Stating that the real estate market in Custer County is hot right now is an understatement. According to new data complied by the Custer County Assessor’s Office shows that 2020 set a new record for property sales in the Wet Mountain Valley at 591 total sales. And the first quarter of 2021 set a record at 148 total properties sold, a number never seen before in Custer County.
The last time that Custer County broke 500 in annual real estate sales was back in the building boom of 2005. Five years later the area saw a low of just 195 properties sold as the economy reeled from the housing market crash.
Over the past three years, the Valley has slowly caught up to the growing real estate of Colorado. But 2020 turned the warming market locally into a raging inferno.
The COVID-19 pandemic mixed with an increase in broadband speeds and record low interest rates has seen the market in the Valley constantly finding new highs in both sales and in prices. While this new boom has been great for real estate offices and existing homeowner valuations, it is now presenting challenges to the local economy.
An increase in broadband speed over the past five years is allowing people to work remotely easier than before. While connection and speed are still problems, there is now doubt that speeds and connection have improved markedly. More work is being done by the State of Colorado to bring fiber-optic to the Valley. In addition, there is still work being done by local Custer County Economic Development Corp. to have broadband towers installed locally to help with areas that have no, or slow, connections. That project and grants are still in progress.
The challenge is that there is now a record lack of inventory in Custer County. Generally, the spring selling season is a time were the inventory of land and homes for sale is at a peak. But not this year. Homes that hit the market generally sell within a week or two, and vacant land sales are brisk. Real Estate agents are working harder and longer than they have in decades. Thanks to online real estate website, Zillow, it has never been easier for outsiders to shop for homes and land in the Valley.
Builders are also seeing a boom in demand. Most contractors are booked for the next year, and many of the more established contractors are often scheduled for several years. Prices for building a new home are also growing due to an increase in lumber prices. Lumber prices are up about 40 percent from 2019 due to a combination of shipping problems and increased demand for new homes. Skilled labor in the Valley is also in short supply. This is caused by a lack of affordable housing and a general lack of qualified workers in the nation.
The increase in the value of property also means that property taxes are rising. In the story below this article, Custer County Assessor J.D. Henrich explains what the increase in value means for owners in Custer County. While the increase in value and taxes is meaningful, Custer County still enjoys some of the lowest property tax rates in Colorado.
In all, the real estate boom in the Valley is good for businesses, and the economy is at its best in over a decade and a half. The problems that arise from the boom are familiar; affordable housing or rentals is scarce, labor is in high demand, and inventory to sell is low.
According to real estate advertisers in the Tribune, there is no slowing in demand for homes and property in the Valley. It is looking like 2021 will set an even higher record than seen in 2020.
– Jordan Hedberg
