March marks the end of the 3rd year since the country was locked down due to the Coronavirus pandemic. A lot has happened in those three years. Initially real estate activity came to an abrupt halt, along with most everything else. Real estate became an essential service and we were allowed to show property again. Many showings were virtual and in person showings needed masks and gloves. It wasn’t long before the demand for Summit County properties soared. Real estate reached record high sales as well as record high prices. Unfortunately, inflation also skyrocketed causing the Federal Reserve to raise interest rates very quickly in an attempt to keep it in check. Mortgage rates doubled in just a few months and real estate sales once again slammed on the brakes. Now that we have been in a higher interest rate period for a little while, it is beginning to feel like the real estate market is not as bleak as it once seemed.
Supply and demand
Demand is substantially slower than it was during the pandemic. That’s to be expected. Those were ridiculous times. 2022 residential sales were slower than any year since 2013. After the first quarter of 2023, however, residential sales are only down 13% from 2019 Q1. Inventory has nearly doubled from record lows during the pandemic but is still just over half of inventory levels from the beginning of 2019. We still have less than half the inventory needed for a balanced real estate market. That low inventory will be keeping us in more of a seller’s market and keeping prices from coming down much. Residential inventory should continue to build through the spring and summer months but demand should also grow. We will likely remain in a seller’s market through the fall, if not longer.
March real estate sales
March residential sales in Summit County totaled 91. That’s a 17% decrease from March 2022, a whopping 49% slide from March 2021, and just two sales lower than March 2020. Remember, March 2020 was the beginning of the pandemic. Everything shut down and the only sales happening were those already under contract. These stats may make you think the sales we had this March were dismal. Really, if you look at pre-pandemic sales, 91 sales, while on the low end, isn’t all that bad. March sales from 2014 to 2019, a five year span, averaged 107.
Residential real estate sales pace slowing
The pace of residential sales in Summit County has slowed substantially. In March, only 53% of properties went under contract within the first 30 days of being on the market. If it wasn’t for the out of control, pandemic market we just experienced, 53% would be a respectable statistic. Think about it, just over half of the properties that go up for sale are selling in the first 30 days.
Average sale price over last 12 months
These average sale prices are for residential properties in the Summit County multiple listing service that sold from April 1, 2022 through March 31, 2023.
- Breckenridge: $1,662,013 with 423 sales
- Copper Mountain: $1,102,783 with 55 sales
- Dillon: $883,846 with 137 sales
- Frisco: $1,228,040 with 135 sales
- Keystone: $1,058,368 with 205 sales
- Silverthorne: $1,078,764 with 372 sales
Homes under a million dollars
Most of the residential sales in Summit County in March were under $1,000,000. 56 of March’s 91 sales, or 61.5%, sold below a million dollars. In contrast, only 30% of the homes for sale are priced less than $1,000,000. As a result, homes priced under a million are selling faster and for slightly closer to list price.
The summer real estate market in Summit County
As we head into the second quarter of 2023 I find myself optimistic about the state of the real estate market. Yes, sales are slower. Perhaps they are even a little slower than our typical year. However, regardless of all the data stacked against it, real estate sales are still pushing forward. Summer is our selling season in Summit County. These summer months will be the critical months that determine the health of the market for the year.