2023 MID-YEAR VALUES ARE UP BUT SALES ARE DOWN

FFor the first six months of 2023, the Steamboat Springs MLS experienced declines in three major categories: listings, transactions, and dollar volume. During a real estate market upswing, similar to what we have witnessed in the past decade, where demand surpasses supply, the key factor lies in listings. Since 2010, when there were over 3,000 listings available at any given time, there has been a consistent decline. The first half of 2023 concluded with 617 listings, marking a significant 27% drop from the 850 listed during the same period in 2022. In a high-demand market, listings serve as the driving force; however, due to an insufficient and unhealthy supply, they are currently inadequate. The substantial decline in sales resulted in a corresponding decrease in dollar volume. This decline was not surprising as it plummeted from $666M in 2022 to $406M in 2023, representing a substantial drop of 39%. However, an indicator for market demand lies within how property values respond. If demand subsides, property values should also decrease accordingly. Conversely, when demand exceeds supply, property values are expected to increase. Throughout the first half of 2023, demand remained robust, leading to a new record for residential dollar/sf values (including singlefamily homes, townhomes, and condos) in Steamboat Springs. In 2022, the median residential dollar/sf value stood at $667. However, during the first half of 2023, it rose to $750, reflecting a notable increase of 12%. Despite declines in transactions and dollar volume, the significant rise in property values clearly indicates sustained high demand. Moreover, the absorption rate—which measures the rate at which inventory is consumed within a specific timeframe—for the first half of 2023 was the third highest on record. In 2021, an impressive absorption rate of 85% was observed, indicating that 85% of properties listed during the first 6 months were sold within that period. In comparison, 2022 recorded a slightly lower absorption rate of 75%, while 2023 reached a rate of 71%. A “balanced” market is typically characterized by an absorption rate of approximately 50%. As we consider the future, assuming no significant disruptions occur at the national or international level and no major real estate developments are anticipated to enter the market in the near future, it’s likely that the current status quo will remain until additional supply can be made available.