Vail Valley real estate dip tracked to decline in sales of $5 million or more
Lack of inventory hampering activity across all price points
- $580 million: Eagle County real estate sales volume through April 30.
- $664 million: Sales volume for the same period in 2018.
- 506: Eagle County real estate transactions through April 30.
- 619: Transactions for the same period in 2018.
The Vail Valley’s real estate market has long been an unusual one, with very expensive sales accounting for a large share of the market’s dollar volume. That means a few sales can have a large impact on volume.
That seems to be happening this year.
Land Title Guarantee Co. tracks real estate transactions recorded at the Eagle County Clerk & Recorder’s Office. So far this year, dollar volume and transactions trail numbers for the same period posted in 2017 and 2018.
Transactions this year are 82% of the 2018 figures, while dollar volume is 87% of 2018’s numbers.
It seems there are a few things at work in the decline.
Markets are cyclical
First is the cyclical nature of all markets.
Mike Budd, a broker in the Edwards office of Berkshire Hathaway HomeServices Mountain Properties, said the upper level of the market — $5 million and above — is unpredictable and can vary widely from year to year.
Budd said there were 55 sales in that range in 2018. That would have been between 18 and 19 sales through the first third of 2018. Through the end of April of this year — the first third of the year — there have been 15 such sales.
In both cases, though, sales of $5 million and more made up roughly 3.5% of transactions and accounted for roughly 25% of the sales volume.
Still, fewer big sales mean lower volume.
The other factor is inventory.
Slifer Smith & Frampton Real Estate managing broker John Pfeiffer said his brokers are telling him they have willing buyers but little to buy across the price spectrum, adding that the firm has a handful of high-end sales set to close in the next several weeks.
Pfeiffer said he recently held a meeting with Slifer Smith & Frampton’s brokers. Virtually all are talking about the lack of inventory, he said. Pfeiffer added that he sees a steady stream of emails from brokers who say they have willing buyers but nothing to sell. The biggest challenge is with homes priced at $1.5 million and less, he added.
Budd said that inventory in the western part of the valley is “really tight,” with a bit more supply from Edwards east.
Budd noted that in 2018 the local market switched from being dominated by sales of $500,000 and less to sales between $500,000 and $1 million. That’s due to both inventory and price increases, he said, with buyers who had been in the $500,000-and-less range looking at homes priced around $600,000.
Price increases have played a significant role, Pfeiffer said, noting that the least expensive single-family home in Eagle is priced at $485,000, a price that doesn’t include a garage.
Still, both Budd and Pfeiffer called the current market “stable.” Budd said that outside the market’s upper reaches, the rest of the market is “relatively predictable.”
Despite this year’s dip, Pfeiffer said current indicators point to continued stability.
Pfeiffer said the state-level experts he’s talked to remain “bullish” on Colorado’s economy. Pfeiffer added that bankers and lenders he talks to aren’t concerned about the state’s economy at the moment.
“Inventory is our main story,” Pfeiffer said. “We have the clients. … It’s an incredible time to list a property for sale, and it’s an incredible time to buy.” Pfeiffer said that is due to a combination of a strong economy and continued low mortgage interest rates. That combination doesn’t happen very often, he said.
And while the local market has had a good run-up the past few years, annual increases aren’t guaranteed.
“That’s part of a healthy market,” he said.
Vail Daily Business Editor Scott Miller can be reached at email@example.com and 970-748-2930.
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