Housing supply tightening as sales boom
February 18, 2005
EAGLE COUNTY – Continued low interest rates – and the threat of them rising – continue to help convert renters in Eagle County into home owners and to drive real estate sales to new records.It’s also creating a shortage of residential properties, real estate experts said.The booming real estate market started in August 2003 after the passage of time calmed war and terrorism worries, and, if anything, has strengthened as the year progressed, according to statistics compiled by Land Title Guarantee Company.Of the 193 sales in January, 123 were priced at $1 million or less – Eagle County’s definition of entry-level housing. The average sales price of 83 properties sold that were priced at $500,000 and less was $306,820 while the price of property priced at $500,000 to $1 million was $711,773. The overall average sales price has crept upward to $687,939.”Sales have taken off on the expectation that interest rates are going to rise,” said Michael Slevin of Prudential Gore Range Properties.The total dollar volume for the month was $132.8 million – 11.3 percent better than last January’s $119.2 million on 157 sales.
The longer-term draw-down of the number of homes for sale has been driving prices upward and making for a classic seller’s market.Little supplyIt’s the tightest market supplywise that Jim McVey of Slifer, Smith & Frampton has seen in his more than two decades in the real estate business here.”There are more real estate brokers in the valley – 670 – than there are residential listings,” he said. “Properties don’t stay on the market very long at all. Sometime it’s a matter of hours.”And buyers are getting competitive, said Michael Slevin of Prudential Gore Range Properties.”Buyers are very aware that prices are being driven up,” Slevin said. “We are seeing two and three full-price offers on properties.”
Some of those offers are coming despite the fact some potential buyers have never even set foot on the properties they’re seeking.”We’re getting a lot of sight-unseen offers,” said Slevin. “People are using the Internet to take virtual tours of properties and placing a contract on them and doing an inspection of them when they arrive.”Trend to continueThe demand for first and second homes will probably continue, real estate brokers said, and prices will continue to escalate. “We aren’t seeing any slowdown,” said Slevin.Economic and demographic factors – an improving national economy combined with a continuing supply of Baby Boomers who can afford second homes – is the driving real estate markets in resorts to hew heights, real estate experts said.”It may continue for 10 years,” said McVey. “Boomers that are retiring and have substantial funds are looking at resorts.”The real estate boom, however, may become self-limiting, Slevin said.
“The brakes may be put on this thing as a result of inventory levels, not from economic factors,” Slevin said. “The inventory is still so low.”Less inventoryAll the buying activity has reduced the number of residences available to buyers. The number of homes for sale – 569 – is about two-thirds of what is considered average for the county, Slevin said. That’s a decline from last month when there was 611 properties.Buyers purchased fewer top-end properties than in previous months. Only one property priced at $5 million and above was sold. That was a 4,400 square foot, five-bedroom, six and one-half bath slopeside residence in Beaver Creek that sold for $5.3 million. The next most expensive property sold in January was a $4.84 million Bachelor Gulch home. A total of 26 properties priced at $1 million and above sold during the month.
“There’s a limited number of people who can step into real high-end homes over $3 million” Slevin said, adding that, as the busy end of the ski season approaches, “larger high-end properties will go under contract a little more as we have more visitors in town.”Nearly one-third of the entry level housing purchased was in Gypsum and Eagle, records show, where new subdivisions are being built, while the preponderance of sales at the top-end of the scale occurred near the slopes in Vail and Beaver Creek.New properties that are part of $1 billion Vail’s revitalization are being snapped up by buyers -sometime even before ground is broken. Last month more than 500 people bid on 57 properties in Arrabelle at Vail, which will be built in Lionshead by Vail Resorts.”Even with the new product coming on line with the Vail Renaissance, supply will be limited and prices will continue to rise for the foreseeable future,” said Led Gardner of Sonnenalp Real Estate. Last year more than $2.2 billion in real estate on 3,293 transactions occurred in Eagle County – a new record that bettered the old record by more than one-third.Staff Writer Cliff Thompson can be reached at 949-0555, ext. 450, or email@example.com.Vail, Colorado