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You’ve got to wonder. The economy hit the skids hard in 2008. Markets in most parts of the country are down significantly. And Summit County is no exception. Our total volume of real estate transactions was down 42% in 2009 vs 2008. And it would have been much worse had not a couple of large projects that mostly went under contract in 2008 completed construction and closed in 2009. Hard numbers to swallow. Yet, savvy investors, with both the money and the foresight, have always come out of market depressions stronger and more financially capable of meeting the future.
Typically, they know that, if you can catch the market at or close to its bottom, and acquire property at those low values, the market then offers a lengthy upward trend. Most statistics, and pundits, are now arguing for the uptrend. December, for example, was the one month of the year where sales exceeded those in 2008. Most of our active Realtors are reporting increased activity, from leads earned on the websites, to visitors actually looking at property with a serious intent to purchase. And they are writing more contracts. In December, we also had our largest single residential sale in history – over $8 million, or about $2.5 million over the previous high sale. So, indications are certainly looking up.
Commercial sales typically follow residential. Developers and investors have hunkered down, and that is reflected in reduced building permits, and very few new developments coming on line. Nevertheless, those who are building report that they are getting construction bids, and securing construction contracts, that reflect a 30-to-40% reduction in cost from the same time a year ago. Material costs have also come down comparatively. Finally, our community development departments are not overburdened, allowing them the ability to more quickly review plans. And they have exhibited a willingness to consider and approve more easily.
So, if you can catch the lower end of the market, get designs approved quickly, and secure much lower construction costs, it makes perfect sense to invest in the market now. And your project should be finished about the time that the market is ready for it.
Oh, I should also mention that development properties, because of the lagging market, have also come down in price. Take, for instance, a prime property on Main Street in Frisco. These two lots, purchased together, have been reduced from $4 million to $2.750 million. The Summit Daily News currently occupies the building on these 1.3 acres. And while, of course, the two lots are available with the building, I’d anticipate that the only use a developer might have for the building is to lease it out during the interim needed to get approval of development plans from the Town of Frisco. The News will eventually re-locate, but a prospective purchaser might talk to the publisher about doing a lease-back during that period.
The acreage would support a number of commercial models, but it is known that the Town of Frisco is encouraging more beds for the community, and a small hotel would be an ideal use. Of course, since the property is within two blocks of the center of Town, and most fairs, festivals and street-level activities
(which tend to attract 10,000 or more visitors), start at the intersection of this property with Main Street, retail development that attracts pedestrian traffic could also be considered. That could be combined with upper level residential condos or apartments for a mixed-use development. The Town was an early adopter of green building standards, and we can recommend architects versed in green, sustainable design, as well as local builders known for quality and on-time delivery. |
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