Ask a Realtor: Is the Vail real estate market cooling?
Ask a Realtor
Dear Joan: I am always looking at the real estate market to judge when I should invest more or bail out before there is a big price drop. I have been feeling really good about the strength of the market until the last couple of months. Are we seeing a cooling now of what I have considered a hot market? It seems properties remain on the market longer, from the ads in the paper, and it seems like there are not as many new listings showing up.
Also, from the few statistics I see, it seems like the high-dollar volume of sales is only because some hotels or a very few super expensive homes have sold, skewing the data. I would very much like to have your professional opinion of what is happening now, to see if I am imagining things or if there really is a shift a foot. Thanks.
Dear Market Watcher: Although I don’t necessarily agree with your terminology and exact conclusions, you are not imagining things. There is talk of “shifts,” “adjustments” and “corrections” in the real estate business world. Here is my interpretation.
First of all, when the market is good, as it has been, sellers will enter the market with higher and higher prices. Eventually, sellers price themselves out of what is considered reasonable market value, and then the sales appear to slow down because the free market will not pay what is considered above “market value.”
So, in this case, the market did not really slow down, as sales at “market value” are still continuing, as long as there is “reasonably priced” inventory. This, in turn, makes it appear that properties are staying on the market longer — because they are. They are not selling when they are too aggressively priced and therefore are out of line with the sales in the area for similar properties. This produces the syndrome where you are seeing the properties just sit until there is a price reduction or the listing expires and goes off the market.
As far as new inventory goes, there is new inventory all the time, but not as much as what appears spring and early summer. As far as a few large sales skewing the market, that is always the case in our luxury market — and we like it that way. In my opinion, the only thing the large sales skew is the average sales price, but using the median sales price instead of average sales price easily rectifies that.
In summary, I would say we are having a bit of a minor correction, which I consider a good thing, instead of spiraling up until the only option is a huge, painful drop. All is well in the real estate market, in my view.
Joan Harned is an owner and broker for Keller Williams Mountain Properties and heads up Team Black Bear, her own real estate team. Harned has been selling real estate in Eagle County for 27 years. Contact Harned with your real estate questions at firstname.lastname@example.org, 970-337-7777 or http://www.skiandteehomes.com.