transaction.
So what does this mean for Buyers?
As a potential Buyer in 2024 , understanding what Sellers are going through above, will be indispensable to negotiating great prices and terms. As mentioned, mortgage interest rates are predicted to decline throughout the year. Lower interest rates will mean a larger Buyer pool and more competition, but don't let that scare you. Acting when your purchasing power is highest will benefit you more in the long run than avoiding competing offers in the now.
If your primary real estate goal is to find 'a deal', I have two suggestions.
The first is to consider starting your property seach now, or waiting until after next Sept/Oct. As we learned from the 2023 sales data, average sales price was significantly lower in the winter and spring, but steadily jumped through the summer and the autumn until it caught up with last year's peak prices. By avoiding the summer selling season, you may capitalize on Seller uncertainty during slower times and negotiate a lower price.
The second is to avoid newer construction and tackle that remodel yourself! Investing in sweat equity has always had a solid return in the Summit Area, but that's true now more than ever with properties of a certain age. While we ran numbers throughout this blog post pre and post 2018, I'd argue that the highest renovation returns will be found on property built before 2000 that hasn't been updated. Most Buyers we work with find property up to 25 years old outdated but liveable, and therefore allocate a higher market value to them. Older 'gut jobs', on the other hand, are prime opportunities to build instant equity. For the record, this is not a recommendation to look for a 'flip'. The Summit market has never been particularly amenable to investment flipping. Rather, this is a recommendation we often give to our clients who want to keep their purchase price low and secure favorable contract terms.
Finally, once you find a property of interest, we always look through that property's history via tax records and historical MLS data. If a Seller is stuck on a high sales price, have your Realtor look up when they purchased the property and roughly calculate how much equity they may or may not have. If the Seller purchased within the last year or so, they won't have the equity to justify a lower price. You may have to pivot from seeking a price reduction and look for different contract terms that could benefit you. If the Seller purchased in 2020 or earlier, this is an excellent opportunity to remind the Seller of their big picture, and encourage them to work with you on a mutually beneficial transaction.
Looking to the market ahead
No matter if you're buying or selling, there will be plenty of complexities to navigate in the 2024 Summit Area real estate market. Working with true local experts who are dedicated to client education is your best strategy to coming out ahead! We look forward to seeing what the new year will bring, and to hearing from you about how The Mountain Real Estate Team can support your goals in 2024.
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