Vail Valley brokers: Prices have to drop to spur market
Vail, CO, Colorado
VAIL, Colorado “-John Slevin says there are more people looking at Vail Valley real estate now than there were in December of last year. That’s the good news.
The bad news is that there aren’t many deals being made at the moment, and probably won’t be for a while.
Despite mortgage rates that would have had home buyers in the 1950s doing handstands, the difficulty of getting credit, combined with record-low consumer confidence numbers, has finally shown up in local real estate sales.
Just 46 transactions closed in January, for a total of just under $40.5 million. It was the local real estate market’s worst month since March of 1996, the last time less than $50 million in real estate changed hands.
Slevin, the owner of Prudential Colorado Properties and a 33-year veteran of the local real estate business, said he and his brokers are seeing a little more action, but that doesn’t mean we’re anywhere close to the roaring market of 2005 through 2007.
“The second-home business is a luxury business,” Slevin said. “People are quicker to drop buying a second home now the same way they’re dropping the purchase of another car.”
While no one can predict when consumers will start to open their wallets again, Slevin said it’s going to take lower prices to attract buyers across the market.
“It’s a very price-sensitive market right now,” Slevin said, “We’ve had a tremendous run-up over the last few years, and we’ll have to see a pullback in prices to get people buying.”
Slevin said depending on location, he’s seen price reductions of between 10 and 40 percent in asking prices.
Tony Bartell owns Field of Streams Real Estate, a company that specializes in property in Bachelor Gulch and Beaver Creek. He’s seeing a lot of the same things Slevin is.
“There’s a tremendous amount of money on the sidelines right now,” Bartell said. And, he added, while prices have already come back 10 to 15 percent from last year, that might not be enough to convince buyers they can make a deal.
“But a realistic seller and buyer can come to terms,” Bartell said.
“Realistic” is the key word. Bartell said people who have had their homes for a while need to accept that they just aren’t going to get the prices their homes might have commanded just a year ago.
“Any seller can’t expect multiple offers close to full price,” he said.
But, Bartell said, he hasn’t seen a rush to get out of the local real estate market, either, especially by people who have had their homes for a while.
And it’s those people who are in the best shape now, Slevin said.
“If you bought your place in the last two or three years, you should be stay put, or be prepared to take a loss,” Slevin said.
With the dramatic slowdown in business, Slevin also said it’s almost inevitable that the ranks of local brokers will thin over the coming months.
“We’ve already seen it in Aspen,” Slevin said. “We’ve already seen a consolidation of companies, and we’ll probably see that continue.”
Business Editor Scott N. Miller can be reached at 748-2930, or email@example.com.
$40.48 million ” January real estate sales in Eagle County
$225 million ” December 2008 real estate sales
$48 million ” March 1996 real estate sales ” the last time the number dropped under $50 million in a month.