HOW'S THE MARKET
In Steamboat, Fall arrives in September. The month starts off similar to August with hot days and cooler nights, but by mid month, the leaves are changing and the temperatures slowly begin to drop. The brown trout begin to spawn and the elk and the deer begin to mate. It’s a magical time in Steamboat. Some may claim it's the start to “Mud Season”, but if you’ve spent much time in the Yampa Valley, you know it’s one of the best kept secrets.
New listings continued to increase through the summer. As of August 13, 2024, Routt County currently has 277 active residential listings, and there were 273 for the month of July. That’s up from 241 last month, and also up substantially from July of last year (160). The number of current pending listings (110), and pending listings for the month of July (72) has increased from June (52), and from July of last year (74). This indicates that activity is picking up slightly, which is not unusual once the summer comes to a close and school looms on the horizon. Closed listings county-wide in July, 2024 (47) remained flat from the prior month of June (46), and the month of May (46).
According to Freddie Mac, the national average for a 30-year fixed rate mortgage as of August 8, 2024 was 6.47%. This is on trend with what economists have been predicting. Remember, that as rates decrease, your buying power usually goes up. If you are considering a purchase in the next year, and you haven’t spoken to a lender in awhile, now might be a good time to reconnect. You may qualify for more than you think.
The practice changes from the National Association of Realtors, or NAR, settlement went into effect Aug. 17, 2024. There are two big changes that impact the industry. First, Co-op compensation offered to Buyer’s Agents from Sellers will no longer be posted in MLS. Additionally, before touring a home with a Realtor, Buyers now must sign an agreement outlining compensation. There are a plethora of other nuances from this settlement as well. Give your broker at The Group a call if you have additional questions.
As the summer winds down and the fall colors ramp up, we look forward to the opportunity to work with you and are thankful to be your trusted advisors.
A LOOK AT HOW PRESIDENTIAL ELECTIONS ACTUALLY IMPACT REAL ESTATE MARKETS
Every four years, the election seems to stir anxiety about real estate in the U.S., leading to some familiar questions:
- What will happen to housing prices?
- Will interest rates go up or down?
- Should I wait to buy or sell?
However, an analysis of recent election-year and post-election-year home sales data appears to tell us that we don’t have so much to worry about.
Here’s a snapshot of what we’ve learned from sources such as the U.S. Department of Housing and Urban Development (HUD), the National Association of Realtors (NAR), and the Federal Home Loan Mortgage Corporation (Freddie Mac):
- In nine of the past 11 elections, home sales increased the year after the election. The two post-election downturns occurred after the 1980 and 1988 cycles.
- In eight of the past 11 presidential elections, 30-year mortgage rates decreased during the four-plus months (July-November) leading up to the election. The exceptions were 1980, 1992, and 2016.
- In seven of the past eight elections, NAR reports that median home prices increased after the election.
HELPING KIDS TO GET ON THE REAL ESTATE LADDER
Hefty home prices, high mortgage rates and low inventory are among many challenges facing young buyers in today’s market. A survey by the National Association of Realtors found the median age of home buyers was 49 in 2023 – the highest on record.
An increasing number of parents are choosing to help their childern get ahead now, and not wait for inheritance. Families can help in a number of ways with options ranging from gifting a down payment, co-signing a mortgage, being the lender, buying the home outright for children or grandchildren, or jointly owning a property. Each option comes with its own benefits and downfalls.
For 2024, the annual gift tax exclusion is $18,000, which means someone can give up to $18,000 to as many people as they want without being subject to federal gift tax.
Taxable gifts can include cash, checks, property and interest-free loans. In the case of property, donors need to consider what is fair market value in order to avoid exceeding the annual gift tax limited. For example, selling your home worth $500,000 to your child for $300,000 will incur $200,000 considered a gift, therefore exceeding the annual gift tax limit, which is also deducted from your lifetime gift tax limit. Estates worth less than $13.61 million do not trigger federal estate tax.
In families where there are multiple siblings, it is advisable to maintain open lines of communication about financial plans to avoid later conflict. Often gifts and loans are structured as advancements on inheritance, with allocations made for each child. Making intentions known ahead of time can go a long way for the harmonious future of your family.
So, how can parents help their children get started in the real estate market?
- Gift money to cover all or part of the cost of buying a home from a down payment to closing costs. If the contribution is to secure a mortgage, lenders will need to see traceable checks, wire or bank transfers deposited into the borrower’s bank three to four months ahead of applying for a mortgage.
- Finance the mortgage, which means no closing costs or down payment is required. Benefits can include a higher rate of return for the lender than other investment options, while still keeping the interest rate lower than market for the borrower. In order to avoid the assistance being considered a gift, family lenders have to include the minimum interest rate based on the Applicable Federal Rate.
- Co-signing a loan is considered the riskiest option of all with the fact that all signees on the loan are responsible for repayment. Older borrowers are likely to have a higher credit score rating and not the too-high debt-to-income ratio of the younger generation. The risk to parents is their own credit being potentially affected if payments are missed, or the ability to obtain additional loans if needed for other big purchases.
WHY STEAMBOAT WILL NEVER BE ASPEN
In March 2024, Steamboat Springs made national and international news headlines for its high cost of real estate. Yet, despite the fact this remote corner of Northwest Colorado was dubbed ‘unaffordable,’ it remains to have one of the most reasonably priced real estate among the state’s most popular ski towns.
In April 2024, Aspen made its own headline with a record closing on a single-family home for $108 million. The 22,405 square foot home featured 11 bedrooms, 17 bathrooms, a guesthouse and heated pool on 4.5 acres. The highest price home ever sold to date in Steamboat Springs was $12.4 million for a four-bedroom, five-bathroom, 8,475 square foot property with guesthouse on 70 acres.
Record home sales to date for our closest mountain town neighbors were $17 million in Breckenridge in 2021, and $57.25 in Vail in 2020.
Best Places compares median home costs in Aspen to be 187% higher than Steamboat, food and groceries are 13.5% higher and cost of living is 108.2% higher. The median price per square foot in Aspen is $2,200 compared to $913 in Steamboat.
Mountain towns experienced a pandemic-fueled real estate boom, incited by second-home buyers, location neutral workers and short-term rental investors. Housing supply dwindled and real estate markets became highly competitive. In the 2023 Workforce Housing Report full-time occupancy in Steamboat and Aspen ranked almost identically with 55% for the former and 56% for the latter.
Steamboat Springs has traditionally been a more affordable option for those seeking a mountain town lifestyle, and it remains that way. However lower cost is not the main driver for those moving to Routt County. It is first and foremost a ranching town with a ski area, and not a ski area with a purpose-built village, like many of its counterparts.
Ryan Stone a managing partner at East West Partners, developers of the Amble, a $200 million project with a 42-unit condo building in Steamboat said in a recent interview to Mansion Global, Steamboat has its own version of luxury that he calls “undercover luxury.”
That subtilty is appealing for the influx of new residents coming primarily from Miami, Dallas, Chicago, New York and San Francisco.
“We looked at a lot of towns before settling on Steamboat,” says Dennis Alderman, who moved with his family from Chicago two years ago. “We were treated like friends not strangers from the get-go, which we didn’t find in other places and that sold us on why we picked here.”
Steamboat is an outdoor paradise, where people come to play and not to be seen. Unlike Aspen with its land constraints and higher cost of construction, there is still room for growth in Steamboat, where the value of community remains priceless.
WALK TO END ALZHEIMER'S
The Group will once again sponsor and form a team for the Walk To End Alzheimer's event.
This event benefits the Alzheimer's Association, which does incredible work, including caring for, supporting, and funding research for those with Alzheimer's and their families and caregivers. The Yampa Valley Walk is a wonderful event that raises awareness and allows donors to contribute to the Association's amazing work. You can join our team and/or donate at http://act.alz.org/goto/thegroup.
Join us on September 7th at 9:00 AM at West Lincoln Park, with the walk starting at 10:00 AM. For more information, visit www.alz.org.
WINE STORAGE UNCORKED
Wine is a persnickety thing when it comes to storage. It likes consistent temperature and humidity levels and does not do well with direct sunlight. At high altitude, these factors can prove problematic which is why proper storage conditions are key.
At high altitude the air is drier, and temperatures fluctuate with the seasons from snow in winter to heat in summer. Did you know wines “open-up” at a slower pace because of the reduced oxygen levels in the air?
For bottles which are intended to be kept, the ideal temperature to prevent changes in flavor and aromas runs between 45 – 65 degrees F (55 degrees F is deemed ideal). A kitchen fridge is therefore far from optimal with frequent opening and closing of the door causing fluctuations.
Humidity levels should be maintained at 70% with no exposure to direct sunlight. The sun’s UV rays can cause premature aging and will fade labels over time. Wines with corks should remain on their side to prevent the cork drying out.
Wine storage solutions are no longer limited to the idea of a darkened cellar in the basement. Entry ways, stairwells and living spaces are being transformed with glass fronted wine rooms doubling as a modern art piece. Smaller areas and idle nooks prove a viable option to hold prefab wine storage which can be ordered and comes ready to install.
The Five Things to Consider When Designing a Wine Room
- Bottle capacity: The amount of space needed is affected by the number of bottles and type of racking chosen.
- Racking style: Consider your home’s style, the size of the space and the angle at which you will view the bottles. Vary the size and angle of racks or pegs to accommodate specialty bottles and magnums as needed. Variety can add visual interest and function to the overall aesthetic.
- Insulation and temperature regulation: The room requires sealed insulation in the exterior walls for the cooling system to function properly. Red wine should stay around 55 degrees.
- Door style: Contemporary glass doors make the space a showpiece while a closed in area with rustic wood doors enables an Old-World feel. When sizing for the cooling system it is important to account for the type of door as glass can reduce the insulation rating.
- Lighting: Consider a combination of task and accent lights. Small LED strips can be integrated into the racks to highlight rows of bottles. Some homeowners choose to incorporate a piece or two of art to enhance the overall aesthetic, and placement should be considered to accommodate display lighting.
For further tips on everything wine related from food pairings to the latest production methods, tickets are on sale for the annual Steamboat Food and Wine Festival, October 3-5, 2024, at www.SteamboatFoodAndWine.com