Crested Butte Real Estate Market 101
This article will give you a quick education on Crested Butte Real Estate Market 101 for Buyers and Sellers. Let’s take a step back and take a look at the big picture of Crested Butte Real Estate Market dynamics.
If you are a Crested Butte Seller
Your home is one of many that makes up the Crested Butte Real Estate market, and one of many that will look “similar” in a buyer’s eyes. Your home is being compared against other Crested Butte homes that have sold (comps) and other homes that are for sale (competition). Like in any free market, the economic forces of supply and demand are in play.
If you are a Crested Butte Buyer
There are many choices in location, type of home, and price point in the Crested Butte CO Real Estate Market. Once you have defined your criteria and searching for the perfect mountain home – you may find that your desired choices are limited. It is not uncommon for a buyer to know what they want, and wait on the sidelines until it comes on the market (or there is a price drop moving a home into their target price range.
Crested Butte Real Estate Market Cycles
The same market cycles that are present in the stock market or commodities market (or any free market) also exist in the Crested Butte real estate market. As the US financial markets and national economy go, so goes the mountain town second homeowner real estate market. Crested Butte Homes for sale will be affected by outside economic forces.
Typically, in falling markets, the timeframe for external forces will be swift (prices of Crested Butte homes will fall quickly), but in rising economic times, the timeframe will lag (prices of Crested Butte homes will rise slowly).
Crested Butte Absorption Rate
All Crested Butte properties compete in a larger market space of other homes not exactly similar but in the same price range, and the absorption rate is the estimated time it takes to sell a home given the market of similarly priced homes.
Absorption Rate = the number of sold properties divided by the number of months (timeframe).
Example – Absorption Rate
1) If the number of similar sold homes sold in the past 12 months equals 24, then 24 divided by 12 months equals 2 sold homes per month. The absorption rate = 2.
2) Given the example above, if there are 10 similarly prices homes on the market, then 10 divided by 2 (the absorption rate per month) equals 5 months of inventory.
- If only 2 out of a competing 10 homes per month sell, then which homes will sell? (If you are a seller is your home positioned to be one of the 2 that sells?)
- There will also be new homes for sale entering the market.
Activity is a function of asking price compared to market value. If a Crested Butte home is priced under the average market values and is perceived to be a really good deal, a Seller will get many curious buyers who want to see the home (a showing), and there will be a larger population of Buyers who may want to buy the home.
If your Crested Butte home is priced high given the market and is perceived to be overpriced, then that home will get fewer showings, and there will be fewer Buyers who are exposed to the home and who may want to buy the home.
In general, Sellers can get away with or try a price point that is slightly above average market (up to 10%) and still get some interest and showings, but activity will generally drop off significantly if the price is higher than 10% above the average. Average discount from Asking to Selling for all Crested Butte Single Family Homes in 2016 was 5.9%, and for Luxury Homes it was 6.5%.
Buyers want the Most for the Least.
Savvy agents who understand the market will steer their Buyer clients away from Crested Butte homes that are perceived to be overprices and a waste of time (for the Buyer and the Agent).
For every given market cycle, the variables affecting the number of in-person showings are: price, location, quality (competitive position or perceived value), supply and appeal. On average, every eight to ten showings should result in one offer.
New Crested Butte Listings Attract Buyers who are waiting…
There will be a higher interest and showing frequency when a home first comes on the market. There are educated buyers who are waiting for the home they have not yet found. These buyers have a keen interest and have market knowledge.
Some Sellers believe taking their home off and then back on the market will somehow stimulate demand because the home will appear to have fewer Days on Market. As agents, we can easily see the history of any home in the MLS. Taking a home off the market is ill advised because of the risk of missing a buyer.
Market timing also has to do with the seasonality in Crested Butte. The lifts will stop spinning at the end of the ski season and then Crested Butte becomes a ghost town as most locals are looking for a warm destination away from snow. Crested Butte visitors will not show up because it there is snow everywhere, they can’t ski, or hike on trails and the weather can be variable until early June.
If a Mt. Crested Butte ski-in ski-out home were put on the market in the summer, it may get less interest, showings than if it were to enter the market in the winter when the buyer can literally see or ski in and out of the home.
The same will be true for a home on the golf course at Skyland – during the winter, the buyer cannot see where the fairway, tee box or green are located because they are under many feet of snow.
The two examples above are exactly the reason that I create aerial images of properties and their proximity to amenities. In addition, I use professional photography, video and drone video in marketing my listings which can help significantly to demonstrate to a buyer what they cannot see…
How can I help you with Your Crested Butte Real Estate Needs?
This post Crested Butte Real Estate Market 101 and my monthly market reports on Crested Butte Real Estate, and the level of detail is representative of what you can expect from me as your Real Estate Agent.
I have consistently been among the top real estate agents in Crested Butte, and I strive to exceed client expectations.
Existing Crested Butte Homeowner – If you are interested in finding out what your property is worth, or may be considering turning a chapter in your life – contact me today.
Considering Buying a Crested Butte Home for sale – If you have started thinking about how great it would be to have your own Crested Butte Home and are considering me to represent you as a Buyer, I would appreciate the opportunity to earn your business!
For more info on me and the Crested Butte Real Estate Market – Visit www.chriskopf.com.
Click here to see Crested Butte 3D Walkthrough Home Tours
Click here to do an advanced search the Crested Butte MLS for properties for sale in the Crested Butte area.
For more questions regarding Crested Butte Real Estate Market – Click the Link to download the 2016 Year in Review: Full 9 Page .pdf CB Real Estate Market Report, and you will get my Monthly Newsletter emailed to you with the market reports!
See the big picture and all the details of the Crested Butte CO Real Estate Market – Download Full CB Real Estate Market Report as a .pdf file (more data and charts)
Previews® Property Specialist
Coldwell Banker Bighorn Realty