Mountain real estate a buyer's game

After treading water in 2006, the Evergreen real estate market showed some signs of recovery in 2007, but the modest increase in average selling price was offset by the fact that houses are taking longer to sell and the number of houses sold is declining.

Realtors agree the current Evergreen area market from Bergen Park to Conifer is a buyer’s market, meaning interests rates are attractive and there are deals to be had. On the seller’s side, prices aren’t setting records, but they aren’t declining much, either.

“Whatever you buy today, even at full price, by 2010 you will look back (at your decision) and say you are a genius,” said Tupper Briggs of Re/Max Alliance Evergreen.

It’s not that 2007 was a bad year in a major way; it was just not the kind of year that sets new records or generates multiple offers for the same home, Realtors report.

To some extent, the real estate climate in Evergreen is a reflection of the weakness in the U.S. housing market in general. According to the National Association of Realtors, home prices as of January were 3.3 percent below a year ago, based on multiple listing service information.

Sales of existing homes have been at 5 million for the past three months, possibly hinting at stabilization and a bottoming out, the NAR says. But the current annualized sales pace would only match the 1998 annual figures, down 20 percent from a year ago and down 30 percent from the peak of 2005. Construction of new homes is down roughly 50 percent from 2005.

The NAR concludes that buyers are holding back because they think both housing prices and interest rates are going lower.

Evergreen’s raw numbers would give the average seller or real estate investor a measure of comfort because the median selling price was up 7 percent from $340,725 in 2006 to $365,000 in 2007, based on 1,179 homes sold in the greater Evergreen area, including Conifer, Pine and the U.S. 285 Corridor. The average selling price was up about 3 percent for the year. (The median is the price at which half of the units sold were above and half of the units sold were below.)

But the increase in average selling price is more accurately related to the 11 percent drop in the number of homes sold (1,324 to 1,179) and does not represent real price appreciation, so the level is nothing to get excited about, in Briggs’ opinion.

“Think what it was worth in 2005 and 2006. Just wipe out the notion you had price appreciation last year,” Briggs said.

“It’s a buyer’s market. They are checking out all of the homes, and if it’s overpriced, it’s just going to sit there.”

To put matters in context, the 1990s were very good to Evergreen. The last really good decade of appreciation ended in 1997, Briggs said. Then 2000 and the high-tech bubble burst. The state lost 117,000 jobs.

The market muddled along until 2005, when it reached the last peak.

Since 2005, the average number of days an Evergreen house sits on the market has increased from 112 to 136. In 2001, the average was only 70 days, based on figures compiled by Re/Max Alliance from Metrolist Inc.

Although foreclosures increased 40 percent in Colorado in 2007, Jefferson County had one of the lowest rates of foreclosures in the metro area. The worst county was Adams, with a 4 percent foreclosure rate (one out of 23 homes). Jefferson was only one out of 58 homes.

“I think because we didn’t have all the speculation that led to huge price appreciation (elsewhere), we are not going to suffer as much. I think things are going to turn around in the middle of the year,” Briggs said.

An up attitude

Mark Footer, managing partner with Intero Real Estate Services of Evergreen, said homes prices have risen moderately for the last few years.

“We saw an increase in average sales price for Evergreen South (the area south of Evergreen Lake) over 6 percent from 2006 to 2007,” Footer said.

He called it “steady, stable appreciation,” but, bottom-line, it’s also “a buyer’s market,” he adds.

Apparently attractive homes sometimes move slowly. A beautiful, never-lived-in mountain contemporary home in Indian Hills, for example, has been on the market for three months at $550,000, down from the original price of $575,000.

“It’s a mystery to me why it isn’t selling. All I can say is, buyers are picky. They have a lot to choose from,” Footer said.

Footer views it as a positive sign that January 2008 is getting off to a good start with 26 homes sold, compared to 18 in January the year before, a 44 percent increase.

Another good sign is the average Evergreen sales price, based on 485 homes sold, was $487,284 in 2007, compared to $464,783 in 2006, based on 490 homes sold, a price increase of nearly 5 percent. (Figures refer to Evergreen only, not including Conifer/Bailey and the 285 Corridor.)

Indications are the regional economy is looking up as well, compared to the national economy. Employment data show that while job creation is in decline, it is still projected to be higher in Colorado than the rest of the nation in 2008, which is good for real estate, Footer notes.

The Feb. 20 announcement that Conoco Phillips purchased the StorageTek campus near Broomfield for a new energy research complex is a big boost for the Colorado economy, Footer says.

Evergreen still has the mountain lifestyle and is still a big attraction for some buyers.

“People looking to relocate (to Evergreen) are looking for the quality of life. The amenities are fantastic, such as open space, trails, community events and rec centers — all 35 minutes from downtown. That’s not going to change,” Footer said.

Listing slowdown

While the increase may not be stellar, Realtors say it could be a lot worse, given the lackluster state of the real estate industry, the glut of new homes on the market and the state of the homebuilding industry.

The market is sluggish mainly because not enough people are putting their houses up for sale, said Chris Vinci, broker/owner of daVinci Realty in downtown Evergreen. Vinci is president of the Evergreen Downtown Business Association.

“I probably have double the number of buyers than I have sellers,” Vinci said. “There’s not much on the market that is fitting what they are looking for if they are out of state looking for a retirement or vacation home.

“There are a lot of sellers who are very nervous about putting their homes on the market because they think they are gonna take a loss,” Vinci said.

To give sales a boost, Vinci started a website, www.dvrhomematch.com. “Whether your home is currently for sale OR NOT, we may have a Buyer for you. Click here to learn more,” the website directs.

Houses that sell quickly have easy utility access, good views and convenient access. Certain homes stay on the market because they have flaws. “There are a lot of quirks about mountain homes, like lack of views and good floor plans. Buyers don’t want to look at (Highway) 74. They don’t want half an acre. They want elbow room and trees. They want three-quarters at least ee . There are a lot of those homes but not a lot on the market,” Vinci said.

Winter phobia is also a factor. “People are still hesitant to move to the mountains for fear of being socked in by the winter,” Vinci said.

One couple who sold their home in Highlands Ranch in time for the blizzard winter of 2006-07 bailed out the next spring.

“It’s a different lifestyle and it’s not for everyone,” Vinci said. “Which means there aren’t that many buyers out there.”