Vail Valley real estate listings decline, but sales are strong
By the numbers
22.1 percent: One-year decline of all active property listings in the Eagle County Multiple Listing Service.
3.1 percent: One-year increase in the median sales price of all property in Eagle County
153: Closed March sales in Eagle County.
Sources: Vail Board of Realtors, Land Title Guarantee Company.
EAGLE COUNTY — Supply and demand is a dance. Right now, demand is leading.
The latest data from both the Vail Board of Realtors and Land Title Guarantee Co. show a strong market.
March, the most recent month for Land Title’s data — compiled from Eagle County records — showed 153 sales. March’s dollar volume — the value of those sales — exceeded $172 million. Both of those figures are increases from March 2016.
Prices are also increasing in many areas of the Vail Valley. Vail Board of Realtors’ data show the median home price in the county has increased by more than three percent since April 2016.
The concern is declining inventory. New listings for townhomes and condominiums in the Vail Valley fell nearly 28 percent in April from the same period in 2016.
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There’s also a decline in the supply of homes — the number of homes in the Multiple Listing Service divided sales in the previous month or year. In April, there was a seven-month supply of condos and townhomes, a 26 percent decline from April 2016.
Year’s sales are up
Even with the decline in supply, Onie Bolduc, past chair of the Vail Board of Realtors Board of Directors, is still bullish on the market.
“We’re up eight percent this year, and we haven’t hit the peak of new inventory,” Bolduc said, adding that more homes tend to come on the market in June and July.
But, Bolduc said, supply is a concern, especially since there hasn’t been much construction since the collapse of the local real estate market nearly a decade ago.
“The new product demand is high, but we haven’t built,” Bolduc said.
Part of the demand can be seen in the interest in new, deed-restricted townhomes at the Chamonix neighborhood in West Vail.
“Those units aren’t cheap,” Bolduc said. “That shows the value add of new construction.”
With strong demand — especially for units priced at $600,000 or less — prices have been rising, particularly in the past year. Values in almost all of the valley are now back to roughly their 2007 levels.
We all know what happened after 2007, when values collapsed by 30 percent or more in some neighborhoods. Those values dropped due to a bubble. Is that bubble re-inflating?
Avon-based mortgage broker Chris Neuswanger said the market fundamentals are different today than they were a decade ago.
Lending standards are much tighter today, Neuswanger said. And, he added, there isn’t the buying frenzy that drove prices between 2005 and 2007.
Different buyers today
“When we sold a house in Singletree in 2006, it sold in about a week, without listing it,” Neuswanger said, adding that open houses would typically draw 50 or 60 people on a Saturday with nothing more than a neighborhood sign.
Many of those potential buyers were able to secure no-money-down mortgages with little more than a signature, Neuswanger said.
Today, stiffer lending standards put in place after the crash of 2008 and 2009 haven’t really loosened.
That’s resulted in buyers with more financial stability, Neuswanger said.
William DesPortes, of Central Rockies Mortgage in Avon, said both buyers and lenders seem more accustomed to the new standards.
“It can be an arduous process to finance a home,” DesPortes said. “It’s a highly documented process.”
That said, DesPortes said even self-employed buyers are finding mortgages at favorable rates and, sometimes, very low down payments.
To make that happen, mortgage brokers need to know how to communicate to borrowers what they’re going to need to get qualified.
Mortgage brokers are now licensed and required to take continuing education courses. DesPortes said that’s helped both lenders and buyers.
No one has a fully functioning crystal ball, but both Neuswanger and DesPortes believe the changes in the market’s fundamentals mean that even with increasing values, the local market isn’t an inflating bubble — at least not now.
“We’re not seeing leaps and bounds (of price increases),” Neuswanger said. “People aren’t into flipping, either. It’s steady growth, but people aren’t making $100,000 in a year.”