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. 

To Our Summit County Customers and Community,

Please note that you will see new additions within the monthly report this year: One key change is that there is a cumulative total bar for 2022 in all the resort counties on page 2. For example, the  February report will show the gross volume for January in all resort communities, then each month that number will be updated with the last full month so there is a cumulative running total. Also, on page 21 there is a helpful breakdown on Deed Restricted unit sales.

Here are highlights:

• Market Analysis by Area for February 2022: There were a total of 107 transactions and $120,161,549 in monetary volume. The average transaction price for all 18 reported areas, plus Deed Restricted transactions, was $1,205,520, average residential price was $1,312,406 and average residential PSF was $749.
• Market Analysis by Area 2022 (2 Months) YTD:  There are a total of 231 transactions with $286,419,970 monetary volume. the average transaction price is $1,305,404, the average residential price is $1,377,942 and the average residential PPSF is $746.
• Market Snapshot for FULL Years 2022 vs 2021:  Average Indicators for $: Single Family +36, Multi- Family +7% and Vacant Land +27%. Median Indicators for Single Family +36%, Multi- Family +6% and Vacant Land +17%.
• Market Analysis % Change YTD February 2022:  Monetary volume in February 2022 was down -10% from February 2021. Transactions were down 29% from February 2021.  YTD 2022, $ volume is pacing 9% up from YTD 2021, and transactions are 26% down from YTD 2021.
• Residential Cost Analysis:  Residential volume in February had 81 transactions with $106,304,854 gross volume. There were 39 properties that sold for $1M and above in February.  There were 31 Single Family, 50 Multi-Family and 10 Vacant Land transactions in February 2022. 
• Average Price History by Type- 2022: Average price for residential Single Family: $2,330,301 Multi- Family: $801,514 and Vacant Land: $641,265
• Comparative Historical Cost Analysis Comparison 2022-2021-2020: YTD 2022, there were 183 residential transactions and $252,163,353 gross $ volume with 89 properties selling for over $1M. YTD 2021, there were 245 transactions with $261,665,817 gross $ volume with 68 properties selling for over $1M. YTD 2020, 209 transactions with $175,227,700 gross $ volume with 58 properties selling for over $1M.
• Top Lender Analysis February 2022: There were 365 loans in February, 77 loans were related to sales, there were 174 REFI's and 114 loans were timeshare related. 28% of the real estate closings were cash transactions. 
• Foreclosure 2022 Update: There were 2 Foreclosures in February 2022 compared to 1 last February 2021.
• Purchaser Profile Abstract:  There were 40 upper end sales in February 2022. Our buyers for real estate transactions for February 2022: Local buyers at 28%, with the Front Range demographic at 46% and 26% were out of state buyers with 0% International. There is also a graph included showing demographic trends through 2013 on page 19.
  
  

Please note that Land Title data comes from actual recorded transactions at the County Clerk and Recorder’s Office for that particular month. The information is not directly related to MLS data. The data is an unofficial tabulation of Summit County Records that are believed to be reasonably accurate. If you choose to utilize this marketing information in any publications or websites, please make sure you are quoting Land Title as your source. You are welcome to utilize this link within your own websites.

           Click here for the February 2022 Market Analysis         

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

• March 7, 2022
• Glen Weinberg

What a few weeks it has been.  The stock markets have been up, then down.  Interest rates have also spiked only to fall shortly thereafter.  I’ve been asked by several realtors in various ski towns, what is the impact of Ukraine and real estate prices in Colorado.  Will there be a surge in prices as buyers search for “safe places” and safe assets like we saw during COVID?

What has happened economically since the invasion of Ukraine?

1. Fed on track for rate increases: the federal reserve has confirmed that rate increases are on track and they might need to have larger increases in subsequent meetings as inflation remains stubbornly high
2. 10 year treasury declined / mortgage rates declined: It is interesting that the federal reserve is clear that they are raising rates, but at the same time interest rates are falling. Remember the fed only controls the short term markets and not long term treasuries, which mortgages are pegged off.  Treasuries are “set” by market forces, in this case, there is a huge flight to safe assets like US treasuries during times of war and uncertainty.  As more people buy treasuries their prices go up, and in turn yields (long term rates) go down.  This creates a whole new problem for the federal reserve and could force them to increase rates even more.
3. Stock market has declined substantially: As mortgage rates went down due to a flight to safer assets, the stock market has also gone down substantially as investors are nervous about riskier assets.  As stocks go down, wealth decreases which at some point decreases consumer confidence.

Will there be a flight to “safety” in Colorado ski towns?

With everything going on since the Ukraine invasion, it makes me wonder if we will see another Covid type repeat in Colorado ski towns where there is an insatiable demand.  During Covid, there was a huge “flight to safety” as people wanted to be in smaller, safer markets.  This led to huge price jumps in every ski market in Colorado with some topping 50% increases year over year.

With the war in Ukraine continuing, will Colorado ski towns see the same response in real estate to the current crisis?  I think the factors today are a bit different, I don’t think there is the same perception of personal “safety” from the crisis in Ukraine but there is now a big push out of risky assets into safer assets which fits with Colorado ski real estate.

Will there be an increase or a decrease in Colorado ski real estate prices?

Although we will not see another huge increase in real estate prices in the mountains like the Covid bump, it will remain desirable as buyers look for safe places to park assets as opposed to the stock market.  This will keep Mountain real estate a desirable asset to own which will keep prices high albeit the appreciation rates will be slower than the past 3 years.

Summary

I don’t think that the Ukraine invasion is market moving unto itself for Colorado ski real estate, but the invasion does put further pressure on other assets which will drive high net worth individuals to diversify their portfolio into safer assets.  From a real estate perspective, mountain real estate will continue to be a “haven” for investors looking to hedge against downside risk.  Although I don’t think we will see the same appreciation we saw during Covid, the mountain communities look to stay at their highs with little respite in sight for buyers as prices look to increase a bit further.

• February 2, 2022
• Glen Weinberg

If you’ve been reading the news, it seems to be everywhere, complaints against vail resorts are plastered all over the media.  With Vail the largest owner of resorts in Colorado and the United States will this derail the real estate party in ski towns or is there something bigger lurking that will radically change the real estate trajectory.  Will we see a 2007 repeat in Colorado ski real estate?

Complaints about Vail resorts impact on ski real estate

I recently read a Denver post article about Vail resorts and the diminished guest experience.  It gave a scathing review of Vail resorts.  On top of that I have written prior that Vails stock is taking a beating as a result of their lackluster execution of the ski season this year.

1. Epic pass sales are up 76% vs. the 2019/2020 ski season, meaning the slopes would likely be more crowded to start with regardless of any labor issues.
2. With resort living becoming increasingly more expensing, MTN’s wages are allegedly not keeping up in their local markets
3. A pandemic-triggered escalation of real estate prices has reduced the number of homes available to local workers for rental
4. H2-B and J-1 international work visas, which ski resorts have historically used to fill employment gaps, are in especially short supply leading to continued labor issues.

It doesn’t take a rocket scientist to figure out what was going to happen this season.  Vail dropped the price of their passes by 20% to sell more and it worked.  They sold 76% more passes but unfortunately they did not add any new capacity.  This has led to a “diminished guest experience”.  How could any rational person not see that this would happen?

Unfortunately part of the issues are a result of Vails own making, but the overwhelming majority is well outside of their control.  For example in Breckenridge house prices have increased almost 40% in one year.  This has priced would be renter out as houses get sold.  Furthermore, the demand to visit/live in the mountain towns has skyrocketed creating even more demand for workers with less housing.  Unfortunately I don’ see a great solution to the issues facing Vail.

On a positive note, Vail’s performance or lack thereof will have no impact on real estate prices in the various resort communities.   This will definitely not be the impetus for any real estate pull back.

Will rising interest rates impact purchases in Colorado ski towns?

There is no doubt interest rates are rising on treasuries and in turn mortgage rates.  The federal reserve has telegraphed a more aggressive rate stance which will put further upward pressure on mortgage rates.  How will the increasing rates impact Colorado ski real estate?  Long and short, interest rates should have a limited impact due to the number of cash purchases.  In most major ski resorts in Colorado the number of cash purchases are between around 40% and 70%. This is a huge percentage of purchases that are not interest rate sensitive as they have no mortgage.  Here is a past article on this topic: Best Colorado ski town investments.  With such a large percentage of properties being bought with cash, a move upward in rates is unlikely to be the catalyst for a slowdown in ski real estate.

What is the real risk to ski real estate?

If mortgage rates and the performance of the largest ski hill operator are not going to slow down ski real estate, what will?  With appreciation averaging north of 25% per annum throughout the ski towns with some as high as 40%, the pace of increases is unsustainable.

Resort real estate is highly correlated to stock market performance. With the huge quantity of cash transactions, much of these funds were from gains on equities.  Furthermore, the demographics of various ski towns throughout Colorado are heavily invested in the stock market due to their net worth.  As the stock market is now beginning to correct, ski real estate will invariably slow.

Will there be a correction in ski real estate like the stock market?

With a high correlation between the stock market and ski real estate, will there also be a correction in ski real estate.  As of writing this the Nasdaq is off almost 15% for the year with the S&P down around 10%.  With a correction underway, what happens to real estate?

Fortunately, although there is a correlation between the stock market and ski real estate it is not a one for one correlation.  For example a 20% drop in the market, might lead to a flattening or possibly a loss of 2-5% in ski real estate.  Remember even if real estate values flatten this is after 30% gains last year in many markets so it is important to keep it in perspective.

Summary

Long and short, I don’t see a fire-sale coming with values plunging in ski real estate as the market corrects, but the market will flatten and there is a risk of a small give back in appreciation depending on how severe the correction is.  Fortunately there is zero excess inventory in the various resort towns and build prices are extremely high coupled with so many cash purchases, the downside risk in ski real estate is radically different than 2007.

We finally have some clarity on the county's path for new rules surrounding short-term rentals. Thank goodness Summit County officials took a more reasonable approach than the Town of Breckenridge, who decided to effectively ban new STR's in all but a select few condominium buildings.  

The county's new rules are only applicable for un-incorporated Summit County. These rules apply to areas such as Wildernest, Summit Cove, Dillon Valley, Peak 7, and more. If you own property or are looking for property within any of the town limits these rules are NOT applicable. Other Summit County Towns such as Frisco and Dillon will likely be making changes to their own rental rules, so make sure to check my blog often for updates on that. 

Why the changes? Summit County has always been and will always be a resort destination. Second homes will always exist in Summit County. However, with the rising popularity of AirBNB and VRBO, many full time residents feel they are being priced out of living in the area. There are increasingly fewer long-term leases available to locals. Without a local workforce, businesses can't function or cater to our visitors. Personally, I believe all the above to be true but I'm not comfortable restricting owners property rights and I think there are better ways to solve the locals housing problem. 

Relatively, the new rules are reasonable. The county officials had to do something or else the radicals would have done...well, something radical. Below is a brief summary of the new rules. For the full ordinance click here.

The majority of second home owners will be able to rent their property a maximum of 135 nights per year. There is no restriction on what nights you can rent, so an owner could maximize profit by only renting during the highest revenue nights per year such as Christmas, New Years, and Fourth of July.

If your second home is in a resort overlay zone such as Keystone or Copper Mountain, there is no cap on nights.

Locals will be able to rent their primary home a maximum of 60 nights per year for a reduced license fee. 

If your property meets a strict set of criteria and goes thru a review process, you could obtain a Type III rental license allowing you additional occupancy or unlimited rental nights per year. Some of the guidelines for a Type III license are below. You can read all the guidelines on page 23 here. 

• For Single Family Homes
  • A minimum distance of 100 feet from occupied areas (including hot tub or fire pit) of your property to the neighboring lots
  • OR the existence of an existence of an Accessory Dwelling Unit (ADU). An ADU is a great option if you have the space, this could be an apartment on top of a detached garage which you long-term rent to a local. This give you stable income and should qualify the primary home for a Type III license
• For Multi-Family or Condominium Complexes
  • Only available in large condominium complexes with over 100 units. 
  • Significant on-site amenities as evidenced by at least 3 of the following: pool, hot tub, sauna, game room, tennis / pickle ball courts, or other significant amenities as approved by the Review Authority
  • Direct, private shuttle to a ski area or public transit within 100 feet of the property

If you'd like to find a property that would allow for a specific license type please reach out to me at TZimmerman@CBMP.com or call me at 303-907-9129. I have a list of all exempt buildings in Breckenridge or I can focus on properties that would be eligible for a Type III license. 

How to Choose What's Right for Your Mountain Home

Congratulations! You've made the decision to start your search for a mountain home. Now it's time to decide what type of property is right for you. Let's talk about the pros and cons of each!

Condominiums

Search Summit County Condominiums

Generally speaking condominiums are the least expensive option in Summit County but that's only due to their smaller size. In fact, condominiums actually have the highest price per square foot of the three options. As of the date of this post, condominiums throughout Summit County have a median sold price of $609/FT. So what are the benefits that justify this higher price per SF: 

• Location, Location, Location-Condominiums buildings are going to have the best access to whatever you want to access. Whether that be ski-in-ski-out access or main street dining just out your door condominiums offer the best access.
• Amenities- The majority of condominium buildings offer some sort of amenity. In our market, a community hot tub is a fairly standard offering. Some complexes offer private pools, tennis courts, fitness centers, game rooms and more. The highest end offerings could include a private shuttle or access to private lakes for fishing and paddle sports. Don't forget that these amenity spaces aren't included in the price/SF I mentioned above so you're actually getting a better price/SF than it appears. If you value the use of amenities, condominiums are a great way to go. 
• Low or No Worry Maintenance- When you buy a condominium, you are buying the space inside the walls of your unit. For most buildings this means that you won't need to worry about a vast majority of maintenance expenses. If the water heater or furnace goes out, that will likely be an issue central to the building and not your sole expense. HOA's keep a reserve of funds for these emergency repairs. You can also count on the HOA to deal with things like building repainting as necessary, parking lot maintenance, snow removal, etc. 
• All Inclusive Dues-Many Condominiums include all inclusive dues of all of your utilities. This even encompasses cable and internet service. What that means for you is that you can budget a fixed amount every month for your cost of ownership. As opposed to a single family home where your heating bill can spike in December. The HOA also is able to negotiate collectively to receive better rates for things like internet service. So next time you seen an HOA fee that seems high ask me what is included rather than writing off the property all together. 

So what are the cons? 

• Homeowners Association-is HOA a bad word? Maybe. We've all heard the story about the resident HOA snitch who goes around reporting neighbors for violations. Let's call her Glenda. Maybe your Christmas wreath on your door violates some obscure rule, does it affect Glenda? No. Is she going to report you anyway? Absolutely!  In reality, HOA's are generally a benefit. They protect your asset and  your property value. They also make sure someone isn't in your parking spot when you arrive later than you expected because of the Blizzard on I-70.
• Space and Privacy-If your dream is to get all of your friends and family under one roof, condominiums are probably not the way to go. While it's possible to host a super bowl watch party in your condominium, uncle Jerry may not be happy sitting on that wooden barstool for 4 hours. Likewise, if you want a private hot tub, let's explore a townhome or single family home. 
• Neighbors-This is pretty self explanatory and is hit or miss. You could have great respectful neighbors but suddenly they decide to sell their property. I'm sure almost everyone has lived in an apartment building before with noisy upstairs neighbors but if not, below is a video for you. I generally prefer top floor units or any units in concrete construction buildings. 

Townhomes and Duplexes

The best of both worlds! Modern townhome and duplex architecture has evolved to a point where once you're inside, you will be fooled to think you're in a private single family home. Many duplex neighborhoods use clever design to make sure that the few shared walls will not effect your experience. Take for example this floor plan from the Lakota Duplexes in Winter Park, CO. You'll notice the shared wall (bottom) does not border your sleeping spaces, this property also featured staggered decks for privacy. 

Pros: 

• Lower starting price point than single family home. Generally speaking starting in the $700K-$800K range for Summit County (sometimes less expensive). Some luxury duplexes in prime areas can go as high as $2 Million. 
• More privacy than condominiums.
• Garages are common. You may need to compromise for a one-car garage or a two-car tandem garage
• Some complexes have amenities like an owners clubhouse or a private shuttle to the ski area.  
• Homeowners Association is commonly in place to maintain the appearances of the properties and take care of exterior issues. At a minimum you will likely have a party wall agreement with your neighbor to structure maintenance costs.
• Shared expenses such as snow removal

Cons: 

• HOA fees can add an additional expense. Particularly if you don't have interest in using amenities. 
• Typically smaller garages than a single family home.
• All Inclusive HOA fees are less common than condominiums so you will have more variable expense.

Single Family Homes

Search Summit County Single Family Homes

With a median sales price of $1,525,000 the Summit County single family home epitomizes mountain luxury. If you want a property for big family gatherings or for maximum short-term rental revenue, the single family home may be the route to go. Because single family homes are on individual lots you have more privacy and separation from your neighbors. And depending on if you're located in a covenant controlled community, you will have more freedom in how you use your property. Say you'd like to store a snowmobile trailer or a boat at your mountain home, we can find you a property for that. Conversely, some of the newer developments are covenant controlled homeowners associations to maintain a certain aesthetic.

Another great benefit, is some single family home lots may be eligible to accommodate an Accessory Dwelling Unit (ADU). Think of this as an additional apartment on top of your detached garage. Rent it to a trusted local tenant for extra revenue and the security of knowing someone is nearby to check on your mountain home. Summit County also has programs to waive water and sewer tap fees for a locals housing ADU and they are discussing new benefits. 

Pros: 

• Maximum Rental Revenue
• More privacy than condominiums and townhomes
• Private garages, land, and detached storage areas
• Potential to add an Accessory Dwelling Unit  
• Neighborhoods with and without homeowners associations are available. Reach out and I'll help you focus your search depending on which you prefer
• Flexibility on how you use your property

Cons: 

• Median Price is higher than other property types
• Higher variable expenses and more maintenance items to stay on top of
• Snow removal costs

Thanks to our friends at Land Title for the below update on Summit County Sales. For the all the data, click here.

From Summit Association of Realtors Executive Director-Sarah Thorsteinson

Yesterday the Summit County Commissioners approved an ordinance creating a new short-term rental license structure. The Ordinance will go for a final reading and vote on December 16^th. If approved, the Moratorium on current permits will expire, and the new Ordinance will take effect. 

If you or your clients have questions about the proposal, please reach out to the County STR hotline at 668-4186. The Ordinance is subject to change at the final vote on the 16^th, so the following highlights are not set in stone. Scott Peterson, CAR legal Counsel, recommends that your clients contact the County directly to understand the policies and do their due diligence. Any property rented for more than 30 consecutive nights is considered a long-term rental and not subject to the following rules.

There will be two types of zoning:

Resort zoning includes Keystone, Copper, Tiger Run RV Resort, 4 O’clock Sub, Skiwatch, and Peak 7 ( added yesterday). These areas are exempt from the new permitting requirements as these areas are designed for tourism.

Residential zoning includes all other unincorporated areas of the County. There will be three types of permits for properties in these areas a property owner can apply for. There are no caps on the amount of short-term rental licenses. Property owners can choose which permit makes the most sense for them. 

• Type One is for primary homeowners who short-term rent either a room in their home or their entire property for up to 60 nights a year.
• Type Two is for second homeowners who want to use their property and rent it. This license type will allow owners to rent their property for up to 135 nights a year while using it for themselves for the rest of the year. SAR has consistently asked for 180 nights a year and was pleased when the commissioners increased the number of nights from 120-135 yesterday. 
• Type Three is for owners who want to rent for more than 135 nights and also includes investment properties that want to rent year-round. This section will be reviewed again by the Commissioners on December 16^th and is subject to change.

1. Single Family property owners must go through the Conditional Use Permitting (CUP) process. 

• Must have 100 ft setback between residential improvements or have an Accessory Dwelling Unit (ADU).
• If lot is smaller than 40,000 sq ft, it goes through the Conditional Use Permit Class 4 process, reviewed by the County Planning Commission. Occupancy is 2 per bedroom plus 2.
• If lot is bigger than 40,000 sq ft, it will go through the CUP class 2 process reviewed by County staff.  Occupancy is 2 per bedroom plus 2 but can apply for additional occupancy if it goes through the Class 4 review process.

2. Multi-family properties

• Properties must be a part of an HOA with at least 100 units. HOA must have shuttles to ski areas or be within 100 ft of a bus stop. It must include other on-site amenities such as pool, hot tub, sauna, gym, game room, tennis/pickleball, etc.
• HOA must verify amenities and provide a letter stating STR’s as a compatible use. If HOA does not verify, then property goes through a class 4 CUP process. 
• Occupancy is 2 per bedroom plus 2, with no option to change.

Short-term rental license holders who had licenses prior to the Moratorium will be allowed to keep their current licenses for 5 years to give time to determine which type of permit they will fit into in the future. Keep in mind, they still expire each year.

Both Breckenridge and Summit County have made or are making changes regarding short-term rentals. Below is a summary of what I know as of today 11/22/2021. All information is subject to change as the different jurisdictions make changes. 

• Anything in town limits (with the exception of Breckenridge) has not yet experienced changes. If you buy within a town such as Dillon, Frisco, or Silverthorne you should be able to obtain a rental permit. That rental permit will likely be grandfathered in for the time of your ownership if that town does make changes.

• Breckenridge rental permits are effectively unavailable except if you’re in a specific condominium building that is exempt. I can provide you this list or set up your search to include these buildings. These buildings are required to have 24 hour security and front desk staff. Therefore, they will likely have higher HOA fees.

• Areas such as Keystone and Copper are pretty much safe from changes because the county has recognized these are resort areas. 

• Unincorporated Summit County. This would be areas like Dillon Valley, Wildernest, Farmers Korner, Blue River and Summit Cove. Decisions on this will likely be made tomorrow (11/23/2021) but there will likely be different types of permits. The proposed permit types are actually not that restrictive in my opinion and they would still work for most second home owners. You can view these proposed permit types starting on page 4 here: https://www.summitcountyco.gov/AgendaCenter/ViewFile/Item/1672?fileID=6637. If you purchased in these areas, you would be interested in a type 2, 3, or 4 license. Properties eligible for type 4 license will probably be more expensive. A type 2 license for example, shouldn’t be hard to obtain and would still allow you to rent your property 120 nights per year. You could then use your property the remainder of the time and only rent those 120 nights during high revenue times of year.