More road improvements are scheduled on Highway 9 between Breckenridge and Frisco this summer.
Federal stimulus money will help towards improving and widening to four lanes the portion of Highway 9 between Valley Brook Road and Coyne Valley Road. Colorado Department of Transportation planners stated that earlier bids for various projects are averaging about 12 percent less than what the agency previously budgeted. Any budgeted money remaining would be used to improve and widen to four lanes the portion of Highway 9 between Valley Brook Road and Fairview Blvd.
Colorado Department of Transport is also planning to repave Interstate 70 between the Eisenhower Tunnel and Vail Pass.
Friday, April 24, 2009
Thursday, April 9, 2009
Is Summit County's Real Estate Bottoming Out?
The Summit Association of Realtors invited Dr. Lawrence Un, chief economist for the National Association of Realtors to speak yesterday at the Keystone Conference Center to a full house.
“Colorado is one of the key growing markets. The long-term outlook is extremely bright,” said Dr. Lawrence Yun. "Projected growth will continue to fuel demand for homes in Colorado."
Based on several factors like a strong housing rebound in California and incentives from the economic stimulus package, Yun said the market is bottoming out. Sales volume could climb 10 to 20 percent in the second half of this year, he said.
But the housing market overall still faces some tremendous challenges, including unemployment that’s expected to climb into double digits and very low levels of consumer confidence.
Yun compared the current recession to the last sustained downtum in the early 1980s and said it’s worse this time around because home values are falling, with declines of 30 to 40 percent in some parts of the country. That has led to a $3 trillion drop in real-estate value from the peak of the market.
In some previous recessions, home values continued to grow, helping consumer confidence and buffering the impact to the real-estate market, however, that is not the case this time around.
“It feels worse this time because people’s lifetime savings have evaporated, and home values are actually falling. Growth is weak because consumers have given up. ... Spending is contracting at a really fast rate,” Yun said.
Real Estate the root foundation to economy?
Yun said there is growing consensus among political and economic decision makers that spurring the housing sector could be one of the keys to overall economic recovery.
Despite high unemployment, there are still people with the financial capacity to buy. The question is how to get them back into the market? Many people are playing a waiting game, hoping for prices and interest rates to drop even more.
"That can become a self-fulfilling prophecy, with unintended and negative impacts to the rest of the economy," Yun said.
"To counter that, the National Association of Realtors is pushing for specific policy measures, including interest rate buy-downs, low fixed mortgage rates, low subsidized rates for refinancing and permanently higher loan limits of up to 125 percent of median home prices."
Investment Property And Second Home Market
Over 70% of Summit County’s real-estate market consisits of second home and investment property transactions, a sector that has been hit especially hard by the credit crunch. The supply of jumbo loans needed to finance second homes and condo-hotel loans dried up as the bubble burst.
"A general improvement in the credit climate would help, and the government could also step in by having the federal reserve buy jumbo loans," Yun suggested.
“We have a lot of buyers, but we’re working in a challenging lending environment,” said Smith-Allen, a local Realtor. “The rules have changed,” she said, referring to conditions imposed on buyers, sometimes at the last minute.
"For the long-term, the second-home market in areas like Summit County could be in good shape, helped by a wave of baby-boomer retirement and a generational transfer of wealth," Yun said.
New Construction Starts
It’s more difficult to find good news on the home-building front, at least for the short-term, Yun said. For now, a glut of housing inventory will likely suppress recovery for the next year at least.
Builders need to take a long-term view, realizing that continued population growth in the country will at some point fuel demand for new homes.
But for now, local builders like Dave Koons are retrenching. Koons said he expects very little in the way of new home starts in Summit County this year. Some builders have already moved away for lack of business.
Koons is refocusing part of his business to retrofit existing homes with energy-efficient upgrades. Federal funds for those activities should spur consumers to consider those upgrades, he said.
“It’s not real good and I don’t think we’ve seen the bottom yet. I don’t think we will until we see a loosening of the credit market,” Koons said. “There’s just no financing for spec homes,” he said, referring to the practice of building homes on credit with the expectation that they’ll quickly sell.
Breckenridge community development director Peter Grossheusch said it’s still too early to tell what the summer will bring. For the past few months, the number of applications has dropped compared to last year, but it’s still early in the season, he said.
“We’re down, but we’re starting to see some activity,” he said.
“People are talking about remodels, but I’ve heard very little about starts,” said local builder Mark Sabatini.
Summit County fairing better than others
Summit County will hopefully avoind some of the worst impacts seen in Pitkin County. The Aspen Times reported that there is a “potential sea of unbuilt or half-built buildings” at Snowmass Village, where developers suspended work, citing an inability to secure financing. Construction on the partially built Little Nell Residences Snowmass stopped last week for the same reason, according to The Aspen Times.
"Summit’s big base-area projects at Breckenridge are on track," according to Vail Resorts spokeswomen Kelly Ladyga.
“One Ski Hill Place is on schedule to be completed in 2010,” she said, adding that other big Vail Resorts projects in Eagle County are proceeding as scheduled.
But further out on the horizon, a planned hotel at the base of the new Keystone gondola is on temporary hold.
“We’re waiting to see what happens,” Ladyga said.
“Colorado is one of the key growing markets. The long-term outlook is extremely bright,” said Dr. Lawrence Yun. "Projected growth will continue to fuel demand for homes in Colorado."
Based on several factors like a strong housing rebound in California and incentives from the economic stimulus package, Yun said the market is bottoming out. Sales volume could climb 10 to 20 percent in the second half of this year, he said.
But the housing market overall still faces some tremendous challenges, including unemployment that’s expected to climb into double digits and very low levels of consumer confidence.
Yun compared the current recession to the last sustained downtum in the early 1980s and said it’s worse this time around because home values are falling, with declines of 30 to 40 percent in some parts of the country. That has led to a $3 trillion drop in real-estate value from the peak of the market.
In some previous recessions, home values continued to grow, helping consumer confidence and buffering the impact to the real-estate market, however, that is not the case this time around.
“It feels worse this time because people’s lifetime savings have evaporated, and home values are actually falling. Growth is weak because consumers have given up. ... Spending is contracting at a really fast rate,” Yun said.
Real Estate the root foundation to economy?
Yun said there is growing consensus among political and economic decision makers that spurring the housing sector could be one of the keys to overall economic recovery.
Despite high unemployment, there are still people with the financial capacity to buy. The question is how to get them back into the market? Many people are playing a waiting game, hoping for prices and interest rates to drop even more.
"That can become a self-fulfilling prophecy, with unintended and negative impacts to the rest of the economy," Yun said.
"To counter that, the National Association of Realtors is pushing for specific policy measures, including interest rate buy-downs, low fixed mortgage rates, low subsidized rates for refinancing and permanently higher loan limits of up to 125 percent of median home prices."
Investment Property And Second Home Market
Over 70% of Summit County’s real-estate market consisits of second home and investment property transactions, a sector that has been hit especially hard by the credit crunch. The supply of jumbo loans needed to finance second homes and condo-hotel loans dried up as the bubble burst.
"A general improvement in the credit climate would help, and the government could also step in by having the federal reserve buy jumbo loans," Yun suggested.
“We have a lot of buyers, but we’re working in a challenging lending environment,” said Smith-Allen, a local Realtor. “The rules have changed,” she said, referring to conditions imposed on buyers, sometimes at the last minute.
"For the long-term, the second-home market in areas like Summit County could be in good shape, helped by a wave of baby-boomer retirement and a generational transfer of wealth," Yun said.
New Construction Starts
It’s more difficult to find good news on the home-building front, at least for the short-term, Yun said. For now, a glut of housing inventory will likely suppress recovery for the next year at least.
Builders need to take a long-term view, realizing that continued population growth in the country will at some point fuel demand for new homes.
But for now, local builders like Dave Koons are retrenching. Koons said he expects very little in the way of new home starts in Summit County this year. Some builders have already moved away for lack of business.
Koons is refocusing part of his business to retrofit existing homes with energy-efficient upgrades. Federal funds for those activities should spur consumers to consider those upgrades, he said.
“It’s not real good and I don’t think we’ve seen the bottom yet. I don’t think we will until we see a loosening of the credit market,” Koons said. “There’s just no financing for spec homes,” he said, referring to the practice of building homes on credit with the expectation that they’ll quickly sell.
Breckenridge community development director Peter Grossheusch said it’s still too early to tell what the summer will bring. For the past few months, the number of applications has dropped compared to last year, but it’s still early in the season, he said.
“We’re down, but we’re starting to see some activity,” he said.
“People are talking about remodels, but I’ve heard very little about starts,” said local builder Mark Sabatini.
Summit County fairing better than others
Summit County will hopefully avoind some of the worst impacts seen in Pitkin County. The Aspen Times reported that there is a “potential sea of unbuilt or half-built buildings” at Snowmass Village, where developers suspended work, citing an inability to secure financing. Construction on the partially built Little Nell Residences Snowmass stopped last week for the same reason, according to The Aspen Times.
"Summit’s big base-area projects at Breckenridge are on track," according to Vail Resorts spokeswomen Kelly Ladyga.
“One Ski Hill Place is on schedule to be completed in 2010,” she said, adding that other big Vail Resorts projects in Eagle County are proceeding as scheduled.
But further out on the horizon, a planned hotel at the base of the new Keystone gondola is on temporary hold.
“We’re waiting to see what happens,” Ladyga said.
Wednesday, April 1, 2009
Second Home and Investment Property Sales in 2008
This article is from the National Association of Realtors and describes the national statistical data on second home sales and investment property sales in 2008. It is reflective of our sales here in Breckenridge and Summit County too.
WASHINGTON, March 30, 2009
The combination of vacation- and investment-home sales slipped to 30 percent of all existing- and new-home transactions in 2008, according to the National Association of Realtors®.
However, more than four out of 10 investment buyers and more than three in 10 vacation-home buyers paid cash for their properties, with large percentages indicating that portfolio diversification was a factor in their purchase decision.
The market share of homes purchased for investment was 21 percent last year, unchanged from 2007, while another 9 percent were vacation homes, compared with a 12 percent market share in 2007. The total share of second homes declined from 33 percent of all transactions in 2007. In 2005, the peak year for home speculation, 40 percent of sales were second homes.
NAR’s 2008 Investment and Vacation Home Buyers Survey shows vacation-home sales dropped 30.8 percent to 512,000 last year from 740,000 in 2007, while investment-home sales fell 17.2 percent to 1.12 million in 2008 from 1.35 million in 2007. Primary residence sales declined 13.2 percent to 3.77 million in 2008 from 4.34 million in 2007.
Lawrence Yun, NAR chief economist, said the findings are understandable given the economic backdrop. “We expected vacation-home sales to fall given the impact of a declining economy on discretionary purchases,” he said. “A steady share of investment-home sales results from buyers taking advantage of deeply discounted prices in many areas, with a smaller portion of new homes in the sales mix.”
Despite weakening second home purchases in 2008, the long-term demand looks favorable because there are large numbers of people in the prime years for buying a second home. Currently, 39.2 million people in the United States are ages 50 to 59 – a group that dominated sales in the first part of this decade. An additional 44.8 million people are between 40 and 49, and another 40.7 million are 30 to 39.
“While economic factors can affect sales from one year to the next, the fundamental demand from these large population groups will remain,” Yun said. “Given that most people become interested in buying a second home in their 40s, the bulge of population approaching middle age should drive the second-home market over the next decade.”
The median price of a vacation home was $150,000 in 2008, down 23.1 percent from $195,000 in 2007. The typical investment property cost $108,000 last year, which is 28.0 percent below the 2007 median of $150,000.
“As in the market for primary residences, it appears that many sales of deeply discounted distressed homes are pulling down the median price in the second-home market as well,” Yun said.
In this environment, NAR says it’s important to work with a Realtor® who is knowledgeable about the local market to solve potential problems and navigate the transaction process.
Yun said lifestyle considerations are the single most important factor in the vacation home market. “People are buying weekend homes or recreational property to use themselves or for a family retreat – investment considerations are secondary for most vacation-home buyers with relatively modest interest in renting.”
The typical vacation-home buyer in 2008 was 46 years old, had a median household income of $97,200, and purchased a property that was a median of 316 miles from their primary residence; 35 percent were within 100 miles and 36 percent were 500 miles or more.
When asked about their reasons for purchasing a vacation home, 89 percent of buyers wanted to use the home for vacation or as a family retreat; 27 percent to diversify investments; 27 percent to rent to others; 26 percent to use as a primary residence in the future; and 17 percent for use by a family member, friend or relative.
In terms of location, 26 percent of vacation homes were purchased in small towns, 23 percent in a rural area, 23 percent in resorts, 20 percent in a suburb, and 8 percent in an urban area or central city.
Seventy percent of vacation homes purchased in 2008 were detached single-family homes, 18 percent condos, 5 percent townhouses or rowhouses, and 7 percent other.
Sixty-nine percent of vacation home buyers and 84 percent of investment home buyers purchased existing homes; the rest purchased new homes.
Investment-home buyers in 2008 had a median age of 47, earned $85,000, and bought a home that was fairly close to their primary residence – a median distance of 19 miles.
When asked about the most important reasons for purchasing an investment home, 58 percent said to provide rental income; 38 percent to diversify investments; 19 percent for use by a family member, friend or relative; and 15 percent to use for vacations or as a family retreat.
Twenty-eight percent of investment homes were purchased in a suburb and another 20 percent in an urban or central city area, 23 percent in a rural area, 22 percent in a small town, and 6 percent in a resort area.
Sixty-four percent of investment homes purchased in 2008 were detached single-family homes, 22 percent condos, 8 percent townhouses or rowhouses, and 6 percent other.
Vacation-home buyers plan to keep their property for a median of 12 years; 58 percent plan to keep their vacation home for 11 years or more. Investment buyers plan to hold their property for a median of five years.
Eight in 10 second-home buyers consider it a good time to invest in real estate, compared with 71 percent of primary residence buyers.
The size of the second-home market is significant. NAR’s analysis of U.S. Census Bureau data shows there are 8.1 million vacation homes and 40.5 million investment units in the United States, compared with 75.5 million owner-occupied homes.
NAR’s 2008 Investment and Vacation Home Buyers Survey, conducted in March 2009, includes answers from 1,924 usable responses. The survey controlled for age and income, based on information from the larger 2008 NAR Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents
WASHINGTON, March 30, 2009
The combination of vacation- and investment-home sales slipped to 30 percent of all existing- and new-home transactions in 2008, according to the National Association of Realtors®.
However, more than four out of 10 investment buyers and more than three in 10 vacation-home buyers paid cash for their properties, with large percentages indicating that portfolio diversification was a factor in their purchase decision.
The market share of homes purchased for investment was 21 percent last year, unchanged from 2007, while another 9 percent were vacation homes, compared with a 12 percent market share in 2007. The total share of second homes declined from 33 percent of all transactions in 2007. In 2005, the peak year for home speculation, 40 percent of sales were second homes.
NAR’s 2008 Investment and Vacation Home Buyers Survey shows vacation-home sales dropped 30.8 percent to 512,000 last year from 740,000 in 2007, while investment-home sales fell 17.2 percent to 1.12 million in 2008 from 1.35 million in 2007. Primary residence sales declined 13.2 percent to 3.77 million in 2008 from 4.34 million in 2007.
Lawrence Yun, NAR chief economist, said the findings are understandable given the economic backdrop. “We expected vacation-home sales to fall given the impact of a declining economy on discretionary purchases,” he said. “A steady share of investment-home sales results from buyers taking advantage of deeply discounted prices in many areas, with a smaller portion of new homes in the sales mix.”
Despite weakening second home purchases in 2008, the long-term demand looks favorable because there are large numbers of people in the prime years for buying a second home. Currently, 39.2 million people in the United States are ages 50 to 59 – a group that dominated sales in the first part of this decade. An additional 44.8 million people are between 40 and 49, and another 40.7 million are 30 to 39.
“While economic factors can affect sales from one year to the next, the fundamental demand from these large population groups will remain,” Yun said. “Given that most people become interested in buying a second home in their 40s, the bulge of population approaching middle age should drive the second-home market over the next decade.”
The median price of a vacation home was $150,000 in 2008, down 23.1 percent from $195,000 in 2007. The typical investment property cost $108,000 last year, which is 28.0 percent below the 2007 median of $150,000.
“As in the market for primary residences, it appears that many sales of deeply discounted distressed homes are pulling down the median price in the second-home market as well,” Yun said.
In this environment, NAR says it’s important to work with a Realtor® who is knowledgeable about the local market to solve potential problems and navigate the transaction process.
Yun said lifestyle considerations are the single most important factor in the vacation home market. “People are buying weekend homes or recreational property to use themselves or for a family retreat – investment considerations are secondary for most vacation-home buyers with relatively modest interest in renting.”
The typical vacation-home buyer in 2008 was 46 years old, had a median household income of $97,200, and purchased a property that was a median of 316 miles from their primary residence; 35 percent were within 100 miles and 36 percent were 500 miles or more.
When asked about their reasons for purchasing a vacation home, 89 percent of buyers wanted to use the home for vacation or as a family retreat; 27 percent to diversify investments; 27 percent to rent to others; 26 percent to use as a primary residence in the future; and 17 percent for use by a family member, friend or relative.
In terms of location, 26 percent of vacation homes were purchased in small towns, 23 percent in a rural area, 23 percent in resorts, 20 percent in a suburb, and 8 percent in an urban area or central city.
Seventy percent of vacation homes purchased in 2008 were detached single-family homes, 18 percent condos, 5 percent townhouses or rowhouses, and 7 percent other.
Sixty-nine percent of vacation home buyers and 84 percent of investment home buyers purchased existing homes; the rest purchased new homes.
Investment-home buyers in 2008 had a median age of 47, earned $85,000, and bought a home that was fairly close to their primary residence – a median distance of 19 miles.
When asked about the most important reasons for purchasing an investment home, 58 percent said to provide rental income; 38 percent to diversify investments; 19 percent for use by a family member, friend or relative; and 15 percent to use for vacations or as a family retreat.
Twenty-eight percent of investment homes were purchased in a suburb and another 20 percent in an urban or central city area, 23 percent in a rural area, 22 percent in a small town, and 6 percent in a resort area.
Sixty-four percent of investment homes purchased in 2008 were detached single-family homes, 22 percent condos, 8 percent townhouses or rowhouses, and 6 percent other.
Vacation-home buyers plan to keep their property for a median of 12 years; 58 percent plan to keep their vacation home for 11 years or more. Investment buyers plan to hold their property for a median of five years.
Eight in 10 second-home buyers consider it a good time to invest in real estate, compared with 71 percent of primary residence buyers.
The size of the second-home market is significant. NAR’s analysis of U.S. Census Bureau data shows there are 8.1 million vacation homes and 40.5 million investment units in the United States, compared with 75.5 million owner-occupied homes.
NAR’s 2008 Investment and Vacation Home Buyers Survey, conducted in March 2009, includes answers from 1,924 usable responses. The survey controlled for age and income, based on information from the larger 2008 NAR Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents
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