Housing and Real Estate in the Vail Valley
EAGLE COUNTY When Edwards contractor Larry Castruita received building permits for a new home and a remodeling project, he was one of many contractors who were busy in 2004.Castruitas permits, along with all the others issued last year, show the countys building industry is recovering from an economic recession, war and terrorism worries.Statistics logged in 2004 across town and county offices reveal figures for building permits, foreclosures, tax sales and bankruptcies that indicate an improvement over 2003.
In 2004, foreclosures on property across the county dipped 7 percent from last years 263 to 245. Theyre considered one indicator of the health of the economy. Foreclosures are made by lenders when a borrower on a property fails to make mortgage payments. The bank takes possession of the property after the public trustee in the county treasurers office sells the property for the lender. At the height of the building boom in 2000, only 64 foreclosures were recorded. The record year for foreclosures 1987 saw 599.BankruptciesThe second cousin to foreclosure bankruptcy also declined. In 2003, there were 35 business and personal bankruptcies of all types logged in Eagle County. During 2004, that number dipped 26 percent to 26.People go into bankruptcy to stop everything and reorganize, said Kathy Knox, deputy public trustee. It prevents creditors from going after them.
A record number of building permits 686 was issued by Eagle County in 2004. Building permits are one indicator of how busy the building trades were and will be. The permits translate into 146 new single-family homes and 239 multi-family homes. These building permits carried an estimated value of $223 million. In the previous record year of 2000, a total of 557 permits, carrying a value of $322.8 million, were issued. The slimmest year in the last five was 2002, when $135 million in building permits were issued.The new records come in the midst of a 14-month-long real estate boom that will see a new record of at least $2.2 billion in sales when the final statistics for 2004 are added up next month. The previous record, set in 2000, was $1.7 billion.
Continued low interest rates coupled with a rise in the disposable income that baby boomers have are driving the trend, real estate brokers said.Town building permits Vail led all towns in the county in the number of permits issued and in the value of the new buildings and remodelings, with 322 that carried an estimated total value of $131 million.Vail is in the early stages of a $1 billion revitalization of Vail Village and Lionshead that will occur over the next six years. Avon saw an 8 percent decline in the number of building permits issued from 131 last year to 121 in 2004. But the value of those permits jumped from $11.4 million in 2003 to $16.2 million in 2004. The number of residential permits issued was the same 20 while the commercial square footage of the permits jumped from 97,959 in 2003 to 140,059 in 2004.
Minturn issued 37 permits, but no valuation information was available. Most were for remodeling projects, but that may well change next year. Earlier this month, a Florida-based real estate developer, the Ginn Company, announced a $32.75 million purchase of 6,000 acres between Minturn and Red Cliff. The company is exploring building a private ski area and golf course community, and early discussions with the town centered on building as many as 500 homes. Building was a big business in Eagle, which issued 169 building permits 152 for dwelling units. The total estimated valuation of the residential and commercial permits was $38.6 million. Gypsum surpassed Eagle in the number of building permits issued 173 but many of those permits were for remodels. The valuation of the permits issued by the town was just over $16 million.
Tax salesWhen residential and commercial property taxes arent paid, the county sells a tax certificate on the property at auction to investors for the amount of the unpaid taxes plus interest and other fees. If the owner of the property doesnt pay the taxes and penalties in three years, the property becomes owned by the person purchasing the tax certificate.Based on the number of tax certificates sold by the county during tax sales, the number of people paying their taxes in 2004 also improved over 2003.
County tax sales in 2003 yielded $517,854 with 118 tax certificates sold. In 2004 the county sold 81 tax certificates and collected $359,169. All those sales reflect real property and include any additional bid made by investors during the tax sale.Most of the properties sold at the countys auction in November are eventually paid off by the delinquent property owner, said Margo Painter, deputy treasurer. Investors purchasing the tax certificates for properties with delinquent taxes earn 12 percent interest, or 9 percent more than the prime rate, as the law requires.
EAGLE COUNTY Just when you thought local real estate sales activity couldnt get much hotter, Novembers sales turned the thermostat up another notch.That months sales volume $216.1 million is the second largest on record. Activity for just the last 11 months has already set a new annual record of $1.945 billion on 2,999 transactions. The previous record, $1.7 billion, was set in 2000. War, terrorism, recession and other factors caused real estate activity across the county to dip to $1.4 billion in 2002. Next to tourism, real estate and related businesses are the second largest industry in the county.A combination of factors has kept real estate hot since August 2003. Continued low interest rates are allowing renters to become owners and are allowing sellers to purchase larger properties. That trend is providing continued momentum to the market.
Its a trickle-up. When more people get into entry-level residences the people selling are able to move up, said Michael Slevin of Prudential Gore Range Properties. Everyone is upgrading their residences.More trendsThe national economy continues to brighten, but the Jekyll-and-Hyde stock market has not, and that has driven people to invest in property, real estate professionals said.Adding more momentum is a tightening supply of properties for sale. It has diminished nearly 40 percent to about 750 properties. As that supply shrinks, prices have risen. The average sales price for property sold in November in Eagle County topped $764,000. Thats up more than 20 percent from last Novembers $627,000.Sales of entry-level properties, those priced at under $500,000, were the busiest market segment with 141 transactions totaling $42.48 million. That was 57 percent of all transactions. The next largest sales total occurred in the $500,000 to $1 million market segment with 53 transactions and $35.7 million in sales.
Activity at the other end of the economic spectrum included the sale of a $5.5 million single-family residence at the Diamond Star ranch east of Eagle, the sale of a $4.9 million single-family home in Beaver Creek and a $4.49 million residence in Cordillera.Both Slevin and Slifer, Smith & Framptons Jim Flaum said they see the boom continuing through the ski season and beyond.As long as the economy continues to grow and the geopolitical arena remains somewhat stable there arent any large indicators that we will slow down, Slevin said, adding that the boom is virtually unprecedented.Flaum said the boom is being aided by a demographic trend. Baby boomers are buying vacation homes at premier locations around the world, Flaum said. Flaum expects the buying trend to continue for at least the next eight years as the baby boom generation continues to flex its economic muscle, he said.Vail deja vuBoth envision the $1 billion revitalization occurring in Vail Village and Lionshead over the next five years to cause the Vail market to heat up, too.The focus has been on Beaver Creek, Bachelor Gulch and Arrowhead, Slevin said. Now, for the first time in 20 years, it will be on Vail.Vail Resorts, which is calling its $500 million of development Vails New Dawn, announced it will be developing a luxury, 39-room RockResorts hotel in Lionshead and 70 luxury residences, commercial space and a skating rink over the next two years.Decembers sales should show a huge bump over last years total of $185 million because they will contain the $32.75 million sale of 6,000 acres surrounding Gilman to Florida developer Bobby Ginn, announced earlier this month. Ginn hinted that he is looking at developing a private ski area and golf course community on the land formerly owned by the New Jersey Zinc Mine.Type “minturn” into the http://www.vaildaily.com search engine for more information on developments in the possible annexation of Gilman by the Town of Minturn.Vail Colorado, Real Estate
EAGLE COUNTY Buyers entering the smoking-hot real estate market here are gobbling up properties at a record pace and driving prices sharply upward. Its a classic sellers market that may re-ignite development pressure.Real estate and development activity during the booming 90s peaked in 1999, then dipped by more than 20 percent after the recession of 2000 and terrorism of Sept. 11. With demand curtailed, the amount of land and residences listed for sale grew. But the pendulum has swung. In Dec. 2001 there were 1,205 residences and 469 parcels of land for sale, according to statistics generated by local realty giant Slifer, Smith & Frampton from local property listings.Real estate-sales activity for 2004 set a record of more than $2 billion in property sold.
For buyers and sellers that means higher prices and for developers, it means more opportunity but at a price.Fixer-uppers inflated? Real estate prices countywide have jumped 16 percent in the last year, said Led Gardner of Sonnenalp Real Estate in Vail. Leading the pricing increase is Vail Village, where the average price per-sale has jumped 65 percent to $672,000, he said. In Beaver Creek the average price has jumped 52 percent to $536,000, he said.Were seeing big jumps in price, Gardner said. Its purely from a lack of inventory. If you find a property that meets all your criteria you need to buy it now because it might not be available in March.The demand/supply situation also is causing older properties, many of them fixer-uppers, to sell for a premium, Gardner said.A lot of secondary properties that might have languished in earlier markets are commanding prices that you might not expect, he said.But the heaviest activity is at the bottom of the market, in starter or entry-level homes priced at $500,000 and less. In 2001 there were 481 of the entry-level properties listed for sale, but by last December that number had decreased by 40 percent to 290. Real estate experts say lingering low interest rates have allowed more renters to purchase homes.In the next market segment, property priced from $500,000 to $1 million, the same thing happened. The number of properties listed went from 299 in 2001 to 149 in 2004, a 51 percent decrease.At the loftiest end of the economic spectrum, the number of luxury properties priced in excess of $5 million many of the second homes remained stable at 50 in 2001 and 2004, statistics show.Market makes U-turnThe sales boom is priming the pump for a development boom in Vail and Lionshead over the next six years, where more than $1 billion in property will be built and renovated as part of the so-called Vail Renaissance.It includes largely slopeside properties like Vails Front Door, a $75 million slopeside redevelopment where the mountain and Bridge Street meet. Renovations also are planned at The Crossroads Shopping Center and the old Vail Village Inn.Lionshead will also see significant construction. The old gondola building now home to Vail Resorts offices and a nightclub, among others will become a luxury hotel and commercial complex. There will also be development at the other end of Lionshead near the Marriott Mountain Resort.The renewed focus on Vail is a reversal of a decades-long trend that saw the heaviest building to west.For the last 25 years we saw most of the marketing and buyer interest go downvalley, Gardner said. Now the market has made a U-turn.In Avon a new development at the 18-acre confluence site along the Eagle River is being planned. Part of that is expected to be a chairlift or gondola that will connect Beaver Creek and Avon via a series now-operating lifts in Bachelor Gulch. A lift would likely boost surrounding properties values become it would become more convenient to get to the slopes on Beaver Creek Mountain, real estate professionals said.Up to 30 dwelling units per-acre can be built on the confluence, according to town of Avon officials.
Construction and real estate traditionally lead economies into and out of economic cycles.That being true, real estate sales indicate that Eagle Countys economic future is bright.Real estate sales continue to set records, and demand for resort property is pushing property prices upward.In 2004, total real estate sales hit nearly $2 billion, topping the previous record year of $1.7 billion set in 2000.That’s 30 percent better than last year’s $1.47 billion.As the fourth quarter began, that months total was 123 percent better than last October’s $162.7 million. October’s real estate sales topped $199.4 million, stretching the run of record sales to 15 consecutive months.The local real estate market is being fueled by money that might have gone to the stock market, as well as continued low interest rates.People now are not as bullish on the stock market because it hasn’t been performing and they’re putting more money into real estate,” said Jim Flaum of Slifer, Smith & Frampton Real Estate.Still going strongThe boom in real estate activity began in August 2003 after anxieties over the war in Iraq faded and the national economy began to emerge from a recession, real estate agents said. Sales have accelerated since then.Sales of top shelf resort properties continue to be strong. Topping the list of resort properties sold was a $5.3 million, 14,000 square-foot home in Beaver Creek, a $4.6 million home in East Vail and a $4.5 million condo in Beaver Creek.Sales of property priced at $1 million and more contributed more than half of last years sales totals.Sales of properties priced at $500,000 and less contributed 26 percent of the total and sales of properties priced from $500,000 to $1 million contributed 22 percent. The average sales price of residential property was $658,176 while the average sales prices of non-residential property was $318,414.Escalating prices?Bob West of the Robert Dean West Company of Beaver Creek said multiple offers on properties point to lower inventory and firmer prices.Led Gardner of Sonnenalp Real Estate said the build-out in Beaver Creek and elsewhere means supply is tightening.”We are experiencing strong price appreciation throughout Vail Village and Lionshead as inventory is minimal and demand continues to grow,” he said.West said he expects the Vail market to skyrocket once the redevelopment effort dubbed “Vail’s Renaissance” begins in earnest this year. That public/private redevelopment effort will create nearly $1 billion in new facilities in Vail Village, Lionshead and elsewhere. They will include redevelopment of Crossroads Shopping Center, Vail’s Front Door at the head of Bridge Street and redevelopment of the old gondola building in Lionshead.”Vail is ready to shoot to the moon with an incredible amount of good deals and redevelopment,” he said.Some real estate agents said they expect the boom to continue through the ski season and possibly longer.Vail Colorado, Real Estate
Increases in the amount of rental housing means an easier time finding a place to live, and slight easing in the areas Numbers from the Colorado Division of Housing show nearly one in five apartments in Eagle County 19.9 percent were vacant last fall. Thats a smidgen lower than the 20.4 percent reported last February.Its the third consecutive year of a glut of rental housing, and it isnt unique to Eagle County. The surplus extends to nearly every resort town in the state.Thats a departure from previous decades of historically tight housing markets that most resorts have experienced, the report states. But vacancy rates declined from 11.1 percent in September to to 8.9 percent last February.All of Colorados resort rental markets reported higher than the states 8.9 percent average, except Glenwood Springs, the report stated. Aspens vacancy rate remains high at 11.1 and Summit County showed a substantial increase from 7.4 last February to 14.5 in September.Compare that to the mid-1990s, when housing in Vail was so tight that one adventurous skier spent winter nights camped in his vehicle in the Vail parking garage.Source of the surplusIn Eagle County, a combination of factors is causing the surplus, rental professionals say. The slowdown of the booming construction industry here that peaked in 2000 reduced the demand for housing when construction workers left. At the same time, continued low interest rates have allowed renters to become owners. The entry-level housing market is hot right now, said Rick Bolduc of Bolduc Realty Management in Avon. Tenants are becoming owners.On top of that, several large affordable housing projects, like Avons 244-unit Buffalo Ridge, Two Rivers in Dotsero and the 146-unit Vail Commons and others, have opened in the last two years, adding to the supply.Several of the large projects have been promoted by municipalities like Vail and Avon that want to attract and keep more locals in town in the face of ever-escalating property prices driven by the second-home market.You can trace it back to 9/11, said Jerry Flynn, owner of Polarstar Properties, which oversees 350 rental units in Eagle County. Things slowed down in the valley when construction trades left the valley, coupled with people buying homes, and there was an increased supply of new units.Flynn thinks the states survey overestimates the vacancy rate and that the supply has tightened up a bit, he said.Surveys his company has conducted indicate the vacancy is somewhat lower, at perhaps 15 percent, Flynn said. The vacancy rates at the 294-unit Eaglebend apartments in Avon, the largest rental complex in the valley, is at 4 percent and at the 50-unit Kayak Crossing in Eagle-Vail, its 8 percent, he said. Its not any worse than last year, he said.The glut of housing affected more than just rents and supply. It also changed the housing plans Vail Resorts had for 40 acres between Avon and Singletree that had been part of a large U.S. Forest Service land exchange.The company last summer declined to pursue the land exchange because the need for housing decreased, a former company official said.And Buffalo Ridge made headlines earlier in the fall when it received a $200,000 grant from a county housing board because it had had difficulty paying construction loans and leasing units. The property is now nearly fully leased, according to officials.What about rental rates?Rental prices are prisoner to the same economic forces of supply and demand that other commodities are. Its a great time to be a consumer, Bolduc said. Its the basic supply/demand thing. Were overbuilt and running with a greater number of vacancies than weve had before. Bolduc attributes the surplus of housing to the entry of governmment-supported housing projects over the last few years.The pendulum has swung a little further than in the past because of the role governments have decided to take locally, he said. Absorbing the excess units will take at least two years.Two years ago, he said he was unable to rent one property during the ski season.Thats the first time thats ever happened, he said.State Demographer Jim Westcott said continued strong second-home sales will drive the job market in resort towns. That, in turn, will create more jobs and more demand for housing that will absorb excess housing units.The state survey says rents have increased, but local property managers say thats not entirely accurate.Prices have stabilized and perhaps dropped, Bolduc said, adding that for the last three years prices per bedroom have hovered in the $550 to $650 range.Vail Colorado, Real Estate
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