Vail Valley real estate market continues strong; transactions, values are up
June 2, 2018
EAGLE COUNTY — As the Vail Valley worked through a low-snow winter, people in the real estate business did a lot of head scratching. Would the lack of snow hurt sales?
The answer, it seems, is "no."
The Eagle County real estate market posted another strong month in April, with an increase in transactions from the same period in 2017. The value of those sales declined significantly — 38 percent — but there's one big reason for that drop: the sale of the Park Hyatt Beaver Creek in that month.
According to information provided by Land Title Guarantee Company, once that large sale is taken out of the mix, sales volume actually increased 11 percent from April of 2017.
For the year to date, sales volume is up 11 percent.
Strong, steady market
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Dan Fitchett, manager of Liv Sotheby's International Realty's four Vail Valley offices, said the numbers so far this year reflect a strong, steady market.
"People continue to have confidence in this market," Fitchett said.
People are buying homes — whether for primary or secondary use — to use and enjoy them, Fitchett said.
As opposed to the high-end market of 2005 through 2007, when buyers were turning units quickly, the current market for homes of $1 million or more is "in good hands," Fitchett said.
Given the market's strength, inventory remains low. That's driving appreciation throughout the market, but there are some potential brakes.
Interest rates, while still historically low, have been creeping up. Onie Bolduc, a broker with Berkshire Hathaway HomeServices Colorado Properties, said those increases are keeping some buyers out of the market, particularly in the under-$300,000 range.
Those rates affect buying power, Bolduc said.
Still, Bolduc said, interest rates now remain "monumentally low."
Bolduc said that the average rate over the history of the 30-year mortgage — about 40 years — is 7.5 percent. According to BankRate.com, the national average for a 30-year, fixed-rate mortgage remains lower than 4.5 percent.
Bolduc also said there's been a slowdown in the lower end of the market. In the under $300,000 market, transactions in April were off 50 percent from the same period last year, Bolduc said.
But, he added, much of that slowdown can be attributed to lack of inventory.
But after years of largely stagnant construction, developers are more active than they've been in some time.
John Pfeiffer, managing broker of Slifer Smith & Frampton Real Estate, said that firm is representing the Mountain Gateway in Gypsum. Those two-bedroom homes start in the high $200,000 range. Pfeiffer said his firm recently signed 11 sales contracts in a month for those homes.
In Eagle, Rick Beveridge is developing Eagle Landing at Brush Creek, a townhome project with 13 homes in its first phase. Three of those homes are under contract now.
Beveridge said there's been "a lot of interest" in that project. But, he added, those homes are priced a bit higher than the Mountain Gateway homes.
Beveridge said in the past few months the entry-level end of the market has slowed somewhat. But he remains confident.
"Interest rates have hung in there," Beveridge said. "A lot of people are on vacations right now. A number of buyers are out there. It's just a matter of time."
Demand is also fueling new work in that part of the market.
It can take some time to sell homes in the market's upper reaches. There aren't many of those homes, and finding the right buyer can require some patience.
Still, Pfeiffer said, there's been "a steady move" in the upper end of the market in the past six months. And, he added, he expects some "substantial transactions" — some in record-breaking territory — to close in the coming weeks and months.
Throughout the market, buyers seem to prefer new to used. Fitchett said that's true whether buyers are looking at a new, or newly-renovated, property.
Buyers want homes with contemporary amenities, Fitchett said, from appliances to internet connectivity.
As spring turns to summer, brokers say they're confident in the market's progress — barring an unforeseen national or international crisis, of course.
Those factors — and the general attractiveness of the Vail Valley — should continue to keep buyers buying.
"People are seeing (the valley) as a good place to buy a second or third home," Fitchett said. "But we will continue to struggle with inventory."
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930 or firstname.lastname@example.org