Ski Season 2012
Slow Recovery Continues
Sales Rose Again in 2011, Prices Stabilized

2011 is over… bring on 2012!
Based on 27 years of intimate knowledge of this market through several boom and bust cycles, the signs of recovery seen in the past are again falling into place. The recovery is very slow, but it’s a recovery never the less.
For three years beginning in 2009, there have been about half as many sales as the 20 year average each year.
In the past 20 years there have been twice as many years with increased sales than with decreased sales. But when sales go down, they go down twice as fast as they increased.

In the 14 of the last 20 years where sales increased, annual increases averaged 11%. In the 6 years with declining sales, they averaged 21% down per year.
There have never been more than 3 straight years of declines, those were 2007, 2008, and 2009. There was one streak of 8 years (1986-1993) of increased sales in the past 30 years.
Since the bottom in 2009, sales have increased about 10% each year in 2010 and 2011. Barring another recession, we might expect to regain the average number of sales by 2016.
In the most recent 5 year stretch of increased sales, from 1996 to 2000, the average price of Summit County property increased by 57% with sales increasing by 30%.
At those rates starting this year, average prices could be in the mid $700’s by 2016. Inflation could increase prices more quickly. However sales would only climb to about 1700 by then, still 500 fewer than the 20 year average.
This assumes that the market is bottoming right now. For existing properties where prices declined by only 2.6% this year, that may be a valid assumption.

At the end of the last deep real estate recession in Summit County in the mid 1980’s, there had been a large inventory of foreclosed new construction for several years. When that inventory was finally gone, prices started up almost immediately.
At the end of 2011 there’s hardly any new construction left to liquidate. Excluding timeshares, the number of resale foreclosures actually completed crept up to about 150 in 2011, but the number of foreclosure notices has been dropping for months.
Furthermore, at the end of every previous weak market, the inventory became very low. At the end of 2011, the inventory of properties offered had fallen to its lowest level since 2007. Having sold 1289 properties county-wide in 2011, the early January inventory of 1650 seems manageable at last.
Here’s where I’m supposed to urge you to act quickly before the bargains are gone. Don’t worry, it’s probably not going to happen as fast as in previous recoveries. But the best properties at the lowest prices are selling first and not being replaced on the market.
We have at least seen the basic strength of the Summit County market where prices have fallen only about 17% from the peak in 2008. There are places in the US where prices fell that much in a month.
Yes, it’s still a second home that you don’t absolutely have to have. But there’s quite a bit of money sitting in storage waiting for some confidence in our economy to return. Summit County has held value much better than most investments and it’s an asset that owners can actually enjoy using.
Now would be a good time to reconsider ownership if you’ve ever wanted a place in the mountains.

Chuck Leathers, CRS
Owner/Broker
888/485-2300

60A Main St./Box 4514,
Frisco, Colorado 80443
E-mail me at chuckleathers@realtor.com
Go to http://www.chuckleathersre.com/ to see all Summit County listings