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Posted: April 01, 2009

Who owns Colorado: Steamboat Springs still has plenty of snow but could use another head of steam

After real estate sales topped $1 billion in 2007, the resort town weathered a 56 percent decline

David Lewis

If what you live for is white and fluffy and falls from the sky like manna, you might like Steamboat Springs.

In an average winter, perhaps 250 inches to 300 inches of snow fall on the Colorado mountains. And you will remember how remarkable last year’s snows seemed. Yet we still wish to add that in the winter of 2007-2008 Steamboat had a hair under 500 inches of snow, and more than 100 inches in both December 2008 and January 2009.

This winter “hasn’t been a killer winter, but it’s not bad. Not like last year but not bad,” says Randy Rudasics, small-business counselor at Colorado Mountain College’s Bogue Hall Enterprise Center. Much the same could be said for Steamboat’s recession: not a killer.

“Everybody’s adjusting to 10 percent to 15 percent lower revenues,” Rudasics says. “If you look at our newspaper classifieds, a year ago it was 75 percent help wanted and 25 percent real estate ads; now it is 75 percent real estate ads and 25 percent help-wanted ads,” which is great for hiring but maybe not so hot for real estate.

Steamboat is a city happily built on snow, and we mean “happily.” Residents can scarcely stop chirping about the stuff, and it is a big reason developers are gambling well more than $1 billion on little Steamboat Springs. “It is a beautiful-looking Steamboat Springs day,” economic consultant Scott Forbes says in a phone interview. “It snowed yesterday morning. It snows late in the evening, then in the morning, and you wake up and it’s clear.

“It’s a little bit like Camelot” that way, Forbes adds.

Steamboat Springs real estate sold like lots in Camelot for a time. Steamboat has grown because of its new projects and “low price relative to the other luxury resorts — still quite a bit less than Aspen or Vail, or for example Sun Valley, or even Park City to some extent,” says David Baldinger Jr., managing broker of Steamboat Village Brokers Ltd.

Baldinger says outsiders must realize the city has annexed little over the years and that development largely “is concentrated within what has been the city limits for 30 years. So that put us into a situation where we didn’t have very much inventory at all. Basically in a five-year period we doubled our values, and whether it be an entry-level ‘70s condo or a brand-new house on a golf course for $8 million, pretty much every price category acted similarly.”

Yet today, realty-wise, Camelot is showing some cracks. Construction cranes still loom over the little city, but sales of existing residences are slow. If the recession goes on too long, who knows? Speaking of depressing, let us now take a look at Steamboat Springs real estate’s recent past: In 2007, Steamboat Springs’ real estate sales surpassed $1 billion for the first time. In 2008, $447 million of real estate sold, a startling decline of 56 percent. And 2008 saw 727 sales, almost 1,000 fewer sales than the prior year and the lowest total since at least 1995, when these records were first kept. Dollar volume fell, too, but not so much: to a median of $280,000 per transaction from $330,000 per deal in 2007. By the way, 2008 sales were composed of: 36 percent, single-family homes; 37 percent, condos; 20 percent, townhomes; 10 percent, time shares; 3 percent, mobile homes.

Doug Labor, broker-owner of Buyer’s Resource Real Estate in Steamboat, compiled these figures. Yet Labor believes it could be worse, and it would be without the impetus of, a) the 2007 sale of Steamboat Ski & Resort Corp. to Intrawest; and b) the simultaneous revitalizations of both the ski resort’s base area and downtown Steamboat.

“Because of the excitement and what all has happened here, it has kind of tempered the downturn a little bit, and that is going to help us rebound faster than most of the other resorts,” Labor adds. Condo sales have been slowed by market forces as well as non-market forces.

To name but one way borrowing has changed, Yampa Valley Bank vice president/mortgage officer Kathryn Pedersen notes that, “Lenders used to look at a condo and say, ‘Yes, looks fine, we’re set to go with it,’ just because it conformed to HUD guidelines. Now Fannie and Freddie are saying, ‘If we find out that it does not conform, as far as being a warrantable condo, you now have to buy back the loan; we will not provide the funding for it.’ So lenders are being a heck of a lot more picky.”

Pedersen has a few short sales going, sales in which the mortgage exceeds the value of the home, and she says they are going well. She also has one loan in the works, for a condo that is not underwater. “It is a great time to buy,” she says.
Consultant Forbes has drilled deep into the demographic data to discover that Routt County’s economic drivers are from one of two categories: “location-neutral” businesses and their employees, children of broadband who represent about 35 percent to 40 percent of the whole; and an even larger group, the “affluent early retiree.” Both groups represent outside money coming into the community, Forbes notes, quickening the proverbial velocity of money there.

Will they keep coming?

Nick Metzler, owner-broker of Steamboat-based Colorado Group Realty, reps 33250 Tatanka Trail, a 7,132-square-foot single-family home on 10 acres adjacent to national forest for sale for $2.85 million, down from $3.85 million. “Since we dropped that price we have definitely generated some lookers. It seems that almost everyone who has looked at it is someone who already owns property in Steamboat. Maybe they own a piece of land and they were looking to build, but why build when you can buy this?” he asks.

To see more information about "Who owns Steamboat Springs," click here.

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