Berkshire Hathaway: Real estate inventory levels low and interest remains strong in new year (column)
2017 was a good year for the Vail Valley residential real estate market. While total unit sales were only slightly up (0.8 percent), overall dollar volume increased 12.75 percent due to both luxury/higher-end sales activity and values trending up valley-wide.
The most noticeable residential gains were in the resorts of Vail and Beaver Creek and downvalley in Gypsum and Dotsero, where unit sales increased almost 55 percent and dollar volume rose 71 percent. The strength in the western part of the market is a direct result of new inventory being brought to market coupled with high-demand.
The good and challenging news is that inventory levels are down 5.4 percent from a year ago (and down 25 percent from the start of 2016), hovering around the lowest levels in at least 12 years. We expect buyer activity and interest to remain strong, and if inventory comes to market this spring, 2018 should be another strong year.
In summary, we are back to Economics 101: supply and demand. Available inventory, if stagnant, is generally a product of being priced too high for the market. Buyers today are much more critical of pricing, often unwilling to pay above market value unless the property is new and/or irreplaceable in its location.
What it means for buyers: The low inventory our market is experiencing has not slowed the pace of showing activity. There are many qualified buyers throughout the valley in a variety of price points and geographic areas. For buyers in today’s market, be ready to respond quickly to new opportunities that become available. This includes financing, if applicable, and availability to view properties in person or via virtual reality tours.
What it means for sellers: Sellers have a more challenging situation, even in today’s low-inventory, active market. While low inventory allows your residence to stand out, sellers often get overzealous in their pricing, thinking that low inventory should cause a rise in home values where they can “test” market prices.
Buyers in today’s market are using the same data as sellers to find “market value.” Activity for most listings is highest in the first two to three weeks, and then, if there are no offers or if it is not under contract, the property risks sitting on the market for a undetermined amount of time, subject to pricing discussions and few showings.
For all parties, be prepared, know the market and expect to be able to respond in a timely manner to achieve your real estate goals. For a full copy of the report, visit http://www.bhhscoloradoproperties.com.
Michael Slevin is the president of Berkshire Hathaway Colorado Properties.