CO Short term rental elections 20% tax rates approved, what are the results and what does this mean to you and Colorado ski real estate?
Regardless of party affiliation, this has been a big voting season for Colorado real estate…
The amount spent on real estate in six of Colorado’s resort-anchored counties doubled from 2019 to 2021. Average prices in Eagle, Grand, Pitkin, Routt, Summit, and San Miguel in 2021 were up 57% from 2019. Where does Colorado ski real estate go from here? Have we reached a peak?
By any measure, the sales numbers in Colorado ski towns are breathtaking. Take for example, Summit County, home to Breckenridge, Keystone, Copper, Frisco, etc… the median home price has skyrocketed 41% in one year from $1.6m to $2.2m. This is huge growth is not limited to just single family homes, condos/townhomes are up a staggering 30% with the average sales price almost $800k.
This growth has been repeated in ski towns throughout Colorado including Telluride, Vail, Aspen, Steamboat, Crested Butte, etc… on every property type from raw land, condos, townhomes, single family, etc…
There are five primary factors that have driven Colorado ski real estate through the roof.
There will be both short term and long-term impacts on ski real estate depending on where the economy goes, inflation, interest rates, etc…
Short term: I think Colorado ski real estate will remain healthy through the summer as there is still considerable pent-up demand and limited supply. I don’t see a rerun of 20-40% appreciation this year in most markets. I suspect as the fed raises rates and the economy cools in the second half of the year that Colorado ski real estate will also slow. I don’t foresee any drop in prices, merely a substantial slowdown in appreciation.
Long term: There will be considerable slowing of the ski markets and the 20-40% appreciation will end. As the economy slows, inflation continues, and alternatives abound this will impact Colorado ski real estate. I see appreciation for the next several years basically flat. I don’t see much downside risk as there is no available inventory, most properties are bought with cash, and there will still be a desire to live/play in the various ski towns and also hedge against inflation with hard assets.
Although ski real estate will slow considerably it will likely still outperform other real estate markets due to the high build costs, low inventory, and high percentage of properties bought in cash. Unfortunately although Colorado ski real estate will outperform other markets, this needs to be taken in context. There will be a real estate correction in the coming years as many markets will reset with 10-20% declines. Ski real estate will likely do better than the national average by basically staying flat or if the economy gets really bad due to inflation, recession, etc.. will lose less.
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Written by Glen Weinberg, Owner Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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