Vail area real estate transactions dip, prices still rising
There’s a real shortage of homes for sale under $1.5 million
It looks like Eagle County’s real estate market is going to surpass $3 billion in sales for the second consecutive year. But activity may be slowing somewhat.
After spending the first half of this year running ahead of 2020 figures, the latest data from Land Title Guarantee Co. shows a bit of a slowdown in August.
Numbers from April, May and June 2019 are skewed by the near-shutdown of the local real estate business due to the COVID-19 pandemic. But the market started a remarkable advance in about July of last year.
Thanks to pent-up demand caused by the 2020 second-quarter slowdown, July transactions this year were down 14% from the previous year. August transactions were down 26% from the same month in 2020.
Mike Budd, a broker in the Edwards office of Berkshire Hathaway HomeServices Colorado Properties, said the biggest problem is inventory.
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Budd noted that he expects to see a bit of a downturn from 2020 in terms of transactions.
“We’re at an all-time low in inventory,” particularly for homes priced at $1.5 million and less, Budd said.
That portion of the market accounts for 75% of all transactions.
A shrinking bottom
But the $500,000 and below market continues to shrink. For the year through Aug. 31, only 20% of all transactions fell into that price range.
Part of the growth in the market from $500,000 to $1.5 million is low lending rates. People who were once shopping for homes in the $800,000 price range can now put the same amount of monthly payment into a home priced at $1 million, Budd said.
The current real estate boom isn’t limited to just Eagle County. Land Title also recently released a report from other mountain communities for the first half of 2021. Transactions and prices are up through most of the surveyed counties.
The biggest transaction increases came in Gunnison, Pitkin and San Miguel counties. Gunnison County, which includes Crested Butte, saw the biggest jump, with transactions more than doubling from the first half of 2020.
Budd noted that Vail Resorts’ 2018 acquisition of Crested Butte has helped fuel that area’s real estate market.
“I have a friend in Crested Butte who’s selling almost a house a week,” Budd said.
Eagle County’s transactions
Even with the increase in activity, Gunnison County’s transactions for the first half of the year are just more than half those recorded in Eagle County for the same period.
Summit County’s market in the same period saw virtually the same number of transactions — 1,338 — as Eagle County at 1,352.
Matt Fitzgerald, the Eagle County president of Slifer Smith & Frampton Real estate, noted that Summit County has a “broader range of prices” than seen in Eagle County.
While transactions have dipped, prices continue to rise. That’s the first rule of economics, Budd said. High demand and low supply causes prices to appreciate.
Both Budd and Fitzgerald said that, absent some sort of shock to the global economy, they expect that appreciation to continue.
Fitzgerald noted prices locally are supported by tight supply.
New construction is contributing only a little to supply across Western Colorado. In Eagle County, new construction accounted for only 6.3% of dollar volume in the first half of 2021.
“I’m still optimistic about Eagle County,” Budd said. “I don’t see any (price) diminution right now.”
250: Approximate current home listings in the Eagle River portion of Eagle County.
234: September real estate transactions in all of Eagle County.
61: Current average days on market for home listings.
120: Average days on market in September, 2020.
Sources: Land Title Guarantee Company, Slifer Smith & Frampton Real Estate.