Crested Butte Real Estate Market Trends

What are the Crested Butte Real Estate Market Trends and what are the Impacts?

As we look back over the last 10 years to 2013 we see the bell curve in this chart.

What was the price of a good quality three to four bedroom single family home in Crested Butte? On average between $750,000 up to about $1.5M was the middle of the bell curve – that was pretty average transaction amount. Certainly, there was luxury homes that were $2M, $3M+.

We had very few transactions that were, over $4M or $5 million. In fact, between 2013 and 2018 there were only 4 homes sold above $4M. There have been 25 homes sold above $4M since January 1, 2019.

“In fact, between 2013 and 2018 there were only 4 homes sold above $4M. There have been 25 homes sold above $4M since January 1, 2019.”

As we came out of the recession, right around 2013, and 2014, we were like a jumbo jet taking off the airport. It was a very predictable ascension of price points. In March 2020 Covid hit everywhere including Crested Butte. During the middle of Spring Break in March 2020 – the ski lifts were shut down, there was uncertainty and Gunnison County was shut down to outside visitors. Everything froze for about 90 days.

By mid-June people were back, visitors were back, and buyers were in the market. We saw a big spike in activity and transactions and price points for about two years. Residential real estate was crazy across the country as everybody realized that since they couldn’t go back to the office, and they were working at home – and their home wasn’t set up working remotely. A lot of people wanted to trade homes or trade-up, or move to a different location. We saw a large trend of people moving toward Rural, Ranch, Remote and Resort markets. In Crested Butte we had buyers saying “Well, if I have to work in my home in Texas or Oklahoma – or wherever, I could work remotely in a home in Crested Butte.” The buyer demand in Crested Butte was significant.

And what we saw at the low end was like a giant vacuum cleaner. All the low-end inventory got bought up.

In 2022 with the backdrop of inflation, uncertain economy and the Fed raising interest rates, we starting seeing a softening of residential real estate across the country. This showed up in Crested Butte around Q4 2022. We started to see a lack of inventory, and a softening of buyer demand. Asking prices that were still on a path of ascension were adjusted downward.

What are the Variables Associated With These Crested Butte Real Estate Market Trends?

During covid we had low interest rates – and given higher prices many buyers considered that If they were going to buy a home that may be more expensive, but they can get it with a 3% mortgage interest rate, then a lot of people took that opportunity. So as this bell curve has shifted and now buyers are looking at $2.5M+ for a quality single family home and with jumbo rates at 6.5% or 7% for a second home – that is out of reach for a lot of people. We have more cash buyers at the top of the market – and the profile for a buyer is a very affluent second homeowner who is a cash buyer.

The variables that are affecting this price increase?

COVID Spike
Resort Market – Superball
Desirability Mountain Home
2nd Homeowner – Don’t Have to Sell
Inflation
Building Prices

The covid spike, as I mentioned, the resort market “super ball” effect – in every other market we saw price ascension, but in the resort markets we saw the ball bounce a little bit higher – kinda like a super ball goes higher. The desirability of a mountain home.
Some buyers say, “Well, I’ve got a a choice between buying a home on the beach in a warm, ocean beachfront climate – or -in the mountains”.

And I say, “well, beach is always going to be a beach house, but a Crested Butte mountain home is different. You have great alpine and Nordic skiing in the winter, and the summer and fall is awesome with hiking, mountain biking, wildflowers, fly fishing, golf, tennis, pickleball, festivals & events, beat the heat with cool mountain temperatures…”

So it’s a very desirable place for families and friends and entertaining clients and using your second home in Crested Butte as an opportunity to create your lifetime of memories.

Most second homeowners don’t have to sell. It’s not like a primary market where generally a second homeowner is forced to sell in order to buy the next home. Unless we have some major economic downturn. They are patient sellers, and so don’t have to sell – or don’t need to make significant price reductions.

Unless there is a major world event, or national economic shift with the upcoming November 2024 election – I think our pricing plateau is going to continue and possibly we will see a slow ascension of price points going forward.

Cost to Build a New Home. We’ve seen Inflation affect everything we buy – construction prices rise significantly as well. Guidance from architects and quotes from builders are in the $900 to $1,200 square foot range for new construction.

A lot of that is driven by the higher price points of some of the subcontractors. For many items – supply chain is slow, material costs are higher, but it’s mostly labor – and the higher costs from the local subcontractors. We don’t see that changing a whole lot either.
In the past, buyers would opt to buy a piece of land and perhaps build their dream home at a lower price. With higher construction prices and longer lead times – up to 3 years to completion. We are still seeing a ton of new homes being built.

Many affluent buyers are buying Land and building their dream home despite the higher cost and longer lead time – because they can. They are at the top of the financial wealth pyramid, and they have had a dream for many years, and now building their dream home in Crested Butte. And, I’ve helped a lot of people to purchase that dream, property and, and introduce them to architects and builders so they can build their dream home.

But some buyers say, “I don’t want to wait that long, I want put my head on a pillow in 45 days” So an existing home is a great opportunity to purchase a home and start enjoying the journey in Crested Butte immediately. A remodel can be planned down the road.

So, if you look at all these variables they contribute to the rising tide – and all boats rising… these variables are sort of protecting price points. I think we’ll continue on this plateau, and at some point we’ll be back onto a more predictable price ascension.

So Where Are We Now?

We have seen a plateau with a prices still well above pre-covid times. A reduction in transactions. Discounts from Asking to Selling have increased from near 0% to 4.5% on Average.

As we look toward the end of 2023 and into 2024, I think that Crested Butte real estate market trends will continue and the bell curve will continue to shift to higher end price points, and fewer low-end transactions (and a large number of those homes that sell at the lower end of price scale will need significant updates/remodel $ invested).

What’s The Impact of These Crested Butte Real Estate Market Trends?

I look at this like the pyramid. So if you think at the bottom of the pyramid, there’s a lot of buyers and a lot more people that could purchase $1M – $2M home.
But as you start to move up the price, you start to get to the same home in a more desirable location, perhaps maybe a more luxury home, maybe a bigger home, maybe a nicer home, maybe a newer home, but there’s going to be fewer people that have the ability to purchase that more expensive home.

So we’re seeing a shift in our buyer demographics. More expensive real estate = more affluent buyers coming into the market. This in turn drives the economic engine in Crested Butte. It requires higher-end property management services, and more demand for memberships at The Club at Crested Butte, more demand for court time for tennis or pickle ball, more money being raised at non-profit fundraising events…

Crested Butte is a Special Place – Change…?

There are those who fear that Crested Butte is changing . It is. But it is still awesome. Everything is changing – nothing stays the same. Change is constant.

I thought that during the downturn and recession we saw starting in 2008 we would see people migrating from Aspen, Vail, Beaver Creek, Telluride, Jackson… to less expensive Crested Butte. That did not happen. Those are the glitz and glamour ski resort towns. They attract the Hollywood jet set, the celebrities, the people who want to see and be seen. Many of those areas were mining towns – but gold and silver.

Crested Butte was a coal mining town. I believe we attract a different demographic of people who are hard working, humble, and a strong sense for adventure. It is not about their affluence, but about the experiences and adventures in Crested Butte – the great powder run on North Face, the beautiful hike to the top of Scarps Ridge and the wildflowers, the serenity of fly fishing, the family and friends coming in town, the great things being accomplished with the many non-profits that they support… (ie: 93% of the funds raised to build The Center for the Arts facility in CB came from second-homeowners – this is a great community center for all..).

I hope this is helpful and makes sense to you. It’s the transition that we’ve seen here over the last 10 years. I don’t have a crystal ball other than I think we’re going to continue to see, a price ascension, we will continue to attract great people, we will all continue to be amazed by the vast wilderness, mountains, rivers and streams that surround us. We are fortunate that much of our land is National Forest/BLM land or ranch land that has conservation easements that are in place.
We benefit from the history of this place – and those who came before us. We all have an obligation to carry on this great heritage we enjoy.

Video – Crested Butte Real Estate Market Trends

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