THE CLARKE AGENCY, INC.

Cathie Elliott, Real Estate Broker/Owner

Just like local Gunnisonites, the local real estate market just isn’t following national trends. People wonder if the market has “bottomed out”, but one never knows that until the market starts rising again. It seems to be a buyer’s market right now. There is an increase in affordable properties on the market, as real estate has been devalued and prices have been driven downwards. A buyer’s market means that economic conditions and power shift from the seller to the buyer. Another factor that makes this a great time to buy is interest rates. Rumor has it that interest rates haven’t been this low since World War II.

According to Multiple Listing Service (MLS) statistics, 43 homes in and around Gunnison have sold since January 1st. The average days on the market were 236, with an average sold price of $272,919. Typically, these single-family homes sold for 93% of listed price.

With regard to condominiums and townhomes, there have been 9 sales since the beginning of the year, with an average of 326 days on the market, and typical purchase price of $165,265. These sales came in at 94% of the listing price.

Vacant land sales have been scarce, as home prices have been dropping. There have been 13 local land sales since the beginning of the year, with an average sales price of $127,140, 298 days on the market, and at 96% of listing price.

While it might seem odd that real estate is selling so close to the listing price, it appears that sellers that are reducing their prices are getting them sold…thus the slim sales price to listing price margin. Is this a “market correction”? Probably not. It’s more likely a simple case of supply and demand. Basic economics shows that a large supply and limited demand forces prices downward. Until the supply starts to wane, prices will still be lower than they have been for awhile.

Many buyers are wondering why sellers aren’t reducing their prices further, if they really want to sell. A large number of sellers are so highly leveraged (between buying when prices were higher, and refinancing to pull out equity in their homes), that they can’t come down on price without coming to closing with money. (Unfortunately for some sellers, that has been the case.)

In prior years, 3 strong buying markets were present that aren’t back yet, in significant numbers. Parents of WSC students used to get home equity loans and purchase a house or condo for their student, rather than renting. With values lower all over the country, parents haven’t had the equity built-up in their homes to refinance and pull out additional equity. Investors that flocked to the area to capture a good return on their investment through rental income or buy/sell transactions have also been scarce. The market has made them nervous and investor lending has tightened up. Second home buyers have been cautious. While this market isn’t as price sensitive, this group of Gunnison lovers are waiting to see what will happen with the economy, elections, and consumer confidence.

Based on MLS reports, there is definitely an overflow of unsold homes in local markets. For the real estate investor or homebuyer with good credit, decent income, and the money for a down payment, a down market makes an excellent financial opportunity. The first step in taking advantage of the current financial climate is to get pre-approved for a mortgage. From there, you can begin the process of searching out great deals in the housing market.