Tuesday, January 09, 2007

Steamboat Real Estate Market hits $1.12B in 2006

A very strong fall that kept on growing during the normally dormant months of November and December pushed our local real estate market to a new high in 2006, a 25% growth in dollar terms from $885M in 2005 on a 110% growth in units. December grew 74% which was on pace with the recent months. The ski area sale wasn't announced until mid-December so any sales driven by that news will show up in 2007 due to typical escrow timing. I would add that we are even more supply constrained than in 2005 which clearly limited the overall sales growth.

The anticipation of a sale definitely didn't hurt but there is much more going on in our market than that sale. We have several big improvements coming online over the next few years that have historically driven values in other ski areas including:
  • a URA making upgrades to the base area including a promenade linking the base area together.
  • several new projects at the base kicking off this year that will begin to make the base more of a destination and upgrade the overall experience year round.
  • 5 new mixed use residential and commercial projects going in downtown will preserve the good parts of downtown, remove some eyesores and add significant life to downtown.
  • The capacity of YVR Airport in Hayden doubling along with a strong program to fund new direct flights and the arrival of Frontier Airlines.
  • Scarcity of development land
  • The expected sale of the Ski Area to Intrawest and upgrades they are expected to make to the mountain experience.
I can't predict exactly what will happen but I expect that the discount that Real Estate in Steamboat sells for relative to other top ski areas will narrow more rapidly in the next few years. I also expect pricing of the new projects to pull up existing quality properties at a rate faster than the market as a whole.

We are also seeing the impacts of the increasing number of people looking for a second home or to move here with their kids as the baby boomers are starting to make plans to retire or are now free to work from nearly anywhere and want a great place for their kids to grow up.

Drop me a line if you would like a copy of some more detailed Real Estate stats to look over or for more detailed insights into what is happening and how different parts of the market are faring. My number is 970-819-6930 or email me at jon@mybrokers.com. See the Steamboat Springs blog main page for more.

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