Colorado mountain town real estate settles from pandemic frenzy with a big drop in deals, but prices remain record-high

It looks like mountain towns have finally shook off the real estate buying frenzy triggered by the pandemic. The number of homes sold in 2023 is down and so is total sales volume compared to the all-time highs set in 2021 and 2022. 

But two critical metrics have yet to budge from the pandemic boom: prices remain at record levels and the number of homes for sale remains at historic lows. 

“I look at all this and it’s so interesting. We’ve got higher interest rates and increased cost of ownership with higher taxes and higher insurance rates. All these things you would think would bring the prices down,” said Dana Cottrell, a longtime Summit County broker and president-elect of the Colorado Association of Realtors. “I mean look at all the things conspiring to bring these prices down yet the supply and demand factor is stronger than everything else.” 

Around Steamboat, the average price for a single-family home hit $1.73 million in 2023, an 85% increase from the pre-pandemic average of $935,000. Home prices are up 12% in Telluride in 2023 and closer to 20% in Mountain Village. 

And around Aspen, where prices are always mind-boggling, there were just as many homes sold for more than $10 million and more than $20 million in 2023 as the previous, record-setting year. A Florida car dealership owner set a record for Aspen in September when he paid $76 million for a slopeside manse.

“The upper end of the market is still very much driving volume and driving activity,” said Aspen broker Chris Klug, whose Klug Properties team has close to $60 million in sales under contract in the first week of January. “People still want to be here and there’s strong demand and the inventory is constrained. It’s basic supply and demand economics.”

Brokers are still crunching numbers but 2023 home sales in most high-country communities will be down 20% to 30% in total sales volume compared to 2022. The number of transactions is down roughly the same percentage. But these numbers remain 20% to 30% above 2019.

Covid lured a lot of newcomers into mountain towns, creating a wave of buyers that more than doubled home prices by 2021. The urban exodus of deep-pocketed pandemic buyers may be waning, but the prices they paid are not. And those new arrivals are not returning back to the cities and selling their mountain homes.

“We haven’t had this post-Covid gap,” said Jon Wade, a longtime Steamboat Springs broker who estimates he helped about 500 newcomers find homes in the Yampa River Valley during the pandemic “and I can think of only two who have left town.”  “You would think we would have been slow after those big years.”

San Miguel County sales topped $1 billion in 2023, which would be a banner year if not for the frenetic 2021 and 2022. 

“We saw incredible appreciation due to demand during Covid and we have not lost any of that value at all,” said Telluride broker TD Smith.

And brokers in mountain towns say new crackdowns on short-term rentals and additional regulations around home-building are making home ownership more challenging for working locals. 

“The building codes here just make it more and more expensive to build a home and that eliminates affordable options for a lot of people,” Cottrell said. “Not being able to use a home as a short-term rental is another problem for the buyer pool. There are fewer ways than ever before to afford a home up here.”