The Breckenridge real estate market has looked to be on an unstoppable streak these past years. With all the recent gains, 2008 now looks like a distant blip on an otherwise consistent upward trajectory.
The causes for this are not too hard to understand: demand is high and supply is low.
However, to understand how the market will behave in the near future, we should also try to understand how the market got to its present state...
Breckenridge's Strong Real Estate Performance
To begin with, increasing economic confidence has caused many to seek out new places to put their money, and investment properties in resort towns like Breckenridge are at the top of the list.
And while places like Vail and Aspen might attract interest from the elite of the elite, Breckenridge has been perfectly placed for those looking for somewhere that feels more like a community, rather than just a resort.
What's more is that developers haven't been able to take advantage of this demand by simply increasing the supply. Unlike Colorado's vast plains, prairies, and farmland to the east, developers in Summit County don't have a lot to work with.
Available land is scarce, so supply has remained limited.
All of these factors have combined to make a market where homes sell quickly at close to their asking prices, which themselves have been increasing steadily. Now the average property around Breckenridge sells for well over a million dollars, and might only stay on the market for a few days.
But will this continue?
Breckenridge Real Estate Trends
While some of the supply pressure in Breckenridge may be lifted by more sellers entering the market, eager to take advantage of high prices, it's unlikely that the area will see any sudden rush of development.
As such, continuing low inventory may even drive down total sales volumes going forward, even as prices continue to rise. This has been backed up by the numbers which showed a year-on-year decline in total transactions near the end of 2018.
Overall, since the supply and quality of Breckenridge property remains relatively constant, changes in the local market are unlikely to come from internal factors. Rather, changes are expected to come due to overall trends in the U.S. luxury property market as a whole.
We should then expect to see at least a small correction going into 2019, as luxury markets across the country cool off from their meteoric rise in recent years.
Breckenridge Real Estate - Expected Changes
Breckenridge's long-term outlook is good. As the market plateaus, some owners might opt to cash in their investment and enter a buyers market on strong terms. More recent buyers might choose to hold, lest they lose out.
Yet, even with a dip in the market, Breckenridge properties are expected to hold their value well in the years to come. After all, the basic fundamentals of the market are good: a beautiful area, short distance to nearby cities, many attractions, and an environment that's unlikely to see a boom in supply.
These factors, combined with the unique market niche that Breckenridge occupies relative to Vail or Aspen, mean that, in the long-term, Breckenridge properties will simply continue to present their value, which is quite high.
So, what's the best move? If you're lucky enough to have a Breckenridge property, then either sell or hold. If you plan to buy, wait a little while longer to see how the market cools in the coming year and pay attention to what's happening in other markets across the country.