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Buying frenzy slows but home prices remain sky-high in Colorado mountain towns

The number of transactions is waning as the supply of homes for sale declines, but buyers continue to pay record-setting prices for high country homes

A home for sale in Frisco on July 14, 2022. Summit County has seen $932.9 million in real estate sales through May 2022, a decline from last year's record-setting pace. (Hugh Carey, The Colorado Sun)
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The blistering pace of home sales in Colorado’s mountain communities is slowing. Finally. 

After sales volume and prices more than doubled in Colorado’s high country valleys between 2019 and 2021, the number of home sales in six Colorado mountain counties declined through May compared with the same period in 2021. And while prices remain sky-high, there are signs that the buying frenzy that spiked prices to all-time highs may be waning.

Could this be a plateau for a red-hot real estate market that shattered records in Colorado mountain towns in 2021? It’s not looking like the funny-money housing market collapse of 2008, but more of a slow deflation as the number of homes available for sale falls after nearly two years of frantic buying and selling.

Jim Renshaw, the vice-president of Land Title Guarantee Co., which has 50 offices around the state, started seeing a slowdown in deals a couple months ago. 

“While the number of transactions are diminishing, the purchase price of the properties is still increasing, especially in those markets where property is finite,” Renshaw said, describing how mountain-town home builders are so backed up that buyers sometimes must wait several years to build a new home on vacant land, which makes existing homes “more desirable and expensive.”

TODAY’S UNDERWRITER

 Here’s the latest from Land Title Guarantee Co. This is the total sales volume and number of transactions through May this year compared with the same period in 2021.

  • Eagle County = $1.59 billion and 677 transactions vs. $1.44 billion and 1,051 transactions
  • Grand County = $430.3 million and 691 transactions vs. $409.4 million and 789 transactions
  • Pitkin County = $1.69 billion and 309 transactions vs. $1.49 billion and 501 transactions
  • Routt County = $584.1 million and 736 transactions vs. $656.6 million and 855 transactions
  • San Miguel County = $547.6 million and 295 transactions vs. $604.8 million and 393 transactions
  • Summit County = $932.9 million and 708 transactions vs. $975.2 million and 1,053 transactions
  • Total for 2022 = $5.77 billion and 3,416 transactions vs. $5.58 billion and 4,642 transactions

But even with the slowdown in transactions relative to 2021, prices through 2022 are setting records, keeping overall sales volume high.

The average home sale in Telluride was $2.7 million through May, which is higher than the previous year. But buyers this summer are submitting offers below asking prices for the first time in a couple of years. 

The sales volume in Routt County through May 2022 is still more than two times greater than the sales in the same five months of all previous years but 2021. And prices continue to stay high in Steamboat Springs and Routt County, with the price per square foot of single-family homes reaching a high of $542.

The amount of money spent on real estate in Eagle County is up 10% through May, with home sales setting records for the first three months of the year, eclipsing previous high points set in 2021. The average sales price for single family homes in Eagle County climbed to $2.7 million in 2022 from $2.3 million in 2021. Buyers have purchased 57 homes priced above $5 million so far this year in Eagle County’s tony Vail, Beaver Creek and Bachelor Gulch communities, mirroring the high-end buying from last year.

There are only four properties in Eagle County listed for sale under $500,000 right now. And many homes in down-valley communities like Eagle and Gypsum are selling for more than $1 million, setting records. That’s prodding many residents to list their homes “as they are trying to capture the high prices and cash out,” Renshaw said  

Prices in Aspen and Snowmass continue to explode, with the average home in 2022 in Aspen selling for $18.7 million, compared with $12.7 million in the first five months of 2021. Average home prices in Aspen through May 2022 are up 21%. But sales are collapsing, with the number of home sales closed in June 2022 down 43% compared with June 2021. The 36 deals closed in June is close to the number that closed in June 2019, which was 32.

“This likely indicates more of a market normalization,” Renshaw said. 

And cash remains king in most resort markets, where fewer home purchases are influenced by rising mortgage rates. Renshaw said his team is seeing more home deals canceled when the stock market plummets than when interest rates rise. Here are the percentages of cash deals in the mountain-town transactions through May this year.

  • Eagle = 43.5%
  • Grand = 44.6%
  • Gunnison = 46.2%
  • Routt = 42%
  • Pitkin = 66.7%
  • San Miguel = 51.7%
  • Summit = 29.9%

This story first appeared in The Outsider, the premium outdoor newsletter by Jason Blevins. >> Subscribe


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