2020 Colorado Mountain Outlook for Mountain Towns – Part 1
Colorado Real Estate Journal Conference
October 24, 2019
Hyatt Regency Aurora-Denver Conference Center

Ron Wendler – Owner/Broker, Colorado Group Realty (Steamboat Springs):

The market in Steamboat Springs has been very good the last few years. Even though the Total Sales Volume was slightly down from 2018, transactions are down about 10% but price per transaction was up. Buyers and sellers alike have been happy. This has a lot to do with inventory, types of units and costs of construction. Materials and labor have been climbing over the last several years. Buyers seem to be finding a way to buy.

The average price of a home has dropped to $680,000 which is down from this time last year. Average days on market is 93 days compared to 44 for the state of Colorado. Average price of a home is $367 per foot. Although pricing is high, we are beginning to see more custom homes built. Upper end homes and spec homes have been selling well in the $1M – $1.7M range. Finding a home under $500,000 or $600,000 is virtually impossible in the Steamboat Springs market.

On the commercial side, sales of commercial properties except for a few very large transactions has been down because of inventory difficulties. I have a lot of investors that are looking for something that they can make a decent return on and local companies can occupy for their business use. Building new versus finding a property that will fit your use is a tough find in our market. If you're a little flexible, one will always become available. You just have to be patient and loyal to your commercial broker for something will materialize.

Cost to build an industrial type property (warehouse, live/work, commercial with offices/warehouse) you will find that the price per square foot are $175 per square foot for a shell and $80-$100 per square foot to finish it out. It's all relevant to what your needs are. If you can find one for sale, I encourage you to take a strong look at it. Steamboat Springs needs new warehouse/live/work and industrial buildings. The market will catch up to the construction prices soon. There's nothing we can do about it for now. Retail and office space is up also about 15%. $270,000 in 2018 to $375,000 YTD in 2019. Inventory is continuing to be absorbed.

Lease rates remain strong and finding the specific commercial space needed is difficult. Our CAP rates are floating around 7% but that depends on the property and the tenant. All in all Steamboat Springs market seems doing well.