Q1 2020 Real Estate Perspective

The first quarter of 2020 was off to a great start with the number of residential properties sold and for higher closing price.  During Q1-2020, residential sales for all types of properties increased by 20 transactions over Q1-2019 which had 74 transactions and up by 22 transactions over Q1-2018.  Dollar volume was up 31% this year which indicates higher transaction prices.  Some areas in the county saw a continued up-tick in sales prices and some areas experienced a slight decline.  

Single Family homes held steady in the first quarter with 45 homes sold throughout Gunnison County and most of the transactions were located in Downtown Gunnison and the rural areas of Gunnison.  The Median Sold Price in Downtown Gunnison was $326,000 and in Rural Gunnison the Median sold price was $485,000.

Although the number of Condo/Townhome transactions in Mt.Crested Butte saw sales doubling over Q1-2019, the average sales price decreased approximately 18% this year and hovered around $420,000.  

As I watch new home foundations begin, I also hear from contractors that residential construction projects are being postponed this summer and it sounds like the projects that are currently under construction will move forward.  With our strict Public Health Orders, contractors have relayed that getting materials and sub-contractors into Gunnison County has been challenging and has therefore delayed construction projects.   

Vacant Land transactions declined 42% in Q1-2020 which follows a 25% decrease in overall transactions throughout 2019.  Both Rural Crested Butte and Rural Gunnison had the most sales in Q1. The Median sales price in Rural Crested Butte stood at $241,500 and for Rural Gunnison the Median sales price was $77,500.  Keep in mind that in order to obtain a mortgage for land, a Buyer will need between 30% to 40% of the purchase price to put down and then credit scores will need to be in the 700’s to qualify.

Even as I review our real estate market every day and I see that there are transactions occurring, I think it is too soon to tell with regards to the Coronavirus pandemic what the long term affects will be here and throughout the United States and the World.  My initial thought is that the inventory of residential and vacant land opportunities will increase however, it is unknown if list and sales prices will remain steady.  Since many of our property owners are 2nd homeowners and some rely on short term rentals to off-set costs of ownership, without short term rentals, my question is will they be able to afford to keep the property.  I am keeping an eye on this situation which may turn into opportunity for Buyers.  So far I have observed several $1,000,000+ single family homes coming on the market and only a few condos.

Even though interest rates are hovering around 3%, I am learning that residential refinancing as well as new mortgages are challenging to obtain because people are being laid off and their financial future has become uncertain.  Also lenders are shying away from Jumbo Loan products which are those loan requests over $510,400 because of uncertain and changing employment with applicants.