Archive for May, 2011

Breckenridge Colorado Investment Real Estate Under $600K

Friday, May 6th, 2011

Breckenridge Colorado is one of the most popular destination ski resorts in the world attracting over 1.5 million skier visits per year. And with a wide variety of film, music, theatre, and arts and crafts related events as well as all of the outdoor activities that the Rocky Mountains have to offer besides skiing, Breckenridge is a true four seasons destination resort. As a resort market, many considering the purchase of Breckenridge real estate do so with potential rental income as their primary criterion while shopping for property.

Individuals considering the purchase of a Breckenridge single family home as a rental investment property should determine if they prefer to rent the home to visiting tourists for short stays or to rent the home on an annual or seasonal lease basis. Potential Breckenridge house buyers should also consider whether they would like to use the services of a rental management company or to rent the home directly themselves. This is because Breckenridge homes which may not be of interest to local rental management companies for the purposes of short term tourist bookings may still have fairly good rental potential on a longer term lease basis or as a Breckenridge "by owner" vacation rental property.

Sleeping capacity is one of the main criteria that rental management companies will look at when considering a single family home in the Breckenridge Colorado area for short term rental purposes. All else being equal, larger homes with greater sleeping capacity are typically more appealing to Breckenridge rental management companies than smaller homes. Other criteria to be considered include proximity to the Breckenridge Ski Resort and the town of Breckenridge and whether or not the property is on one of the free public shuttle routes. Age and overall quality of an individual home and its amenities such as hot tubs, home entertainment centers, pool tables, etc. also attract the attention of rental management companies and help generate repeat visits by guests regardless of whether or not the property is being managed by a local booking company or being rented on a "by owner" vacation rental basis.

All of these same criteria apply when rental management companies consider a multi-family residence (i.e. condo, town house, triplex, etc.) except for sleeping capacity. In fact, studio condos are one of the most popular lodging options for Breckenridge rental management companies, visiting guests, and therefore Breckenridge investment property buyers alike.

Most rental management companies in Breckenridge Colorado focus on short term tourist rentals and will not accept into their rental management inventories most single family homes in Breckenridge that would sell for less than $600K. This is because such homes are typically smaller and older than the average Breckenridge home and are not located within walking distance of the Breckenridge Ski Resort chair-lifts or town of Breckenridge downtown area. Even Breckenridge homes on one of the the free public shuttle routes within this price range are few and far between.

But, there could be exceptions to this $600K rule, especially when it comes to homes located north of Breckenridge, between Breckenridge and Frisco. If a home with a value of less than $600K in this area has great mountain views, a private hot tub, easy winter access, and is of good overall quality, it could be of interest to Breckenridge rental management companies for the purposes of short term rentals (i.e. tourist bookings). One would have inquire with the property management companies in Breckenridge to see which might be interested in taking such a home into their inventory and what they would estimate its rental potential to be.

Also, many Breckenridge homes that are not of interest to local rental management companies can still generate rental income on "by owner" vacation rental web sites and/or they can be rented on a longer term annual or seasonal lease basis.

With all of this said, if rental income is the primary criterion for someone considering the purchase of Breckenridge real estate for less than $600K, a condo or townhome is at the very least worth considering as the revenue generated from such a property will often be greater than that of a comparably priced single family home.

As a general statement, sale prices of Breckenridge homes and condos have been effected by the market downturn of recent years in a similar manner.  However, to be more specific:

1) Larger, and therefore more expensive, single family homes have been somewhat more effected by the market downturn than smaller and less expensive homes. As of May 06, 2011 there were 218 single family homes on the market in the Breckenridge area. Of these, only 44 were priced under $600K. Within the previous year, there had been 171 single family home sales in the Breckenridge area and 53 of them sold for $600K or less. This means that within the under $600K price range, the supply of available homes and the demand for them is fairly well balanced with less than a one year supply currently on the market. In the over $600K price range, the market is over supplied which has more of a downward pressure on price.

2) Looking at the multi-family residence (i.e. condo, town house, triplex, etc.) market in a similar manner, as of May 06, 2011 there were 364 multi-family residences for sale in the Breckenridge area with 282 having sold in the previous 12 months. Within the under $600K price range, there were 227 active listings and 182 sales in the previous 12 months. Therefore, there is well over a 12 month supply of available listings in both the over and under $600K price ranges.

To summarize, the under $600K single family home segment of the Breckenridge residential real estate market is the strongest segment of the market when analyzed in the above supply vs. demand manner. It is also the segment of the Breckenridge real estate market with the least potential for short term rental income generated through Breckenridge based rental management companies.

It is also worth noting that the Breckenridge multi-family residence market has experiencing something of a resurgence in demand with sales up threefold from the first quarter of 2009 to the first quarter of 2011. If this trend continues through the rest of 2011, Breckenridge condos, town homes, and other multi-family residences could lead the price recovery of the Breckenridge real estate market. And potential appreciation is always a consideration for any Breckenridge investment property buyer.

Copyright 2011 – All rights reserved by Ted Amenta

Notice: Publishers are free to republish this article on an ezine or website provided the article is reprinted in its entirety including copyright and author information, and all links remain intact and active.

Living in Breckenridge Colorado since 1992 and a Breckenridge Real Estate Broker since 1998, Ted Amenta is the Broker/Owner of Amenta Real Estate specializing in Breckenridge investment property as well as 2nd home and vacation real estate throughout Summit County Colorado. Summit County Colorado is home to the ski areas of Breckenridge, Keystone, Arapahoe Basin and Copper Mountain as well as the nearby towns of Frisco, Dillon, Silverthorne, Blue River, Wildernest, and Heeney.

Summit County Colorado Real Estate Market Analysis – Q1 2011

Sunday, May 1st, 2011

Summit County Colorado is located about 60 miles to the west of Denver and is home to the Vail Resorts, Inc. owned and operated ski resorts of Keystone and Breckenridge as well as two other popular ski areas, Arapahoe Basin and Copper Mountain. Lakes, rivers, hiking trails, and biking paths are only the beginning of the spring, summer, and fall attractions which also draw tourism from outdoor enthusiasts. As a result, Summit County Colorado is a true four seasons destination resort real estate market with a significant portion of rental investment properties. And it is Summit County investment property which is leading the Summit County real estate market resurgence from the 2009 market lows.

The Summit County real estate market had more sales in the first quarter of 2011 of both single family homes and multi-family residences (i.e. duplexes, triplexes, townhouses, and condominiums) than there were in the first quarter of 2010. Vacant land sales during the first quarter were the same between the two years. And the first quarter sales of both 2011 and 2010 were considerably more numerous than those of 2009 for all three property types.

The segment of the Summit County Colorado real estate market which has experienced the greatest increase in the number of transactions during recent years is that of multi-family residences (i.e. duplexes, triplexes, townhouses, and condominiums). During the first quarter of 2011, Summit County had 136 multi-family residence sales as compared to 108 and 84 such sales during Q1 of 2010 and Q1 of 2009 respectively. Most of the increases in Summit County multi-family residence sales during these years occurred in the Breckenridge area where investment property is often purchased for rental income purposes. During the first quarter of 2011, Breckenridge Colorado had 57 multi-residence sales as compared to 33 and 19 such sales during Q1 of 2010 and Q1 of 2009 respectively. Therefore, as Summit County as a whole experienced an increase of 24 multi-family residences sold between the first quarters of 2009 and 2010, Breckenridge alone experienced an increase of 14 such transactions with the remaining 10 transactions of the total county increase distributed elsewhere in Summit County which also consists of Frisco, Dillon, Silverthorne, Copper Mountain and Keystone. And as Summit County experienced and increase of 28 multi-family residence sales between Q1 2010 and Q1 2011, Breckenridge alone experienced and increase of 24 such transactions.

Summit County single family homes experienced increases in the number of transactions during the first quarter of 2011 when compared to Q1 of 2010 and 2009 as well. During Q1 of 2011, Summit County had 53 single family home sales compared to 51 and 40 such sales during the first quarters of 2010 and 2009 respectively. The majority of these home sales took place in the Breckenridge area. During the first quarter of 2011, Breckenridge Colorado had 33 home sales compared to 30 and 27 such sales during the first quarters of 2010 and 2009 respectively.

Vacant lot sales in Summit County during the first quarters of 2011 and 2010 were flat at 16 each year with both years being up from 10 land sales in Summit County during Q1 2009. Once again, the majority of these lot sales took place in the Breckenridge area. During the first quarter of 2011, Breckenridge Colorado had 10 lot sales as compared to 12 and 6 such sales during the first quarters of 2010 and 2009 respectively.

Although the number of Summit County real estate transactions have been up during the past couple of years, they are considerably below what they had been during 2005 and 2006 for all three property types. Q1 multi-family residence sales reached a high of 321 during 2006, almost two and a half times the 136 duplex/triplex/townhouse/condominiums sold in the first quarter of 2011. Q1 single family homes sales reached a high of 99 during 2005, almost double the 53 homes sold in the first quarter of 2011. And Q1 lot sales reached a high of 109 during 2005, almost seven times the 16 land transactions during the first quarter of 2011.

Summit County real estate sales prices in during the past few years have reflected the number of transactions taking place and vice versa. During 2009, many Sellers were unrealistic about what prices their properties could command and a large portion of Buyers were nervous about what the future might hold for the Summit County real estate market. The result was the fewest number of Summit County real estate sales in over a decade. During 2010, Seller expectations and Buyer confidence began to come more into alignment and the number of transactions increased. Residential real estate sales in Summit County for the year of 2010 were up about 10% over those of 2009, or 1012 vs 918 transactions. And during early 2011, this trend seems to be continuing. In general, real estate values have been down about a third from their highs for residential property and even more for land.

While the number of Summit County real estate transactions is up so far in 2011, the number of available properties for sale is down. On May 01, 2010 there were 1,589 active residential real estate listings and 390 active vacant land listings in Summit County Colorado. On May 01, 2011, there were 1,348 active residential real estate listings (241 or 15% fewer) and 369 vacant land listings (21 or 5% fewer).

With the number of Summit County real estate sales trending upward and the number of active Summit County real estate listings trending downward, as compared to previous years, there could be market fundamentals to support a pricing bottom. In fact, there have already been some sales this year which indicate prices moving up from previous lows. With the traditionally busy summer selling season around the corner, the next couple of quarters will determine if this is a continuing trend in the Summit County real estate market.

Copyright 2011 – All rights reserved by Ted Amenta

Notice: Publishers are free to republish this article on an ezine or website provided the article is reprinted in its entirety including copyright and author information, and all links remain intact and active.

Living in Breckenridge Colorado since 1992 and a Summit County Real Estate Broker since 1998, Ted Amenta is the Broker/Owner of Amenta Real Estate specializing in Summit County investment property as well as 2nd home and vacation real estate throughout Summit County Colorado. Summit County Colorado is home to the ski areas of Breckenridge, Keystone, Arapahoe Basin and Copper Mountain as well as the nearby towns of Frisco, Dillon, Silverthorne, Blue River, Wildernest, and Heeney.