Cam Boyd Blog

With the national economic slowdown that hit this past year, the most negatively impacted class of activity in 2008 was in the arena of land sales.  For the first 3 quarters of the year, Steamboat real estate saw a 59% drop in transactions amongst vacant land sales.  Overall transactions for the same period were down 36%.

Ironically, the average median price for parcels of land has increased by 109% over prior averages and residential prices increased 42%.  Some of the explanations behind this are attributed to:

1. Lack of affordable inventory.  With no substantial new developments close to town catering to your average wage earner, there's a lack of supply with this product type.  With this lack of supply, older projects such as Silver Spur and Heritage Park that were originally introduced at affordable prices are now sky-rocketing.
2. Increased price of new inventory.  Most of the new subdivisions introduced to the Steamboat Springs real estate market over the last year have rolled out with prices well above the average median price of the area.  These include the Steamboat Barn Village, Boulder Ridge and Graystone on the Green.

While few owners in our community are in the tough position of "having" to sell to keep their finances afloat, we are beginning to see prices decline amongst motivated sellers.  Those that are serious about selling their property in the near future are becoming more realistic about the current market conditions.  I suspect that that we'll see these price increases level off in 2009 and the number of transactions begin to escalate as a result.

Let's put real estate discussion on the back burner for today and talk about SNOW!   The Steamboat ski report announced 18-inches of the white stuff dumped in the past 24 hours and it's still snowing this morning.  Seeing as how my snow blower only has a 16-inch clearance, I had to clear my driveway twice this morning.  The first pass left only corn rows of snow that spit out the sides as I walked.

Our current "Ski Jam" guests seem to have timed their vacation just right.  Ski Jam is a music-related event in Steamboat that brings in a large number of people each January.  Imagine visiting from Texas or Florida and waking up to over a foot of snow on your condo's deck.

Typically the Steamboat ski report takes measurements as of 5 a.m. while the snow was still falling.  That said, the amount of snow that skiers and riders will find at the top this morning could be closer to 2 feet of that miraculous Champagne Powder.

Locals and travelers alike seem to have an added spring in their step and smile on their face this week.  We're once again getting pounded with snow which isn't so nice for driving or shoveling, but superb for skiing!

The Christmas season has passed and we now enter a "quieter" time of the ski season.  January typically means a slow down in the number of total visitors we see, but this year predicts to be especially soft. 

The recent lodging numbers released by the Steamboat Springs Chamber Resort Association projects occupancy at only 56% of the total lodging available beginning tomorrow night. That number equates to about 8,300 people.  Looking over the numbers for this same night in 2008, that puts us down about 4,600 people.  Last year at this time period, we saw close to 13,100 guests in Steamboat, or 88% occupancy levels.

The general consensus of the Steamboat Chamber and other lodging managers is that now, more than ever, people are booking vacations closer to their arrival dates.  This might boost the above projections by a little, but who's to say how much.

Overall lodging numbers for Saturday night comparisons slowly increased as the month of December wore on, but I'd be lying to say that we're seeing the same amount of traffic we did last year.

The hope is that with the arrival of 2009 we'll see a gain in consumer confidence, especially when it comes to travel.  The Steamboat Ski & Resort Corporation is getting proactive and releasing some mid-season specials to try and entice would-be travelers.

On a brighter note, with the start of "Ski Jam" - a music event bringing in groups from across the country-  this Wednesday is expected to hit 81% occupancy.

As we all know from living here, if the snow continues to fall the visitors will flock!  It's the old "if you build it, they will come" philosophy in action.  Besides, real estate prices continue to remain reasonable and investment opportunities are here for the taking.  The Boyd Team is remaining positive about the outlook of visitor traffic and potential home buyers to our market as the winter season rolls on.

Season's Greetings!  We hope you are having a happy holiday season. Here's an update for the past two weeks of sales, starting with the most recent.

Real estate transactions for Dec. 18 to 22:

Total real estate sales = $9,566,500 with 11 transactions including 4 over $1 million.  No timeshare sales

Real estate transactions for Dec. 11 to 17:

Total real estate sales = $14,088,400 with 10 transactions including 3 over $1 million.  Total timeshare sales = $139,100 with 3 transactions

Positive Note:  Showings have picked up quite a bit over the last week.  The Boyd Team has seen a dramatic increase in potential buyers with the recent influx of visitors to town.  We hosted an "apres ski" open house at our 2900 Bugess Pines Trail listing with wine & hors d'oevres that was well attended.

If you haven't stepped foot into the new Bud Werner Memorial Library, you should!  It's absolutely beautiful and the added resources are amazing.  Still at the corner of Lincoln Avenue and 13^th Street, the new expansion added square footage and needed services as well.  Favorites of the Boyd Team include the expanded children's reading area.  Here you'll find a whimsical assortment of colors, reading nooks, a back "story time" reading room and loads of new books for kids.  For our young students, the library now offers 30 public Internet computers and free wireless connection to the world-wide-web throughout the building.  A teen library, group study & meeting rooms and a coffee bar top the list of exciting new changes you'll find at our community library.  On a summer day, enjoy your book on the outdoor reading deck while overlooking Soda Creek and the Yampa River below.  It's infrastructure improvements like this that will keep our community appeal strong for years to come.

Real estate transactions for Dec. 11 to 17:

Total real estate sales = $14,088,400 with 10 transactions including 3 over $1 million

Total timeshare sales = $139,100 with 3 transactions

To follow up with last week's note about the Yule log that is hidden in Steamboat Springs each year: it was found after 11 clues. The Steamboat Springs Chamber Resort Association awards a $150 gift certificate to whomever finds the Yule Log. This year's winner, Randy Nelson, found the Yule log under the boardwalk at Rotary Park. He said his reason for hunting doesn't have anything to do with winning a prize - he plans to give the gift certificate to a family in need. "It's really the hunt more than anything, to tell you the truth," Nelson said. "It's a history lesson about Steamboat. Every time you do it, you find something out that you didn't know about Steamboat."

Last week we also helped a family in need. In fact, two deserving families were sponsored by our entire office to fulfill their "Christmas Wishes". The program is sponsored by the Routt County United Way, who reaches out to local businesses and individuals in order to find sponsors for the families. Prudential Steamboat Realty decided to sponsor two local families this year instead of exchanging gifts with each other this year. It was a fun event for everyone involved. We shopped for the gifts (many of which were basic clothing items), wrapping the gifts and delivering them to the families. We also rang the bell for the Salvation Army this year, as we have in years past. I think both of these traditions, along with Mickey's Fund that we spoke about last week, will remain strong here at Prudential.

All of us at The Boyd Team and Prudential Steamboat Realty would like to wish you and your loved ones a very special holiday.

As mortgage rates have dramatically fallen over the last few weeks, many are wondering if now is the time to refinance.  This seems like a key topic of discussion around the halls of Prudential and the community at large these days.

Refinancing now may sound appealing, but keep in mind that there are still some hurdles involved in securing the money you need.

One statistic shows that new applications for refinances have tripled this month.  The fact that the Federal Reserve has promised to buy up $600 billion of mortgage debt and 30-year fixed mortgage rates have droped below 5% has a lot to do with it.  Rates today are the lowest we've seen in 50 years but some borrowers may still have some trouble completing the deal.

It's still as important as ever to demonstrate at least 20% equity in your home.  With bad debt still weighing on the books of many large brokerage firms, showing at least 20% equity will be a key factor in qualifying from the start.  Beyond that, many lenders are requiring a credit score of at least 720 and a debt ratio below 43% for you to gain the approval you need.

For those in need of a Jumbo mortgage, you'll find these are still expensive.  For a 5/1 adjustable-rate mortgage with an initial interest rate for five years and an annual reset, you're looking at 6.6% on average.  Traditional 30-year fixed rates for Jumbo loans are hovering around 7.49%.  Home owners needing large amounts of money aren't likely to gain anything positive from refinancing now.

SOURCE:  www.Realtor.org

Taking a look at the sales numbers for November, things are still creeping along.  It goes without saying that we aren't seeing the activity we've witnessed over the last two years but the market will eventually turn around.  In my experience, when things start to happen, they happen quickly so the Boyd Team is prepped for the upswing.  Typically a market turn around happens when interest rates begin to rise.  With current interest rates at the lowest we've seen in over a decade, this just might be the "bottom" we've all been waiting for.  With a drop in overall prices and a good amount of inventory, this is the definition of a "Buyer's Market." 

Some numbers of interest:

• $37,955,800 sold in Nov. 08  /  $89,777,000 sold in Nov. 07  /  $138,544,400 sold in Nov. 06
• 49 transactions in Nov. 08  /  159 transactions in Nov. 07  /  262 transactions in Nov. 06
• Total Year-Over-Year dollar volume sold through November 2008 was $684,956,700   VS. $1,479,594,700 in 2007   VS.   $1,023,173,863 in 2006

On a positive note, the recent Steamboat Springs Lodging Barometer, measuring lodging reservations for the year, saw a boost in overall winter bookings.  Destination travelers and would-be vacation homeowners are still making their way to Steamboat this winter.  I'm hopeful to see a boost in closings come 1Q of 2009.

If you're headed to Steamboat for skiing or riding, you better get here soon.  If you're lucky enough to be a local... you're lucky enough! 

The National Weather Service is calling for a 60% chance of snow tonight, 50% chance tomorrow and 80% chance of a dump on Friday night.  In a town that makes predicting weather tough, an 80% chance of precipitation is almost like a guarantee.

The bummer news for those traveling to Steamboat in the next few days is the outlook of a Hazardous Winter Weather Advisory.  The next few days are going to bring with them some nasty driving conditions.  Expect icy roads and patches of dumping snow and drive carefully.

Over the next few days, expect to see over a foot of new Champagne Power spewing from that great big bottle of Dom Perignon in the sky!  Wax up the skis and get ready for some fun.

Pending home sales eased against a deteriorating economic backdrop but remain in a stable range, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, slipped 0.7 percent to 88.9 from an upwardly revised reading of 89.5 in September. It is 1 percent below October 2007 when it was 89.8.

"Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding in a generally narrow range," says Lawrence Yun, NAR chief economist. "We did see a spike in August when mortgage conditions temporarily improved, which underscores two things - there is a pent-up demand, and access to safe, affordable mortgages will bring more buyers into the market."

Conditions remain uneven around the country, but some areas that are showing healthy gains in pending home sales from a year ago include many Florida and California markets; Providence, R.I.; Lansing, Mich.; Oklahoma City; and Las Vegas.

By the Region

Here's what the PHSI showed across the country:

• South: jumped 7.8 percent to 95.9 in October but remains 2.9 percent below a year ago.
• Northeast: rose 0.6 percent to 68.1 but is 14.1 percent below October 2007.
• Midwest: declined 4.3 percent to 79.7 in October and is 6.8 percent below a year ago.
• West: fell 8.7 percent to 103.7 but is 17.4 percent higher than October 2007.

The Economic Forecast

New-home sales: for 2008 should total 486,000 this year, decline to 393,000 in 2009 and then grow to 446,000 in 2010. Housing starts, including multifamily units, are projected at 934,000 units in 2008 and 731,000 next year before rising to 772,000 in 2010.

Existing-home sales: looking at middle-ground assumptions, existing-home sales are forecast to total 4.96 million this year, and then increase to 5.19 million in 2009 and 5.55 million in 2010.

Home prices: "Price projections are challenging in an environment with so many variables and divergent local conditions," Yun says. "The home price correction to date has brought prices in line with fundamentals, but buyer pessimism could cause prices to overshoot downward, resulting in further economic deterioration." NAR's housing affordability index is likely to remain quite favorable, averaging 138 in 2009.

Unemployment rate: is estimated at 7.2 percent in the first quarter, rising to 8.3 percent by the end of 2009.

Inflation: as measured by the Consumer Price Index, is seen at 0.7 percent in 2009. Inflation-adjusted disposable personal income is expected to grow 1.5 percent in 2009.

GDP: Yun expects growth in the U.S. gross domestic product (GDP) to contract through the first half of 2009, then stabilize and expand in latter part of the year - lifted by a home sales recovery.

"Given the critical role of housing in an economic recovery, we're confident sufficient stimulus will be offered to bring more buyers to the market," he says.

Could a Drop in Interest Rates Help?

The 30-year fixed-rate mortgage will probably decline to 5.6 percent in the first quarter, rise slowly to 6 percent by the end of 2009, and average 6.2 percent in 2010.

NAR President Charles McMillan says he's hopeful about considerations by the U.S. Treasury to help the housing market.

"Efforts to bring down mortgage interest rates demonstrate a clear understanding of the role housing plays in stabilizing the economy," McMillan says. "We're very encouraged by all of the proposals getting serious consideration in Washington to help home buyers. More sales will stabilize home prices by bringing down inventory, and would lessen foreclosure pressure."

Source: National Association of Realtors