Sunday, November 4, 2007

Cheap homes hard to find
Sub-$500K market shrinking quickly
By Tom Ross
Sunday, November 4, 2007

Steamboat Springs — Properties priced below $500,000 in Routt County still account for a large chunk of transaction volume. However, the supply is drying up, and the monthly number of sales of properties less than a half-million dollars has declined by 32 percent since the first quarter of 2007.

Mirroring that trend, the dollar volume generated by sales below $500,000 is declining sharply in terms of percent of gross dollar volume in the county. And the gap between costly and cheaper real estate sales is widening with the growing number of sales greater than $3 million.
Bruce Carta of Land Title Guarantee Co. reported that six transactions valued at more than $3 million closed in September, bringing the year-to-date total to 23. Those six properties had an aggregate gross dollar volume of $22.6 million, or 24 percent of the month’s total of $94.9 million.

Also in September, sales of all properties valued at less than $500,000 accounted for 57 transactions. They had an aggregate value of 17.73 million, or 18 percent of the Routt County total for the month.

The entry-level numbers are down from July, when 77 transactions accounted for $24.8 million and 22 percent of gross dollar volume.
Sub-$500,000 transactions totaled 84 in March and represented 30 percent of gross dollar volumes.

Realtor Jon Wade, a broker owner at Colorado Group Realty, said he thinks city ordinances requiring developers of new housing projects to provide affordable units are playing a role in the trend.

Wade said earlier this year, there was an awareness growing in the marketplace that modestly priced multi-family housing units — such as those in the Whistler Road neighborhood — never would be replicated at comparable prices. That awareness prompted buyers to take action, and prices responded.

The need for market-rate units to subsidize the affordable units contributes to higher prices, he said. “It makes it really hard for the middle class to get market-rate affordable units,” Wade said. “I want my friends to be able to get affordable housing. But I think there are ways to do it that doesn’t drive up the price.”