Surviving Vail’s real estate slowdown
Vail, CO, Colorado
EAGLE COUNTY ” People who sell real estate are optimists by nature. They have to be. But optimism won’t pay the bills when the market slows to a crawl.
Over the last year or so, the price of local homes has dropped only a little, if it’s dropped at all. But the most recent figures available show the pace of sales has slowed more than 40 percent from the same period just a year ago.
That means local brokers can go a long time between closings ” which means it can be a long time between commission checks. A few local brokers talked about how they get by during the slow times.
Ron Denning got his real estate license and started with the Prudential Gore Range real estate office in Eagle about a year ago. He just closed his first deal earlier this month. Like most agents, Denning is an independent contractor who works under the Prudential Gore Range umbrella, and is paid only when he sells property.
To get by, Denning has kept his jewelry-making business active from his Eagle home. But even that business has its rough spots right now.
“It’s hard, with gold over $900 an ounce right now,” he said. “It used to be I’d have to spend $500 to make $1,000. Now I have to spend $1,000 to make $500.”
But the other jobs in the Denning home keep the bills paid.
Laddie Clark of Alpine Resort Real Estate has been in the Vail Valley real estate business since 1991. Over the years, he’s learned not to depend on his commissions.
“I manage some rental properties, do some property management and have some other business interests,” Clark said. “Commissions are just the icing on the cake.”
Clark said he knows some brokers try to live from commission check to commission check. And, he said, those folks are hurting.
Barbara Meese of Beveridge Real Estate in Eagle has cut back on some household expenses over the last several months. Her home is also on the market. She’d planned to flip the home, but the for sale sign has gone out a little earlier than she’d planned.
“It is nerve-wracking,” she said.
But it’s also something she’s gone through before in other places. Meese sold real estate in and around Denver before moving to Eagle in 2001.
“Real estate is a cycle,” Meese said. “It’s always going to be. But if you’re selling real estate in Colorado, I still believe this is the place to be.”
That belief, honed by the experience of buying low in 1987 and selling high a few years later, led Denning into the business, too.
But a market slowdown is always going to push some people out of the business. ‘
“There’s always a house-cleaning,” Meese said. “Some of the Realtors who are halfway in won’t make it. But that’s healthy.”
To get through the slow times, Cynthia Kruse is a firm believer in business plans and budgets.
Kruse is a broker for the local Re/Max agency. She’s also the President of the Vail Board of Realtors. Like virtually everyone in the business, she looks for the sunny side, but still has a strategy.
She learned the value of budgeting in her first career in corporate sales. “It tells you what you’re going to need in the next year,” she said.
A business plan to go along with a budget can also help a broker plan ahead on areas where it’s wise to cut back and where it’s smart to spend more.
During slow times, Kruse is also a big believer in getting back to basics.
“You need to keep in touch with clients and provide excellent service,” Kruse said.
Brokers also start working together, and working harder for clients. Kruse said she’s seen buyers and sellers more willing to engage in more give and take than they used to in order to get deals done. Buyers and sellers might have to adjust a closing date, or sellers might have to be willing to pay a town’s real estate transfer fee to get a sale finished.
The sunny side
Even with a slowdown in the market, the agents interviewed for this story are still bullish on the Vail Valley.
“I think we’re starting to see the trends pick up,” Kruse said. “Prices haven’t been affected much, but houses are staying on the market longer. But we’re not seeing the scary stuff we’re seeing in other areas.”
Besides, she said, the local market was so furious for several years that a slowdown was inevitable.
But in this market, property values go up. It might take some time, but they go up.
Denning, originally from the Midwest, said he would never have seen the appreciation he’s seen in the Vail Valley if he’d stayed in his home town.
“It’s worth the wait for it to pick back up,” he said.
In Eagle, Meese said her business is starting to pick up. She’s been showing one home she has listed nearly every day, a good sign.
“There is activity in the market,” she said. “I expect to have a couple of properties under contract in the next couple of weeks.”
It might even be getting easier ” but just a little ” to get a mortgage as the nation’s credit meltdown settles.
“There are loan products out there,” Kruse said. Fannie Mae, the nation’s biggest mortgage backer, this year increased the top amount for a “conforming” mortgage at least until Dec. 31, making it easier for people in this market to buy.
But the days of the “no documentation” loans that drove the subprime mortgage market in so much of the country are probably gone forever.
“I think that’s a positive adjustment,” Kruse said. “It’s really a great time for buyers.”
Business Editor Scott N. Miller can be reached at 748-2930, or email@example.com.
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