Real estate market ‘balanced’; sales in 2016 about even with 2015 levels
By the numbers:
308: 2016 real estate sales in Eagle, most in the county.
74 percent: Properties that sold for $1 million or less.
$121 million: Largest single 2016 sale (the Four Seasons in Vail).
157: New residential sales.
EAGLE COUNTY — The local real estate market finished 2016 on a strong note, but fractionally off marks were set in 2015.
According to year-end data from Land Title Guarantee Co., there were 2,048 sales in 2016, a 1 percent decline from the previous year. Those sales added up to a total volume of just less than $1.957 billion, also a 1 percent decline from 2016. The county’s real estate sales haven’t exceeded $2 billion in a year since 2008.
Other market trends have remained stable over the past two years. Inventory remains fairly low, especially at prices of $1 million and less, and most buyers are already local residents. Still, there’s a roughly six-month supply of homes priced at less than $1 million on the market, a sign of a balanced market.
Big sales, big volume
Just how much of the valley’s dollar volume comes from big sales is apparent in the January sales numbers from the Vail Board of Realtors.
Onie Bolduc, a member of that group’s board of directors, had several spreadsheets open during a phone interview. One of the most telling slides included single-family home sales last month.
There were 34 single-family home sales in January. The three most expensive homes accounted for 54 percent of the month’s sales volume.
Taking out those three sales — all of which were for more than $10 million each — the average price of the remaining 31 homes falls from $2.67 million to $1.35 million.
Conversely, single-family home sales of less than $1 million accounted for 58 percent of all transactions, and 12 percent of the sales volume.
“I love seeing the health in that part of the market,” Bolduc said. “High end transactions are so essential for the success of the entire valley.”
With that said, sales of homes priced at $5 million or more in 2016 declined about one-third from 2015 levels.
Given the relatively small number of sales at that level, that decline could simply be normal fluctuations in the market and the timing of sales. The most expensive home sold in Vail — $23 million, which closed in January — was on the market for nearly two years before it closed.
Bounce back from odd year
There were other factors in 2016, especially through the first part of the year.
The nation’s stock markets took a beating in the first two months of 2016. Then there was the uncertainty of the presidential election.
Once a winner was declared, though, the high-end market saw a bit of a bounce, Bolduc said.
Big-dollar transactions were also affected by the strength of the U.S. dollar, Bolduc said. While sales to international buyers make up 1 percent of all transactions, those buyers are often shopping at the top of the market, he added.
Buyers from Mexico were particularly hard-hit by exchange rates, Bolduc said. As recently as 2014, 12 pesos would buy one dollar. At one point in 2016, it took 21 pesos to buy a dollar, although that rate has gone down to 17:1 now.
Still, visitors are coming.
“In December, we still saw a lot of international folks traveling and buying things,” Bolduc said. “But they weren’t buying art, jewelry or real estate.”
Away from the expensive, slopeside real estate, parts of the market are moving ahead.
Chad Cremonese is the listing broker at Fortius Real Estate. That company is building and selling homes at Two Rivers Village in Dotsero and at Aspen Ridge in Gypsum, near the Buckhorn Valley neighborhood.
That company is positioned to build and sell as many as 50 new homes this year — 20 at Aspen Ridge and 30 at Two Rivers. Cremonese said his firm is finding “a lot of interest, but not a lot of inventory.”
The supply of new homes has been hampered by both the lingering effects of the 2009 real estate crash and the ever-increasing prices of construction. Those rates have risen at roughly 10 percent per year since about 2013.
Building new homes “scares me a little bit,” Cremonese said. Still, there were more than 150 new homes sold in 2016.
Then there’s the gradual increase in interest rates. While rates are still low — just less than 4 percent for some 30-year, fixed rate mortgages — even a slight bump in rates can make potential buyers jumpy.
“There’s good opportunity for buyers, and construction costs aren’t going to get any cheaper,” Cremonese said. “Buyers can usually overcome those fears.”