Recession won’t make Vail Valley homes affordable
VAIL VALLEY, Colorado ” The recession isn’t going to make homes in Colorado’s Vail Valley much more affordable to homebuyers, according to a new report by the Economic Council of Eagle County.
Home prices in Eagle County would have to drop at least 40 percent to make a medium priced Vail Valley house affordable for many locals. The Economic Council studied the idea of whether a recession-related drop in home prices would help locals find housing deals.
The council decided to conduct the study because the County’s real estate market has slowed. January real estate transactions ” in dollar amounts ” was down 67 percent from the previous year. Forty-six six properties sold in the county in January, a 56 percent drop from a year ago.
A 25 percent drop in the average home price was the assumption the council used for its study. That drop in home prices would not have a big effect on the county’s affordable housing problem.
“Even in a very harsh recession we do not expect home prices to deflate to the level that our middle income workforce can afford,” said Don Cohen, executive director of the Economic Council.
The drop in home prices would have to be closer to 40 percent or 50 percent in order to make houses more affordable, according to the report.
“Down-payment assistance programs, historically low interest rates and the federal governments $8,000 homebuyer tax credit all will help close the gap for some families,” Cohen said. “However, for the inventory of affordable homes to increase significantly it would take a devaluation of 40 to 50 percent of home prices under $750,000 to occur and no one, from our bank presidents, real estate professionals, employers and elected officials believes that will be the case.”