We have had a great winter season with some signs that the market may have begun the healing process. Many short sales and foreclosures are in the process of being purchased by some savvy investors and the majority being end users who have wanted to invest in the Crested Butte market for years. At the beginning of 2008 we had 25 properties in foreclosures in the entire valley. The latest foreclosure list is 10 pages long with a total of 69 properties. The difference now being that many of these properties are under contract or have numerous offers creating bidding wars. Having buyers with cash or extremely good credit to purchase these distressed properties is the first step to have our market begin the healing process. I have attached graphs depicting the current under contracts and solds up to today. Many of the short sales do not show up on the MLS, they remain as active due to their ability to accept multiple offers. Therefore the graphs I have attached do not depict all of the current activity but will give you a good sense to what is currently happening. I personally have 10 short sale contracts active and know of many other agents with a few in the works as well.
If you review the last four years of sales a very interesting point stands out. Condominiums declined drastically in 2008 and are currently showing slight signs of improvement this year. I account this to the fact that many investors had purchased numerous condos in 2004 because of the sale of the resort with the mindset that they would flip these properties in two to three years. Many of these properties are what you currently find on the foreclosure list. The fact that there is slight improvement in median sales prices of condos now is that many of these properties are being purchased once again at great prices. In 2008 the average discount off list price was 13.5% whereas so far this year it is 8.1%. I am finding that buyers now are not investors,/speculators but rather end users purchasing only one property. This ultimately will make for a much more stable market as inventory drops and these end users hold onto their investments for many years.
The average median home price for homes sold in the valley reached an all time high at the end of 2008 but has dropped drastically in the first five months of this year. I account this to the fact that the majority of single family owners that have purchased in the past were end users with strong holding power. The majority of distressed single family homes that are now being purchased are below $1mil leading me to believe many of these previous owners are locals or investors who got over their heads with adjustable rate mortgages that have expired. With only one single family home above one million sold so far this year compared to 17 for 2008 shows that the lower end homes are being purchased due to their distressed nature. On the other hand we have seen some drastic price reductions on some of the high end homes and I believe it may be the best time to negotiate a great price on one of these homes. In 2008 the average discount off list price was 8% whereas so far this year it is 16%.
I have included a link below to some of the best opportunities in the valley. These are just a sampling, so please let me know your specific area so that I can do a more detailed search for you.
Benson Sotheby’s International Realty
P.O. Box 210
433 Sixth Street
Crested Butte, CO 81224
970-325-3219 World Wide Cell
Some interesting news on the current state of the national real estate market below:
Cash is king, this may be the reason high end home sales are currently slow in the valley: