In the last few weeks, there have been volumes of information coming through my inbox about the COVID-19 pandemic, how we as real estate professionals can operate during the shelter in place orders, and predictions about how real estate will be affected. What I know from reading these predictions is that no one knows how COVID-19 is going to affect our economy or the real estate market. We are all doing our best to run the essential parts of our business in a safe and compliant manner. We are handling our existing under-contract files in new social-distancing ways, and spending more time on the phone and Zoom.

And we are all wondering…how long is this going to last? And if you want the no B.S. version, you have come to the right place. Let’s start with – I am fearful of the unknown. But who isn’t? There are a number of factors at play that could make this pandemic be a hiccup in our boom economy, a complete meltdown, or somewhere in between. (I’m hoping for a hiccup). Here are the factors that I am watching and that I believe will determine how our real estate market in Summit County will be affected:


For years, second, third or fourth home buyers have been purchasing resort real estate and using the income from short term rentals to offset some, most or all of their expenses. (See my YouTube video on this!). The short term rental business is huge and has grown exponentially in the last 5 years – according to AirBnB, Breckenridge was the second top revenue producing location in 2017 and the number is most certainly higher than 3 years ago. The industry not only supplements our small amount of hotel rooms which is needed, allowing more tourism dollars on any given night, but it also provides income to the property management companies, cleaners, maintenance crews, etc. But it is also controversial. Some argue that much of our resort housing stock that was once available for long term renters, a.k.a., locals, is being bought up by the affluent and changed into short term rentals, thus dwindling the available rental pool and making existing long term rentals more expensive. Many also argue that buyers who need the STR’s to afford the property, just plain shouldn’t be owning those properties in the first place.


On March 16, 2020, our ski resorts were shut down and on March 26, 2020, every single short term rental in Summit County was shut down.  Guests were asked to leave. Those reservations and future reservations needed to be refunded (or deferred to a later date) to those guests. Millions of dollars of booked income from March 26 to the end of the ski season disappeared in an instant. Owners who rely on that income to support their properties, will not have short term rental income until the stay is lifted. And once it is, who knows if the demand for vacationing in the mountains is going to come back quickly enough to recoup summer income. Additionally, the back-up position of renting the property on a long term basis is questionable. Most of the locals who are renters are in the service industry or work for the resorts. They are all out of work right now.


Sounds grim, doesn’t it? If the stay at home order lasts through the summer, it’s not going to be pretty for our resort communities that rely on millions of tourists a year to support our economy. (See article that Summit had $1.1B of tourist revenue in 2018.)


But even worse is if the ski resorts can’t open in the Fall. That is a worst case scenario that I don’t even want to envision, but if that happens, expect our real estate market to suffer even more as STR owners, who have to have the STR income to keep their properties, sell their properties to not have to support the full cost of ownership.  (Glen Weinberg, Fairview Lending, article for more information and his perspective.) But this certainly won’t happen with every property that is short term rented. There will be a different contingency of owners who don’t need the STR income to maintain their properties.  These folks tend to be wealthier and purchased for their own enjoyment, or for family legacy planning purposes. They will hold on to their properties until the market returns.


Most, if not all wealthy individuals hold assets in the Stock Market. We have seen Stock Market volatility cause dents in people’s wealth and create uncertainty. If some people feel like they have lost a considerable amount of money and want to boost their market holdings, or take advantage of arbitrage opportunities at this time, they may decide to sell their resort property. Their motivation will depend on their individual circumstance.


It’s no secret that many of our property owners in Summit County are from Texas and in the oil and gas industry. Unfortunately, this sector of the economy is suffering right now. Again, stay tuned to see how this plays out in upcoming weeks and months.


Banks and Loan Servicers are changing their requirements due to the COVID-19 crisis, and this is going to have the greatest impact on properties that require Jumbo Loans (over $625,500 in Summit) or Portfolio Loans for non-warrantable condos, condotels, and non-QM mortgages.  These products cannot be resold to the Federal Government, so they must be held by banks or other institutions in their own portfolio.

Let’s face it – most people have no idea about the inner workings of the mortgage and banking industry and how loans are made and resold. If you have a mortgage, you may have obtained the loan from your local mortgage broker, but then it was sold to another company and then to the government (Freddie Mac/Fannie Mae/Ginnie Mae). In order to be resold to the Federal Government, the loan must meet strict requirements, i.e. be a conventional loan, and have other “conforming” features. Loan originators, aka servicers, that are not backed by or regulated by Federal agencies, are responsible for loan payments if borrowers don’t make them.  With record numbers of people who currently can’t pay their mortgages, who is left holding the bag?

Expect to see a couple things: 1) Some loan servicers will go out of business and 2) Jumbo and non-conforming loans will be harder to obtain. The banking industry will continue to sort this out, but the amount of time it will take to get these loan products back online is uncertain.

Some banks, as opposed to mortgage brokers who need to sell their loans in the secondary market, are still making Jumbo Loans. One of my top mortgage brokers who can help with jumbo loans is Rob Kingsbury, KeyBank Mortgage, (719) 930-6004,, NMLS # 234963.


We don’t have a handle on how businesses will be reopened, how they will run, and what the demand for vacations will look like in the next year. Our economy is so heavily reliant on tourism, that without a strong recovery in the travel and leisure market, every single business in Summit County will feel the effects.

The question is, will the dip be 10% or 50%?

What will governmental recommendations allow and restrict for people’s movement and public interactions?

Will people be fearful of travel and public interaction if there isn’t a vaccine available?

Even if there is a vaccine, will people’s habits and perceptions of being in crowds change so that they stay closer to home?

Or will people be so happy to be free from a stay at home order, that we will be fully booked?

No one knows the answers right now.


A second (or third or fourth) home is a discretionary purchase. That is why our market behaves differently than Denver and other primary residence markets. Owners who are not primary owners are wealthy and own numerous assets that they manage. When these owners start to feel the pinch of an economic downturn, what gets sold? Discretionary and luxury items go first. If the pandemic affects our economy for an extended period of time, then wealthy people may start to sell their discretionary assets. Since 2013, at the bottom of our recession market, Summit County has realized a 70% increase in average residential sale price from $500,000 to $850,000. While this increase is partly due to appreciation and partly due to the mix of product sold, there is no doubt that there is equity in these assets.

average property price

Even if owners have to sell for less than current market value, they may not lose any money. Again, no one knows the depth of the effects on the economy yet, but what I know for sure is a family’s Breckenridge ski condo will get sold before their primary residence.


But let me offer an alternative perspective:  The Hampton’s Effect. In the Hamptons, wealthy New Yorkers are flocking to their Hampton homes, and if they don’t own, looking for rentals to quarantine outside the city. These homes are being called “luxury bunkers” in this Bloomberg article. For people who can afford a second home, the market may remain strong because people will always want an escape to a resort area to recreate.


There is also a popular discourse right now that the employer and employee relationship will change after this pandemic. People may demand or be given the freedom to work from home.  If this is the case, a subset of people will not have to live in city centers anymore and may choose to live full time in a resort community. I don’t see this as a flood of demand, since many jobs do require presence at an office or a location, i.e., doctors, nurses, teachers, construction, etc., but for many who are not tied to location, they may take advantage of this freedom. The WSJ reported that a new study estimates that upwards of 37% of jobs can be done from home.


Our high selling season in Summit County is Summer, usually from July 4 through Labor Day weekend. Depending on governmental restrictions/recommendations and the popularity of vacations this summer, we may see less buyers. This will change the supply and demand balance, but to what extent, we don’t know yet.


Obviously I spend much of my time thinking about the real estate market! While some of my thoughts seem negative, I certainly don’t mean to be negative – but I do want to be realistic and as factual as possible. We know that things are going to be different in our market, and I think it’s safe to say that the changes will likely cause a slowdown in sales, and probably downward price pressure. We just don’t know how much or how little.  But, in every market, there is opportunity.


In the coming weeks, I’m going to be rolling out a program where I present price reductions in our market to you. I anticipate that we will start to see a few sellers want to sell quickly in the next couple months, and I will be tracking properties that are experiencing price reductions and the percentage of price reduction. Be watching for that announcement.


I also am offering personalized Zoom or conference call appointments to establish game plans for your individual real estate needs. I am setting these up on weekdays from 10 am – 3 pm in 45 minute time slots at the top of the hour. Those calls help me in my daily business to keep your needs top of mind and share opportunities that fit your needs directly with you. Email me directly if you would like to set up a time. Please let me know how I can be of assistance. And take care and stay safe and healthy!

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