During the third quarter, the absorption rate has decreased from 76 to 72 percent. This decline is mirrored by a 38 percent decrease in listings from 2021 to 2023, which has also led to a 48 percent drop in transactions. These statistics raise an important question: what has happened to the demand?
The data indicates that demand was unprecedented 2021 and 2022 and has begun to normalize. A significant factor contributing to this shift has been the impact of the COVID-19 pandemic. Many individuals have opted to leave major cities and seek refuge in Steamboat Springs, driving up demand. However, as the effects of the pandemic have gradually subsided, real estate prices are beginning to normalize. This normalization is evident in the market’s current state, suggesting a more stable and balanced approach.
In light of these developments, it’s essential to adopt a measured perspective and consider long-term investments. It takes both buyers and sellers for the real estate market to function; without a balance, it would struggle to thrive. Notably, in the first three quarters of 2023, the number of listings available has reached its lowest point since records dating back to 1995, with an average of 355 listings for the first three quarters of 2023. Because of low inventory and good demand, prices have remained steady.
Taking a closer look at the specific details of the third quarter, we find that one key factor influencing buying and selling decisions is property utilization. Typically, families may shift their property preferences, either downsizing as their children graduate or upsizing to accommodate growing families and grandchildren. However, rising interest rates have compelled potential buyers to carefully evaluate their mortgage options, as rates have seen a substantial increase, impacting affordability.
“Although the market was steadily improving from the great recession of 2008, the covid pandemic accelerated the market for two and half years, now we are seeing a return to a more normalized pre- pandemic progression,” Doug Labor, ABR, ABRM, CEBA, CRS, ePRO, GRI, RRP
Residential listings have been consistently trending downward, with an average of 40 new residential listings in Steamboat Springs emerging each month. However, there is a glimmer of hope on the horizon, as more properties are starting to enter the market. We are currently in a transitional phase, marked by a slower pace of transactions and a departure from the robust demand witnessed in the past. This shift can be attributed to the higher prices of new properties coupled with higher interest rates, which may be beyond the means of the average consumer.
In summary, the real estate market in Steamboat Springs is undergoing a transformation. As we navigate this changing landscape, it’s important for both buyers and sellers to approach their real estate decisions with a long-term perspective, considering the evolving dynamics of supply and demand in this unique market. For more information check out www.buysteamboat.com