You’ve heard it – Do the Math. Now more than ever, math skills are being honed because math has gotten trickier for real estate due to historically low inventory. Buyers are having to weigh the pros and cons of living in city limits versus outside the city. Figuring out distance, time and cost for travel, rationalization of higher or lower price per square foot of one property over another and calculating the cost to renovate versus the cost to build are some of the quandaries that purchasers must weigh. Buyers in 2022 will need to budget for the probability of progressive interest rate increases over the year and its effects on down-payment and buying power- most Buyers are hoping to buy sooner than later; however, justifiably not feeling in control due to inventory. The anxiousness to purchase is often because of paying record rental rates that can continue to increase. Many have done the math and know that they could own for the same or lower monthly payment, earn tax deductions and begin the opportunity to gain equity.

The first month of 2022 in Routt County revealed 24 active single-family listings and 26 homes that went under contract – fortunately, 14 new listings came on and to date there are now 32 active listings. Multi-family saw a similar predicament with 19 active listings and 26 units that went under contract with 24 respective new listings that came on and 18 currently available. When the months’ supply is calculated, it equates to less than a month’s supply of houses and less than two weeks supply of townhomes & condos.  January is historically a slower period for our valley – both for sales and listings. Statistics reveal that the Percent of List Price Received for single-family was 97.4% and 101.9% for townhomes/condos. Median Sales Prices are up 12% for both single & multi-family over January 2021, while Average Sales Prices are up almost 26% for single-family and just under 6% for multi.

The market is still seeing at least 50% of transactions closing in cash – Sellers are selecting cash over finance offers most of the time as it comes down to math – cash deals close faster, less carrying costs and fewer contingencies.  Buyers could end up competing against one or more cash offers and different provisions may need to be factored to compete- all the more advisable to work with a broker that has geographical expertise, since not all markets are the same and within markets there can be micro-markets that call for different pricing or strategy.

There are common denominators for buyers looking to buy real estate in the mountains- they want active lifestyle, convenience to the outdoors and the activities of the area.  There is also an atypical common denominator that many real estate brokers have started experiencing, which is periods of time where they have only one, or even zero active residential listings (single or multi) and the same situation occurring with pending sales. As we get nearer to summer, we usually see an uptick of house listings. The end of ski season usually brings on more multi-family properties.  In the meantime, properties will trickle on and for the vast majority, rapidly go under contract.

Note: January 2022 statistics & info provided via the Colorado Association of Realtors, ShowingTime, ReColorado.