Vail Valley brokers say more real estate inventory is needed
EAGLE COUNTY — The local real estate market was essentially flat from 2017 to 2018. That’s the sign of a strong market. But local brokers say the valley could use more homes to buy and sell.
According to the Colorado Association of Realtors, the state in 2018 saw a slight decline in the number of homes sold. Eagle County saw that slight decline, too. But according to data from the Vail Board of Realtors, which tracks data mostly from Vail to Dotsero, there was also an increase in the prices of those transactions.
Together, the changes added up to a market that was very similar to the market’s status in 2017.
That’s mostly good news. According to Mike Budd, a broker with Berkshire Hathaway HomeServices Colorado Properties, the supply of homes is one of the key indicators of a market’s health, and whether it favors buyers or sellers.
For single-family and duplex units, the Vail Board of Realtors reports a 7.4-month supply of homes. There’s a six-month supply of townhomes and condos. Budd said that a six-month supply of homes is generally regarded as the sign of a balanced market.
The caveat to that is where homes are in the market spectrum between starter units and luxury property.
Dan Fitchett, the vice president and managing broker of the local branch of LIV Sotheby’s International Realty, said homes in the under-$1 million end of the market move quickly if they’re priced right. Fitchett said in the last year, several homes went under contract before brokers could get a full set of photos on their company websites.
Fitchett noted that one of the biggest shifts in last year’s real estate market was the price point in which the bulk of the valley’s sales were made.
The bulk of the valley’s sales for years came in the segment priced at $500,000 and lower. Last year, the segment between $500,000 and $1 million accounted for the bulk of local sales.
“There wasn’t the product to meet the potential demand” at the lower price point, Fitchett said.
Michael Slevin, owner and president of Berkshire Hathaway HomeServices in the valley, said the lack of starter-home inventory can reverberate through other levels of the market.
“If first-time buyers can’t get in, they can’t sell and get into another unit,” Slevin said.
As homes get more expensive, the time on the market tends to increase. That’s particularly true of older homes that haven’t been updated, Fitchett said.
The market for homes priced at $3 million and above is quite strong, Fitchett said. In fact, that market saw a 38 percent increase in sales volume and a 24 percent increase in transactions.
Budd said the market for homes priced at $5 million or more was “extraordinarily strong” in 2018, surpassing even the days of the previous decade’s real estate boom.
But as home prices rise, the time those units are on the market tends to rise. Budd said very expensive homes can spend two or three years waiting for buyers.
New moves faster
Fitchett said buyers at that end of the market tend to prefer either new construction or newly-renovated property.
A home that’s 20 or 25 years old may be perfectly fine, he said. But it won’t have the latest finishes, appliances and other touches. Only a few buyers are willing to take on renovation projects.
If those older homes aren’t priced accordingly, they tend to linger on the market.
“Prices have to reflect what it would take to bring (a home) up to today’s (standards),” Slevin said.
While there’s been a good deal of new construction across all price points in the past few years, those new units haven’t much affected the valley’s overall inventory.
Slevin said more units are set to come on the market in the summer of this year. More is on the way, but, Budd said, don’t expect much at the lower end of the market until 2020.
Until that happens, “We’d sure like to see more (inventory) in the under-$1 million market,” he said.