FRISCO approves at first reading STR caps and further amendments and requirements.

Last Night the Town of Frisco approved a 25% cap on Short-term rental licenses within the Town on first reading. The current level is at just under 22%, leaving little room for growth in license applications.

Summit REALTORS® President Steve Fisher commended the Frisco Town Council for their efforts to collaborate on this substantive piece of STR regulations.  Summit REALTORS® advocated for a cap higher than 25%- such as 30%- but is pleased with ongoing conversations about the issue and that we were able to provide suggested changes that Council accepted. The Council clarified that they would actively monitor the cap, and if the policy needs to be adjusted, they will look at it.  The final vote on the ordinance will occur on Thursday, October 11^th. The ordinance will go into effect in November, after a 30-day curing period.  Many thanks to the REALTORS® who attended the meeting, in-person and virtually, and made cogent arguments regarding the ordinance.

SAR Leadership is happy that thanks to meaningful conversation, the Town is allowing properties under contract before October 11^th to obtain a license.   The Town allows units under construction to get STR licenses as long as they are submitted for a building permit and under review by October 11th.  We are also pleased that the transferability of STR licenses is fairly defined in the ordinance.  Again, pointing to the diversity of the financial stack and the varied ownership structures, closing the door on transfers of licenses in unique circumstances, such as LLC's and family situations, would be an unnecessary market disruption.

As REALTORS®, we like to find solutions to complex real estate and property issues such as these.  We fully intend to work with the Town of Frisco in a positive manner in the months and years ahead.

The Frisco Town Council voted to approve with one dissenting vote by Council Member Andy Held,  at first reading the following:

Agenda Item #2: Estimated Start Time 7:20pm First Reading Ordinance 22­10, an Ordinance Amending the Code of Ordinances of the Town of Frisco, Colorado, by Amending Chapter 110, Concerning the Licensing of Business, at Section 110­38, Concerning the Requirement for a Short Term Rental License; and 110­39, Concerning Short­Term Rental License Application, Term, Renewal and Non­Transferability; all in Order to Establish a Limit on the Total Number of Short­Term Rental Licenses Issued by the Town. 

A copy of the full ordinance 22-10 can be found on page 158 of the Town of Frisco packet which can be found here: 

https://www.friscogov.com/your-government/councils-and-commissions/council-and-commission-meetings

You can view the testimony here: 

The vote begins at the 4:00 mark.

https://m.youtube.com/watch?v=5QBOe3T0rfE

Short-term Rental (STR) Regulations are still changing here in Summit County. The next Domino's to fall will likely be the towns of Silverthorne and Frisco. If you're looking to buy real estate and become a short-term rental host, I would encourage you to act quickly. Existing license holders are likely to have a leg up on holding their licenses while new applicants will face new challenges or be barred completely. 

Short-Term Rental licenses are controlled by the officials in the jurisdiction of the property. Please keep in mind that the towns only control within their own town limits and some properties may appear to be in one town but are actually in Unincorporated Summit County. For example, many properties have a Breckenridge address but are not in the town limits of Breckenridge. If you're ever unsure just reach out and I can look up what jurisdiction a property is in or I can set up a search for only rental eligible properties. 

Please also keep in mind STR licenses are subject to various license fees and sales taxes on rentals. 

Breckenridge

The Town of Breckenridge has capped rental licenses at 2,200 non-exempt licenses. There are currently around 4,000 STR licenses issued, meaning new applicants will need to join a wait list for what will likely be several years before new licenses are issued. 

There are however "exempt" properties which do not contribute to the cap of 2,200 licenses. The town has stated that they recognize these buildings were built for the intent of short-term rentals. Many of these properties function more like a hotel than a condo building and must have an on-site front desk, 24-hour monitored phone system, and a 24-hour on site security. Due to being exempt, these properties have recently experienced a disproportionate price appreciation. The exempt condominium complexes are listed below: 

• BEAVER RUN RESORT
• BLUESKY
• THE CHATEAUX
• CRYSTAL PEAK LODGE
• GRAND COLORADO ON PEAK 8
• GRAND LODGE ON PEAK 7
• GRAND TIMBER LODGE
• HOTEL BRECKENRIDGE - MOUNTAIN VALLEY LODGE
• MAIN STREET STATION
• MOUNTAIN THUNDER LODGE
• LIFTSIDE CONDOS
• ONE SKI HILL PLACE
• RIVER MOUNTAIN LODGE
• VALDORO MOUNTAIN LODGE
• VILLAGE AT BRECKENRIDGE
• WATER HOUSE

For more information on Breckenridge Short-Term Rentals visit: https://www.townofbreckenridge.com/your-government/finance/short-term-rentals 

Blue River

The Town of Blue River has so-far resisted the pressure to restrict short-term rentals.  However, the town limits of Blue River are a relatively small area. Areas people refer to as Blue River may actually be in Unincorporated Summit County. Permitting is still required.

For more information on Blue River Short-Term Rentals visit:https://townofblueriver.colorado.gov/lodging/short-term-rental 

Frisco

So far Frisco has yet to restrict short-term rentals but that is about to change. The town is expected to pass measures limiting short-term rental licenses to between 22-25% of the total number of housing units. Currently Frisco's housing is about 20% short-term rentals. Meaning if this measure passes there will be a small amount of growth still available but expect it to be absorbed quickly. 

For more information on Frisco Short-Term Rentals visit: https://www.friscogov.com/departments/finance/sales-and-lodging-tax/short-term-rental-license-application-process/ 

Silverthorne

Like Frisco, Silverthorne has so far not enacted a restriction on STR's but are expected to do so soon. Silverthorne is expected to cap STR's at 50% of total housing in the downtown corridor and only 10% in most other neighborhoods. If this plan passes, there will be approximately 400 new STR licenses up for grabs. 

For more information on Silverthorne Short-Term Rentals visit: https://www.silverthorne.org/town-government/finance-administrative-services/short-term-rental-licenses

Dillon

The Town of Dillon has yet to restrict STR licenses and is currently not expected to do so. However, the town did take a hit at occupancy on March 1, 2022. Rentals are now restricted to an occupancy of 2 persons per bedroom + 2 additional people. So a two-bedroom condo is restricted to a maximum of 6 occupants. That alone is as much occupancy as a reasonable host would want in their property anyway. However, to further limit occupancy the town also requires the owner provide 1 parking space per bedroom or reduce occupancy. I will note that most three-bedroom properties only include 2 parking spaces. Owners can rent an additional parking space from the town at a rate of $300. 

Compared to other towns the Town of Dillon has a higher percentage of locals or second home-owners who do not rent which is why the focus was on occupancy. Limiting occupancy reduces the complaints of issues arising from STR's. However, as other towns limit STR licenses Dillon will undoubtedly become a focus for buyers looking to rent. In the coming years I predict more pressure will come on the town to limit licenses. 

For more information on Dillon Short-Term Rentals visit: https://www.dillonco.gov/business/dillon-short-term-rental-str 

Keystone

Although Keystone technically falls under the jurisdiction of Unincorporated Summit County, the county has recognized Keystone as a Resort Overlay Zone. This means they recognize the area was built and intended for visitors. Thus, properties are eligible for short-term rental licenses with no cap and no cap on nights. 

For more information on Keystone Short-Term Rentals visit: https://www.summitcountyco.gov/1221/Short-Term-Rentals

Copper Mountain

Copper Mountain falls into the same regulations as Keystone. 

Although Copper Mountain technically falls under the jurisdiction of Unincorporated Summit County, the county has recognized Copper Mountain as a Resort Overlay Zone. This means they recognize the area was built and intended for visitors. Thus, properties are eligible for short-term rental licenses with no cap and no cap on nights. 

For more information on Keystone Short-Term Rentals visit: https://www.summitcountyco.gov/1221/Short-Term-Rentals

Unincorporated Summit County

On December 19th, 2021 Summit County passed new rental regulations which capped the number of nights for most properties. Those rules can be found here. These rules seemed like a very reasonable approach to STR's but unfortunately the county officials  quickly decided not to give them a chance to play out. 

On May 24th, 2022 the county placed a moratorium on new licenses until February 24th, 2023. No new licenses will be issued during this time frame. The moratorium does not apply to properties in a Resort Overlay Zone including Copper Mountain and Keystone. The county is expected to pass new stricter rules prior or subsequent to the expiration of the moratorium. These rules will probably include caps on the number of licenses. 

For more information on Unincorporated Summit County Short-Term Rentals visit: https://www.summitcountyco.gov/1253/STR-Regulations 

*Information is subject to change and should not be relied upon. Please consult the appropriate jurisdiction before making any real estate or financial decisions. A directory to each jurisdiction can be found here. 

From our friends at Fairview Lending. All opinions are that of the author. 

Depending on the Colorado ski town, cash transactions make up between 30-75% of all closed transactions.  With this many cash transactions, what do rising interest rates mean for sales in the various ski towns.  Will there be a slow down  in ski real estate like we are seeing in other markets throughout the country?

Why would cash transactions be impacted by rising interest rates?

It seems counterintuitive to think that interest rates would impact cash transactions, but they do.  Most “cash” transactions use some form of leverage.  For example if someone were buying a home in Steamboat or Aspen, in order to close quickly they likely would pull money of a  line of credit (unsecured, secured by stocks, secured by another house).   This is typically short term and then they would put longer term financing in place.  With interest rates around 3% less than 6 months ago, this strategy worked great especially with interest rates as low as they were.

Rising interest rates change the cash equation

With rising interest rates even cash buyers are impacted. As mentioned above the overwhelming majority use some sort of leverage.  As interest rates have risen so rapidly and are expected to continue everyone is impacted even the person buying a 3 million second home in “cash”.

Rising interest rates are a “symptom” of the economy

Although rising interest rates are driving considerable behavior changes, they are not the only variable at play.  For high-net-worth borrowers, we have also seen substantial losses in the stock market and an uptick in talk about a recession.  Although interest rates are a large driver, I would be remiss to say that they are the only driver slowing down high-end ski real estate.  General economic conditions including a reset in the stock market along with recession talk are also large contributors to the slow down in real estate prices.

What do rising interest rates mean for Colorado ski real estate sales and prices?

As interest rates continue to rise, even Colorado ski towns with a substantial number of cash transactions will be impacted.  In Aspen, June signed contracts for single-family homes plummeted 71.4% year over year, with new listings rising 33.3% in the same period. Signed contracts for condos dropped 80% compared to last June.

Summary

I see most mountain towns values coming in flat to a 5-10% decline over the next 6 months or so. Remember this is after multiple years of 30% plus gains in many of these markets.  As we are seeing in Aspen and various ski towns, there is definitely a change in the air and one of the prime culprits is higher borrowing costs.  The higher rates will even impact the most expensive markets in the country like Aspen that has one of the highest percentage of cash transactions.  On the flip side, the good news for basically every mountain town is that there is not much new inventory coming on the market which should limit the downside risk

The towns of Frisco and Silverthorne will be the next to crack down on short-term rentals. Here's an update from the Summit Association of Realtors Executive Director about what to expect. 

SILVERTHORNE:

The Town of Silverthorne will host 3 Open Houses on Monday, Sept. 12 to get feedback from the Public on a proposal to cap STR's at 10% in most neighborhoods around Town. The other areas in the Town Core and along the river will be capped at 50%. This proposal will allow 400 additional STR permits.

Please plan to attend an Open House on Monday to give your input! There is also a short survey you can take.

Short-Term Rental Open House

• Date: 09/12/2022 7:30 AM - 6:30 PM  
• Location: Silverthorne Pavilion
  400 Blue River Parkway
  Silverthorne, Colorado 80498

Share your thoughts on short-term rentals in Silverthorne by attending an Open House on Monday, Sept. 12 at the Silverthorne Pavilion. Town staff will be on hand to discuss the concept of capping the number of short-term rentals in Silverthorne from: 

• 7:30 to 9:30 a.m. 
• 11:30 a.m. to 1:30 p.m. 
• 4:30 to 6:30 pm.

Light refreshments will be available at all open house times.

You can learn more about short-term rentals in Silverthorne and take a quick online survey here. 

FRISCO

The Town of Frisco will have an update on an ordinance to cap short-term rentals at 22%. The staff recommends the ordinance change from a 22% cap to 25% due to a Court of Appeals ruling in New Orleans. The Town previously wanted an exempt status for local homeowners to be able to rent out their properties when they go on vacation.   The Court of Appeals in New Orleans struck down a similar ordinance in August. Staff also suggests that Tuesday night's first reading and vote on the ordinance be tabled. The Town currently has 20% STR's. 

The Town has made it clear they would like to hear from all affected communities. Please plan to attend the Council Meeting on Tuesday, Sept. 13^, at 7:00 pm.

SAR will issue a formal Call for Action on Monday, but we want you to put the date and time on your calendar and plan to attend!

Attached are the staff memo and the Court of Appeals ruling. Below is an article to the New Orleans ruling:

https://www.usnews.com/news/politics/articles/2022-08-23/new-orleans-short-term-rental-rule-struck-down-by-court

It's no secret the Fed's plan to slow down the real estate market is working. Here's what's happening in Summit County

The high Number of new Listings is Normal

In June 2022 the Summit County MLS had 483 new real estate listings. If you've been subscribed to my real estate listing alerts, it may have seemed like everything is on sale. However, that's only because we were bouncing back from a near record low number of listings and we're finally seeing a slow down in demand. But in reality, June is always the busiest month for new listings in Summit County. 

Active Listings are up but Inventory is still low

There has not been this many available mountain properties for sale since August of 2020. But the June numbers of 1,110 Active Listings is still relatively low compared to our pre-covid inventory numbers. As I mentioned above, June is always the highest number of new listings so even if demand just stays flat, expect active listing numbers to trend back downward. 

Months Supply of Inventory is up, but still low

Months Supply of Inventory is calculated by determining the number of homes sold per month and dividing by the total number of properties for sale on the last day of the month. Much like above, we're headed back towards a more normal level of supply but Summit County is still historically low. 

What's happening with pricing? 

June 2022 price per square foot is up 19.2% from June 2021 but we are seeing a slight decrease from the April 2022. If I had a crystal ball, I think the April high would be the record for around the next year. We should get back to a place where negotiations can occur between buyers and seller. However, I am not predicting a long-term large price drop. 

According to the Pulsenomics 2021 Q3 Home Price Survey. Prices are expected to continue to appreciate until 2025. With most of the appreciation having already occurred, and modest appreciation to follow. If you're looking to purchase, this means waiting will cost you, not just with home price but also with interest rates continuing to rise until Summer 2023. 

Summary

We're getting back to a more normal market but that doesn't mean we're in a crash. Properties are going to take longer to sell but in the long-term there are still record high prices to be seen in Summit County. If you're ready to buy now, I think you're in a great place to negotiate below list price and look back at yourself like a winner. All that being said, we are in unique times with the treasury raising interest rate while entering a recession (normally it's opposite). I would not recommend overextending yourself for a second-home right now but if something is comfortably in your budget, go for it!

What's there to do in Summer? 

Concerts at Lake Dillon Amphitheater

My personal favorite! In 2018 the town of Dillon completed the long awaited remodel of the Dillon Amphitheater and it is now one of the most beautiful places to see live music in the country. Concerts typically start around 6 or 7 PM allowing a remarkable view of the sun setting behind Buffalo Mountain contrasted by Lake Dillon and your favorite performer. This venue continues to book more prominent performers such as The String Cheese Incident, Big Head Todd & the Monsters, and Del Mccoury. While Dillon Amp doesn't yet have the same notability as nearby Red Rocks, it is just as beautiful and significantly more intimate. Not only that but there are free concerts almost every week throughout the Summer. Check the schedule here: https://dillonamphitheater.com/ 

(When you see me at a show, come say hello and I'll buy you a beer!)

My fiancé Shauna and I waiting for String Cheese Incident to begin last week

Hiking

This one may seem pretty obvious but we have some of the most beautiful hikes in the state for every difficulty. Our very own Quandary Peak is one of Colorado's 54 "14'ers" and is a great starting point for your first of that list. Located 20 minutes south of Breckenridge is the Quandary trailhead, start early and bring lot's of water. For an easier hike, try Rainbow or Lilly Pad Lake. My personal favorite is Mount Royal which towers above Frisco, this is a short but very difficult hike which is great for a cardio workout before house hunting with me or hitting one of our brewerys.

Mount Royal, Frisco. Once you get to the Summit, traverse the ridge to the east for this lookout point.

Did somebody say "brewery"?

Yes! Summit County is home to 9 amazing craft brewers. In Breckenridge you will find Broken Compass brewing which is a great stop on your bike ride from Frisco. Additionally, we have the nationally distributed Breckenridge Brewery and Pub located in it's original Main Street home. My personal favorite is Highside Brewing in Frisco but if you're hungry I highly recommend The Bakers' Brewery in Silverthorne for both delicious food and drinks.

Let's not forget a shoutout to the two distilleries in Summit County, Breckenridge Distillery and the newly opened Rising Sun Distillery.

Check out this massive 3LB plate of Nacho's at Dillon Dam Brewery. I recommend the "Here's your Dam IPA"

Bike down Vail Pass

A fun family activity can be had by shuttling bikes to the top of Vail Pass, from there it's an easy downhill ride back to Frisco on the dedicated recreation pathway. You will cruise by Copper Mountain before winding through 10-Mile Canyon. You will need to park one car with bikes at the top of Vail Pass and one car near Frisco Main Street, or call a local bike shop to enlist their professional bike shuttle drivers. Take a look at the video below from Pioneer Sports.

Boating and water sports on Lake Dillon

The towns of Dillon and Frisco have some geographical advantage for summer fun due to their locations bordering Lake Dillon. Both towns have marinas and a respective tiki bar to go with each. Both marinas have boat rentals ranging from paddle boards and kayaks all the way to a boat for you and your friends. Due to the cold water temperature swimming, wake boarding and water skiing are not allowed on Lake Dillon but Frisco Marina has a great beach where you can get your feet wet!

White Water Rafting

The nearby towns of Buena Vista and Salida offer more rafting options than you can count for a quick day trip. As one of the most popular rafting locations in Colorado you will have your pick of guides and you will be back home in Summit County in time for Dinner. For a more adventurous half-day trip, try the Lower Blue River in Silverthorne with KODI Rafting. If you have young children or just want a tame day on the water opt for the Upper Colorado River.

https://whitewatercolorado.com/?utm_source=GMB&utm_medium=Organic

Fly Fishing

Summit County is all about the Blue River and there are plenty of great spots to cast your line. I'm not a fisherman personally but checkout "The Steps" near the Breckenridge Recreation Center or along the Lower Blue River near the Silverthorne outlet malls. If you want to catch rather than fish, hire a local guide to take you through "Jurassic Park" on a drift boat.

Summer Concerts and Festivals

I already mentioned the great concerts at the Dillon Amphitheater but we can't forget to mention the free concerts every Thursday at the Frisco town park, First Friday of the month in Silverthorne at Rainbow Park, and Riverwalk Center in Breckenridge. For events our resorts host a little of everything the Breckenridge Wine Classic, Oktoberfest, and even a Mac and Cheese Festival in Copper Mountain.

One of my favorite events is the Frisco BBQ Festival but due to fear over COVID-19, that festival's future is unclear. Let's hope to see it in 2022!

Traditional Oktoberfest outfits are a must.

Thank you for reading, let me know your favorite Summertime mountain activities.

If you're ready to start your search for a Mountain Home please reach out or start searching the most up to date listings on my website here.

If you don't know where to start or if you want some more detailed information please reach out to me at 303-907-9129.

Tucker Zimmerman

Broker Associate

Coldwell Banker Mountain Properties

Cell: (303)-907-9129

TZimmerman@cbmp.com

Search for your Mountain Home!

ColoradoHardMoney.com by Fairview Commercial Lending recently named Mountain Resort Communities one of the top real estate investments.  A central theme is the amount of cash buyers seeking a hedge for inflation. Summit County's large percentage of cash buyers make our market less sensitive to interest rate hikes. 

"Mountain towns: Although, the price points in the various resort communities for single family are very high they will not be impacted the same as Denver. In many ski towns 60-75% of the homes are bought in cash so these buyers are not directly rate sensitive.  Furthermore, there will be a desire to buy into the various ski towns as a hedge against inflation as other assets lose substantial value (Stocks and Bonds have both lost value this year).  Furthermore, build costs will make it prohibitive to materially increase supply." 

Take a look at their full blog post here for information on what they see as the best and worst real estate investments in Colorado.

The 2022 ski season is beginning to wind down here in Summit County. There are less people wandering Frisco Main Street but there's still over 2 weeks left of great spring skiing and snowboarding. It's my personal favorite time of year for bump skiing. 

Here are the closing dates for our local resorts and don't forget backcountry skiing goes year round! 

• Arapahoe Basin: mid-June

• Breckenridge: May 30

• Cooper: April 17

• Copper Mountain: April 24

• Granby: April 10

• Keystone: April 17

• Loveland: May 8

• Steamboat: April 10

• Vail: May 1

• Winter Park: sometime in May

As of today, April 7th, 2022. I have a few free Loveland Ski area tickets to give away. Give me a call at 303-907-9129 and if I still have them they are all yours.