Million-dollar slowdown hits the Vail Valley
Vail, CO, Colorado
GYPSUM ” Mike Budd believes in playing offense, and he’s playing with golf carts, cars and vacation packages.
Budd is the managing broker for the Brightwater project south of Gypsum. The high-end golf course/home project on what used to be the Albertson Ranch up Gypsum Creek has been on again and off again for years. The project just this week cleared its final hurdle with town officials, which allows people to actually occupy homes there. The front nine holes of the golf course are being played now, and the back nine will be ready by September.
Brightwater may be ready, but the market may not. Sales, and dollar volume, are both off this year from last, and sales are way off 2005, the high-water year so far for local real estate.
Throw in a sour national economy, and the immediate outlook isn’t great.
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“The high end of the market has been good, but it’s not as good as it was,” Joan Harned said. Harned, a broker with Keller Williams Real Estate in Eagle, has been selling property in the Vail Valley for years.
She tells people that the great market of 2005 to about July of last year has skewed perceptions of how the local real estate market usually behaves.
Rod Slifer, who’s been selling real estate in Vail since the 1960s, agreed.
“People think things here are worse than they are,” Slifer said. “Transactions have gone down for a number of years now, and our year-to-date dollar volume is down about 25 percent.”
But, Slifer said, things are worse in Routt and Pitkin counties, where both sales and dollar volume are off by 45 percent or more.
And, while this year’s numbers from April aren’t great, Budd said he expects the May numbers to “show a huge decline.”
On the other hand, Budd said “only” $150 million in sales would still put this May in the top four or five similar periods in the valley’s history.
“If you go back 10 or 15 years, 2,600 or 2,700 transactions a year would be a good baseline,” Budd said. “We’ll be a little below that baseline this year.”
And, he said, the valley is still on pace to rack up about $2.5 billion in sales this year.
“Throw out the 2005 – 2007 period and we’d be ecstatic for a $2.5 billion year,” he said.
In fact, through the first four months of the year, the valley’s on track to record about 2,000 sales for 2008. But, Slifer said, summer and early fall are traditionally strong months for sales.
But the local market is slow. That’s why Budd’s doing what he can to rev up interest in Brightwater.
“We’re not going to sit back and wring our hands,” he said.
A couple of months ago Brightwater decided to sweeten its real estate with wheels ” a three-year lease on a Porsche Cayenne SUV with every lot sold.
Budd acknowledged that the offer didn’t generate a lot of sales. But it did generate buzz, which is why Brightwater’s going to revive the offer, this time with a choice of a Porsche or a similar SUV from Audi.
Another promotion will put a golf cart in the garage of new home buyers. Other incentives include credits for architectural fees.
Brightwater’s also offering an “experience” that includes either credits for travel costs or Vail Resorts Epic ski passes.
“We’re trying to create some excitement,” Budd said.
But people who buy homes for the kind of money Brightwater charges ” $1 million and up ” generally aren’t pushed into a purchase with a car or other
pot-sweeteners, especially when nationwide confidence in the economy isn’t great.
But, Budd said, those are the kinds of incentives people remember when they’re ready to buy.
“But maybe (incentives) will get a client to take a tour, and experience what we have here,” Budd said. “That’ll drive their decisions.”
Even while scrapping through a down cycle, brokers are eternal optimists, and see better days ahead.
Harned said a recent survey on Realtytimes.com indicates that about 40 percent of the nation’s wealthy people plan to buy real estate this year, and nearly 90 percent of those who took the survey believe the national real estate market is ready for a rebound.
Slifer said sales always pick up from July through October.
“Until we get through those months, I’m not going to gloom and doom,” he said.
But, Slifer said, Brightwater may still be a little ahead of its time.
“When that happens, you just have to wait it out,” he said.
Business Editor Scott N. Miller can be reached at 748-2930, or firstname.lastname@example.org.