The gamble of high risk, high reward is the norm of the Real Estate industry. 2017 was a strong year for residential real estate in Breckenridge. Average sales prices increased and days on the market decreased. Amid an obscure year of political and economic matters, the market stood fast. 2017 paved the way for two surefire winter real estate trends we’ll see in 2018:
- Homeowners will continue to capitalize on consumer travel preferences. Many will cash in on Breckenridge vacation homes via peer-to-peer rental platforms. Think: Airbnb, Homeaway, Flipkey, etc.
- High property demand coupled with sparse inventory will leave minimal wiggle room for buyer negotiation.
Homeowners, renters, vacationers, sellers, listen up! This year’s Breckenridge real estate trends apply to us all!
Vacation Rentals will (continue to) Thrive
Reflect on your last Airbnb, VRBO, FlipKey or vacation rental escape. Why did you opt for a local property? What happened to the hotel chain your parents and grandparents so firmly stood by?
Truth is, short-term rental services cater to the unique needs of travelers:
- Cost efficiency
- Pet friendly options
- Household amenities
- Intimate, localized travel experiences
Consumers across America brought swift change to the traditional hotel portion of the travel industry. Vacasa, a vacation rental website released an intensive 2017 Mountain Markets Vacation Rental Report. Numbers show the private lodging sector has grown twice as fast as the U.S. travel industry.
Peer to peer exchange vacation rentals thrive in high-growth markets. Breckenridge falls in to this high-growth category. The historic mining town has seen a 17% increase in average residential real estate list price, year over year.
Growth of vacation rental inventory has skyrocketed. This upsurge has paralleled the exponential trajectory of Summit County’s listed and sold prices. Year over year, Breckenridge has seen a 6% growth in the number of private rentals.
Rental properties in Breckenridge do require business licenses. Owners must also pay sales and lodging taxes. However, an abundance of private rentals shows these fees haven’t deterred home homeowners from the short-term rental market. This leads us to believe that in spite of mounting annual fees and taxes, many believe income benefits outweigh any rental overhead and the short-term rental trend will continue to flourish.
And the numbers support this popular trend. Breckenridge boasts an impressive 3,526 short-term units to rent. 1,802 properties in Breckenridge are second homes. Data reveals locals have also taken advantage of renting out detached studios, spare rooms, or basements. Thanks to platforms like Airbnb, Breckenridge residents can afford mortgages and contribute to retirement funds.
Why will Breckenridge vacation homeowners continue to capitalize on this trend as we trail blaze in to 2018?
For starters, passive rental income streams are attractive. Peer to peer exchange platforms have simplified the rental process for vacation homeowners. Online sites help individuals rake in 5% - 10% gross income of property value. In Breckenridge, the average single-family home price is nearly $1.3 million. A little property management action suddenly doesn’t sound too bad.
The miners who founded Breckenridge in 1859 may have thought the town dried up decades ago. Winter real estate trends prove a new gold mine in vacation rentals will steal the show.
Home ownership in order to capitalize on short-term rentals is a trend that we will continue to see throughout 2018 and beyond. Check out our discussion,10 Reasons Why a Second Home is a Great Investment, for more info and facts!
Sellers will have the Upper Hand
2017 saw an inventory crisis and this trend will carry on full-force into 2018. A Colorado statewide population surge has created tremendously high demand for housing. Yet available properties remain at a record low.
Colorado continues to welcome an influx of tech talent to Denver. Work life balance is a main priority in today’s environment. Breckenridge is the ideal arms-length distance to have the best of both worlds. Sellers see the demand and can hold firm to their list price as buyers snap up their homes.
People move to Colorado for a plethora of activities the mountain region provides. It’s hard to blame them. Front Range residents now account for 40% of real estate sales in Breckenridge and Summit County.
The Colorado Association of Realtors tracks real estate trends across the state. Analysts release a detailed monthly local market update. We filtered the report as a real-time tool to identify specific trends. January’s numbers confirm the residential real estate landscape in Breckenridge is indeed a “seller’s market.”
Summit County had an inventory of 696 single-family homes and condos for sale in January 2017. One year later, this number has fallen to a measly 468 properties; a noteworthy inventory decrease of 33%.
In the state of Colorado, inventory is down 27%. Yes, Breckenridge will sell more deed-restricted homes this year, and this new construction designed for workforce residents might ...might alleviate the local housing crisis. But what about new construction for the Front Range 40%?
A lack of new construction guarantees a continued shortage for buyers. Dearth development promises sellers a pretty penny for Breckenridge properties.
Comparison of January 2017 versus 2018 reveals sellers received 96.8% of list price, up an entire 1% from last year at this time. As the seller-power trend continues, we can expect this number to approach100% in 2018.
These factors will further bolster seller power this year:
- Demand in Breckenridge remains high despite record low supply.
- Spikes in sales price shows that buyers will pay near list price, if not full.
- Projected increase in mortgage interest rates will kick buyers into action.
Breckenridge tempuratures have cooled, but the seller market is white-hot. Adamant buyers have no option but to pay top price if they want to enjoy the benefits of owning a mountain home.
And more buyers look to purchase in this magical mountain destination. Swells in population support the popular quote, “The mountains are calling, and I must go.” Recent media exposure endows Breckenridge as the #1 Best Small Town In Colorado.
Buy or Sell a Home Today!
We have a positive outlook for the year ahead and our agents are here to help navigate these trends. If you’re ready to buy or sell, contact us today, and we’ll work together to satisfy your wants and needs!
By Coldwell Banker