March 2023 Interlaken Market Update
View looking South East over Lake Como and Geneva Lake in early March of 2023.
Thus far in March, two real estate transactions in Interlaken have occurred. The first was a lease for a 2-bedroom, 2-bathroom unit on Zurich Ct, which was recently renovated and leased for $1,850 per month, $50 more than the asking price, in under 30 days. The second was the sale of a 1-bedroom, 1-bathroom upper unit on Aspen Rd, which was listed for $219,900 and sold after 89 days for $210,900 or $240 per square foot. This unit had also been recently remodeled with new floors and an open kitchen concept and had partial lake views from the balcony.
Comparing this recent sale to similar sales in 2022, where 1-bedroom, 1-bathroom upper units had an average sales price of $179,000 or $204/Sq Ft. These units were not considered move-in ready. A client who recently had their condo remodeled paid approximately $33 per square foot for the renovation. If we adjust the sales from last year to account for the remodeling cost and compare them to the recent sale on Aspen, it suggests a 1.26% increase in price for a turn-key 1-bedroom, 1-bathroom upper unit in 2023.
This conclusion comes from only one sale in 2023. As the year progresses and more sales occur, we can more accurately gauge market movements. Nevertheless, the limited inventory in the market is expected to continue putting upward pressure on prices. The question now is whether the downward pressure on prices from increased interest rates will outweigh the positive effect of limited inventory on pricing.
The Getaway on Lake Como now offers breakfast!
Days on Market is increasing; Is this signaling a market shift?
Higher interest rates and longer market times suggest a changing real estate market, especially when inventory is low. When interest rates rise, it becomes more expensive for buyers to borrow funds to purchase homes. This can reduce demand and prices as buyers become more selective.
In a low inventory setting, such indicators are especially significant as changes in demand can have a larger effect on prices. Of course, these signals may not be definitive, but they are essential to monitor.
A critical factor to remember is that this is a vacation market. We historically experience a slower sales cycle during the winter. The next several months will be telling as we enter the more active part of our sales cycle - The Spring Market.
