We’ve had some surprising shifts in our market in 2018 through the first 3 quarters of 2018. Like all markets, pricing and volume is dictated by supply and demand. In a real estate market, supply is the inventory, or number of listings on the market. Demand is the number of transactions, or absorption of the available listings.
We sat down with Doug Labor, Steamboat Sotheby’s International Realty broker, manager of the downtown office on 9th Street and local statistician, to get the run-down.
Through the 3rd quarter of 2018, the market carried the 3rd lowest number of listings in the history of the Steamboat Springs Multiple Listing Service (dating back 1985). The 1134 listings for the first three quarters of the year post a 7% decrease from the same time period in 2017.
Surprisingly, in a highly active market, transactions dropped 9% when compared to the same period in 2017, to 960. This is most likely due to the limited availability of properties. In theory, if there were more listings, then there would have been more transactions.
Days on market, which is a benchmark most real estate practitioners use to help measure demand, was noticeably shorter. However, brokers agreed that it is taking longer for buyers to find properties than in the immediate past, due to the low supply.
Dollar volume increased 2% year over year, to $573M, which was the second highest in MLS history.
The dynamic between listings (supply) and transactions (demand) is what is referred to as absorption rate. Absorption rate is tracking at over 120%, meaning that there is more product being consumed than what is being added to the market.
Because of supply not being able to meet demand, property values and the average purchase price have gone up. The average purchase price jumped an amazing 12% year over year, to almost $600,000, the 3rd highest that the market has seen.