FRISCO — Despite the economic uncertainty surrounding the novel coronavirus, the Summit County real estate market has stayed strong.
Although April and May showed almost no activity, real estate professionals saw booming business in June. While people thought the pandemic might be an opportunity to snag a less expensive home, the county’s property values have continued to stay at or above pre-pandemic levels.
There were four fewer real estate sales in June 2020 than there were in June 2019, but the total volume of sales was about $1.5 million higher this year than last year, according to Summit Realtors data.
“That’s a good thing,” Summit Realtors President Dana Cottrell said. “It means prices are going up or they’re staying pretty darn steady.”
The average sales price for all types of properties in June 2020 was $758,398, around $33,000 more than the average price in 2019, according to Summit Realtors data.
The property values reflect the unique nature of the pandemic’s impact on the economy, Cottrell said.
“This is an economic downturn that is almost voluntary,” Cottrell said. “We all agreed to stay home. We all agreed to cut back on what we do, which of course changes our economy … It’s temporarily based on something that we know we’ll be able to get under control eventually.”
While all types of properties have maintained high values, it’s clear that single-family homes tend to do the best, Ned Walley, owner, and broker at Nelson Walley Real Estate said.
“That, I believe, is a direct reflection of how buyers’ desires have changed due to COVID,” he said. “Perhaps, shared walls such as duplexes, townhomes, and condos are less appealing. People like the safety and privacy they get at a single-family home a lot more.”
While real estate professionals were surprised by June’s activity, the fact that Summit County properties maintained their high value ultimately wasn’t shocking.
“We have to remember what Summit County offers that very few other markets do and that is complete scarcity,” Jason Smith, president and managing broker at Colorado Real Estate Company, said. “We’re seeing a lot of new construction, but I’m telling you once this new construction is finished we’re pretty close to being built out.”
June Real Estate By The Numbers
Total real estate sales: 134
Total real estate sales in June 2019: 138
Total volume of sales: $101,625,391
Total volume of sales in June 2019: $100,102,553
Number of sales at or above $1 million: 26
Number of sales at or above $1 million in June 2019: 25
Because Summit County has such low inventory, prices stay high and buyers are motivated through a “fear of missing out,” Smith said. Walley and Smith agree that the most surprising part of the pandemic’s effect on the market is how quickly it was able to bounce back.
“Once we were allowed to show properties to buyers again, I almost felt like the floodgates opened up,” Walley said. “There was a lot of pent up buyer need that hadn’t been met while nobody could leave their houses and we couldn’t show properties.”
While property values make it so Summit County continues to be a seller’s market, record low-interest rates on mortgages and home loans mean it’s also a better time to buy for those looking for a home. Darlena Marmins, a mortgage banker at BOK Mortgage in Frisco, said she’s seeing interest rates as low as 3% for 30-year fixed mortgages.
“That’s just a crazy low rate,” Marmins said. “It’s just not normal. It’s unprecedented.”
Marmins said mortgage rates dropped so low because of the Federal Reserve working to create balance in the economy. In March, when the pandemic first began, interest rates were skyrocketing. The Federal Reserve quickly responded to that by going back to a program called “quantitative easing,” which means they are purchasing mortgage-backed bonds.
“It gives stability to that portion of the market and, therefore, that stabilizes interest rates for home loans,” Marmins said. “That’s where we are now and where we will be until we determine how to manage our economy through this type of pandemic.”
Cottrell, Smith, and Walley are all seeing buyers take advantage of the low-interest rates.
“So often people want to buy, they want to be involved up here. They want to get in,” Smith said. “When we look at the interest rates being as low as they are, it is — in a sense — giving that buyer permission.”
Source: Summit Daily