|In third quarter of 2017, 142 transactions recorded; younger buyers are key players
Custer County has only one economic driver that relies on property sales, fortunately that economic driver is thriving as property sales hit a new decade high in the third quarter of 2017.
For the first time since 2006, third quarter sales topped 142 transactions and the county is on pace to have more real estate sales than 2006. “Traditionally the third quarter is the best sales quarter for real estate here in the Valley,” commented County Assessor J.D. Henrich. “People start the buying process in the spring and closing takes place on average about three months later.”
What this means for the county is that the severe economic slump that followed the 2008-09 financial crash is finally passed. Builders are reporting that they have long wait-lists for building projects and it has become hard to find contractors, plumbers, and electricians due to the increased demand for new homes or renovations.
“We have had a lot of activity this past year,” explained Carolyn Abraham of Watson Land Company, “and most of that activity is right around the $300,000 mark and below.”
But one of the problems is that there is a shortage of properties in that range. “What is interesting is that we have a lot of retirees and younger families that are moving to the Valley, and we have not seen such a young population buying here in the past.”
For most of these younger families, they are interested in buying existing homes, not building, which is a departure from past real estate booms in the Valley. “Many of them work from home, using the internet, or travel for work,” concluded Abraham.
The new youth population has boasted enrollment at Custer County School reversing a trend of decreasing student numbers for the first time in 15 years.
Third quarter sales continued a trend of increasing transactions that was a 15 percent increase from 2016 and 55 percent increase over the low during the Great Recession in 2009.
The new money flowing into the county has had a direct impact on the unemployment rate in the county. According to information compiled by the Federal Reserve in Saint Louis, unemployment in Custer County has reached a decade low of 2.3 percent. Only four years ago the unemployment rate was at 7.3 percent.
While all of the buying and transactions are good for the general economy, tax revenues show a darker side of an increasing population.
The Custer County Government is facing a budget contraction of nearly $500,000 in 2018. The loss of revenue comes from the interplay of two Colorado constitutional amendments that have the combined effect of constantly pushing down revenues for municipal governments.
The trend of lower residential property taxes has been persistent since 1982 with the passage of the Gallagher Amendment, and this past spring, residential property taxes rates were once again pushed lower by the State Government.
While it is too early to fully understand the financial impact on the county, it is likely that revenues will continue to decrease while usages on local services will keep increasing.
Property values have not increased with the flurry of new homebuyers unlike the Front Range of Colorado where many homes are sold the week they are listed for sale.