GLENWOOD SPRINGS—Every day, Phil Weir and Bob Hinkey, two Realtors with longstanding local experience, see that Glenwood Springs’s real estate market is steadily improving. But neither Realtor anticipates residential or commercial real estate to make the drastic upward moves it made pre-2008 as we head into 2013 and beyond.
“People [used to have] the incredible idea that real estate values always go up,” said Weir, who recently launched Western Slope Real Estate Group after selling real estate in the Roaring Fork Valley during the ‘80s and ‘90s, moving out of the country then returning in 2008 to work for Mason Morse Real Estate. “Everybody thought they were untouchable. They thought you could buy something for $75,000 and turn around and sell it the next year for $150,000. It doesn’t work that way anymore.”
Weir, who focuses primarily on residential property, said it’s a whole new game now.
“It’s a big, big slap,” he said. “Real estate can no longer be associated with two words: ‘appreciation’ and ‘investment.’ People used to buy a property and then sell it two years later, and it always went up. Now we’re realizing that’s not the case anymore.”
And for Bob Hinkey, an owner/broker with Bullock Hinkey Real Estate, the commercial market operates differently than it used to, too.
“Generally, the [commercial] market is really soft,” Hinkey said. “We’re at about 35 to 40 percent of where we were four years ago.”
Hinkey said banks are more cautious about lending money to purchase a commercial property (“they’re more concerned about the monthly expenses involved in maintaining a building,” he said) but that commercial leasing has improved in the wake of an otherwise soft market.
“It’s fairly strong,” Hinkey said of the number of signed commercial leases.
Residential: Mom and Dad’s house
Weir said that the country – and the local market – seem to be returning to the values that people living in the mid-20th century had about home ownership.
“Mom and Dad used to buy a house to live in,” he said, referring to the motivation of home ownership when a house was purchased, not as an investment but as a long-term, and sometimes lifetime, place to call home.
During 2006-08 when real estate values were peaking, many buyers were purchasing homes they couldn’t afford, and when the downturn hit, property was unloaded at huge losses.
“In Aspen Glen, there was a bunch of stuff that had been priced at $2 million selling for $800,000,” Weir said. “With foreclosures and short sales, incredible stuff was moving through inventory.”
Now, Weir said, the local market has probably reached a point where it’s stopped going down. There’s not much on the market, which is causing prices to rise slightly.
“Because of the scarcity of supply, prices are starting to come up a little bit,” he said. “But it won’t ever be like [the high-end prices of] 2008. That was once in a lifetime.”
Weir said one positive trend he’s seen during the past couple of years is that more people have been able to afford real estate with prices lowering to affordable levels for many people.
“In the past year and a half,” he said, “I’ve sold seven houses to seven teachers. They’ve been in the $190,000 range. And that’s a good thing.”
Commercial: A car dealership kind of town
Both Weir and Hinkey agree that commercial real estate behaves far differently from residential property. And within commercial property, nothing is moving as well as Glenwood’s car dealerships.
Hinkey has a unique perspective in this area. In addition to being an owner and broker with Bullock Hinkey, he’s been a commercial/fleet sales representative at Berthod Motors for decades.
“Glenwood Springs is really becoming the Western Slope’s car town,” Hinkey said of the range and number of automotive dealers. Berthod is currently adding a large addition to its dealership on 27th Street and South Grand Avenue in south Glenwood Springs, and a Chevrolet dealership just opened on Highway 6 in West Glenwood as other dealerships are moving and expanding.
“There’s a need for [dealerships],” said Hinkey, “and it’s a good time for it. It’s a good thing for the town, for our local workers, and a good thing for our tax base.”
Although commercial properties may a bit behind residential sales, buyers seeing a good opportunity are picking up real estate at good prices.
“Buffalo Valley just sold,” said Hinkey of the restaurant and motel off of Highway 82 south of Glenwood. “The fellow who bought it stole it. It’s a terrific property. He got a great deal.”
The former Sopris Restaurant near Cattle Creek on Highway 82 has been closed since 2009 after it re-opened as the nightclub Dos Hermanos. Hinkey said that building will not share a similar fate as Buffalo Valley.
“It’ll get torn down,” he said of the western style structure that’s part of the stalled Bear Chase development, though Hinkey didn’t know when demolition might occur. “It’s in bad shape.”
What lies ahead
As far as the future goes, Hinkey said that commercial properties are generally the last segment of the real estate market to come back, though smaller, single-user commercial buildings – in the 1,000- to 2,000-square-foot range – generally fare better.
Currently, Weir said, the inventory is low and the buyers are becoming more interested.
“Things are selling,” he said. “Houses in the $300,000 to $400,000 range are getting snapped up. People are looking. And more and more, Glenwood has caught on as a second-home area. Aspen is too expensive, so I’m seeing people buying here, like at Ironbridge, and renting out their houses until they’re ready to live here part-time themselves.”
Ultimately, Weir said that the 2008 downturn has shown that real estate cannot be looked at as it once was.
“The future? I think we’ll see prices go up based on inflation,” he said. “But we’re not going to see houses refinanced so people can go on vacations. I think we’ve realized that an artificial boom is not based on real estate being an actual commodity to count on.”