Dec 31, 2022
Andy Stonehouse
With real estate markets across the United States beginning to cool after the nearly out-of-control frenzy of the post-Covid period, buyers may wonder if the situation in mountain communities like Summit County is also starting to stabilize.
According to Debbie Nelson and Ned Walley of Silverthorne’s Nelson Walley Real Estate, the local market remains a challenging environment, but stress that a mix of flexible financing options and expert assistance can still help land the right property.
The good news for buyers, Nelson says, is that the cascading growth of prices seems to have peaked in May, though average prices are consistently up 16% over the last year. But with a steady stream of federal interest rate increases and the impact of ongoing local government restrictions on short-term rentals, Nelson notes the market has settled considerably – though there is still less than two and a half months’ worth of inventory available.
“When there’s a change in the market, we focus on educating people and letting them know how these price fluctuations are a normal part of the process,” she says. “You may have missed the boat by not buying three years ago, but we have to look historically to keep things in perspective and guide our clients on navigating our current market changes.”
As Walley explains, tighter market conditions make it all the more important to enlist local real estate professionals who have been working in the market both before and after its recent pricing peak.
“Our job is to hold people’s hands and guide them through the process. We offer our detailed analysis of what’s going on, to help our clients get the best deal.” Walley says.
Adjustable Rate Mortgages Offer A Flexible Tool
Some may associate adjustable-rate mortgages with the chaos of the 2008 economic crash, but Nelson says the ARM has become a useful tool for buyers who are interested in entering our once-again volatile market but don’t plan on holding onto their property forever.
“We encourage buyers to talk to lenders and consider the phrase, ‘marry the house, date the rate’ … and consider an ARM as a way of getting into the market until lower interest rates hit,” she says. “We’re anticipating a settling in federal interest rates in the fourth quarter of 2023, and this is a way to get into the house you love now, and figure out things later.”
Walley says that the average length of home ownership in Summit County is between six and seven years, suggesting that many buyers already use their properties as investments, or trade up for larger homes to suit their family or lifestyle needs. But with the new reality of higher interest rates and the ongoing issue of historically low inventory, buyers may need to be more flexible in their intentions.
“It comes down to people’s tolerance for risk,” Walley adds. “While to some buying in a resort might seem higher risk since prices are higher here than back home, it’s a risk that typically pays off. Since 1989, we’ve seen an average annual growth of property values of over 7% county-wide. Owning real estate here is simply an alternate asset class as compared to the stock market. And this is an asset you get to enjoy.”
