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Market Update - Has Our Real Estate Market Turned The Corner?

Posted by Breckenridge Associates Real Estate on Wednesday, March 9th, 2011 at 9:33pm.

After the economic sluggishness of 2010, it is easy to paint a picture of the local Breckenridge real estate market in a decline. One can certainly find numbers that indicate receding prices and dropping numbers of sales in segments of the local market. However, this tells only part of the story and ignores some other signs pointing toward recovery.

As we have wrapped up 2010 and are springing forward well into 2011, there are some clear trends that indicate a gathering strength in our marketplace. In a nutshell, 2010 revealed a dramatic increase in total sales volume, a surge in sales of condos and townhomes, a drop of existing inventory of properties for sale, a jump in sales of vacant land and a clear 4th quarter spike in properties going into contract. Let’s take a closer look.

57% Increase In Total Sales Volume
2010 saw an increase in total sales volume in almost every property category in Breckenridge. Single Family Homes increased $52.8 million from $95.33 million to $148.14 million. Sales volume for Vacant Land increased by $6.71 million. Duplexes decreased total volume by $5.4 million. However, Condominiums more than doubled from $50.9 million to $109.83 million in dollar volume, bringing the total Breckenridge increase from $194.63 million to $305.07 million, a 57% increase for the year.

Condominium Sales Jump
Breckenridge Condominiums and Townhomes were clearly the big winner in 2010. Sales of actual units posted a healthy jump to 225 units in 2010, compared to 152 in 2009 – a 48% increase. The average sale price also increased 33.5%, from $435,317 in 2009 to $581,089 in 2010. While this increase certainly reflects the closing of units in Vail Resorts’ new One Ski Hill Place (at much higher unit prices), sales of all other units has picked up briskly, and as of as of March 5, 2011 there were 41 Condo and Townhome sales and 19 under contract.

Existing Inventory Shrinks
One clear and necessary step in real estate market recovery is absorption of existing inventory. As properties take longer to sell there become a growing number of properties on the market, thus contributing to downward pressure on real estate prices.

The good news is that we have witnessed a drop in existing inventory for sale in 2010 for just about every Breckenridge property category: Single Family Homes inventory down by 4.6%, Duplex inventory down by 17.6%. Condominium inventory decreased by 9.1%, and Townhome inventory increased by 17.4%.

Specifically, in The Highlands area, which generally counts for about half of the home sales over $1 million, the inventory of existing homes for sale has dwindled from 59 at the end of 2009, to 27 currently. 2010 sales in The Highlands area held their own quite respectably with 31 sales, compared to 32 sales in 2009 — bucking the decline in the Breckenridge Single Family Homes category. A shrinking inventory is important for all of us, as it is a clear signal that our market is regaining its vitality and shrugging off its doldrums.

Vacant Land Sales Up 45%
It wasn’t long ago that you could count the number of building permit applications at the building department on the fingers of one hand. While it does not herald a building boom, 2010 Breckenridge area land sales spiked from 40 in 2009 to 58 in 2010, a 45% increase. People looking to invest millions in new construction is a significant influencer in the long term faith in our area’s market. Clearly, construction has always been a principal economic driver for all segments the Breckenridge community and local economy.

What’s Happening Now? – Pending Sales
One of the difficulties with the real estate appraisers’ view, and sales data in general is that they only look at what has already happened — looking in the rear view mirror. To see where you are going you need to look ahead – through the windshield. That windshield is pending real estate sales. This is the picture of what is currently happening in the local real estate market. The 4th quarter of 2010 witnessed a clear uptick in people writing contracts on real estate, with a total of 18 properties over $1 million going into contract, compared to 11 in the 4th quarter of 2009. In the first two months of 2011 , 42 properties went into contract – and 10 of the properties were over $1 million. As we go into the early part of 2011 , Breckenridge shows the following properties pending contract (as of March 5, 2011 ): Single Family = 30, Duplex/Townhome = 10, Condos = 19.

The Breckenridge real estate market is in a state of flux and appears to be on the mend. Call your Broker/Partner today to learn more about buying or selling real estate in Breckenridge and the surrounding areas.

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