County’s real estate comeback continues

By the numbers

198: Real estate transactions in October.

5: Bank sales in October.

1,464: Closed transactions through Oct. 31.

$1.398 billion: Value of real estate transactions through Oct. 31.

Source: Land Title Guarantee Company

EAGLE COUNTY — About a year ago, Jim Flaum said 2014 might be seen as the year the Vail Valley real estate market really turned around. A year later, Flaum, the managing broker of Slifer Smith & Frampton Real Estate, said the year hasn’t really met his expectations.

Not that this has been a bad year for real estate. Far from it. Through Oct. 31, the number of closed transactions filed with Eagle County is down fractionally for the year — 1,464 closed in 2014, while 1,475 deals closed during the same period in 2013. The value of those sales, though, is up by 23 percent. That puts the valley’s real estate market on track to significantly exceed 2013’s $1.4 billion in closed sales.

That’s good news. But Flaum said he expected a bit more, especially on the number of transactions. Flaum, who leads the valley’s largest real estate company, said he expected more “movement on price.”

But there has been movement, particularly at the upper end of the market — property priced at $2 million or more.

“A lot of people are doing well in the market, and they may be reluctant to pull their money out of it to buy real estate.
Jim Flaum
Managing broker of Silfer Smith & Frampton Real Estate

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In October alone, deals closed on 18 units priced at $2 million or more. There were five sales of $5 million or more, including a home in Vail for more than $18 million. Flaum said a similar-sized deal is expected to close soon.

Price is Right

Whether a home sells for $2.5 million or $250,000, price remains a crucial part of the deal these days.

Michael Slevin, the managing broker at Berkshire Hathaway HomeServices Colorado Properties, said that beyond price, buyers seem more willing to wait for the right unit to come along. Whether people are buying a first home or a ski-in/ski-out vacation home, Slevin said buyers are looking for more than just something to buy.

That’s a good sign, Slevin said.

Low Inventory

At the moment, though, there simply isn’t much on the market.

As opposed to the depths of the economic slump, when for-sale signs lined the streets of many residential neighborhoods, Flaum said buyers today have far more limited choices. Prices reflect both reduced supply and the fact there are far fewer bank-owned properties on the market than there were in 2011 and 2012.

“If you’re looking for a four-bedroom in Eagle Ranch, there might only be a couple out there,” Flaum said. Just as important, though, is the idea that a buyer’s investment will gain at least some value over the years.

“People want to buy something that appreciates over time — even if it’s just 3 or 4 percent a year,” Flaum said.

But it looks as if prices are starting to rebound somewhat, due at least in part to limited inventory. That’s why Flaum believes the local market has bottomed out. New homes are gradually coming on line, which will help supply without harming demand.

And, Slevin said, the valley has been historically slow to match national trends. The fallout from the 2008 financial crisis wasn’t felt in full in the valley until 2009. Now that national and Front Range trends show more strength in housing, the local market seems poised to follow.

While strength is returning to the local real estate market, Flaum believes the nation’s stock markets may play a role in holding back purchases in the market’s high end.

“A lot of people are doing well in the market, and they may be reluctant to pull their money out of it to buy real estate,” Flaum said.

If history is any guide, though, then the valley market’s gradual comeback may get something of a boost from the 2015 FIS World Alpine Ski Championships in February.

Brokers at the time claimed the 1989 championships provided a significant boost to the local real estate market. The same was true, to a lesser extent, after the 1999 event.

With Vail and Beaver Creek more built-up and built-out, Slevin said he doesn’t expect the Championships this time to jolt the market 1989-style.

The Championships “should drive traffic,” Slevin said. “There will be people who become enamored with the Vail Valley and some will want to invest here. I don’t know that it will materially affect our market, but it will have a positive effect on all of us.”

Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, or @scottnmiller.

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