Vail Valley real estate market is near boom-time levels, but with a difference
By the numbers
1,000: Eagle County real estate transactions through June 30, 2018.
2,150: Transactions in all of 2017.
$1.07 billion: Value of 2018 real estate sales through June 30.
$2.2 billion: Value of all 2017 transactions.
Source: Land Title Guarantee Co.
EAGLE COUNTY — The local real estate market in 2017 topped $2 billion for the first time since the go-go years of 2005 to 2008. The market is on pace to top $2 billion again this year. But this market is different than the market of a decade ago.
Led Gardner, the lead broker at Slifer Smith & Frampton Real Estate’s Bridge Street office in Vail, noted that in the boom years, people literally lined up for new projects.
The then-new Arrabelle at Vail Square held a lottery for buyers.
“There were four buyers for every unit,” Gardner recalled. The same thing happened at Beaver Creek Landing during the same period.
“What an interesting way to sell multi-million-dollar real estate,” Gardner said.
Many of those buyers also lost money when the market turned. People who were building “spec” homes — homes built without a specific buyer participating — also were hit hard in the downturn.
“A lot of guys were getting into spec home development who shouldn’t have been,” Gardner said.
Back then, buyers of those and other new units often didn’t spend much time there. In fact, Gardner said, many of those units were flipped — for a sizable profit — within just a couple of years.
That was then …
Today’s market is different, Gardner said. Flipping has given way to visions of long-term use of vacation homes.
Tye Stockton, of LIV Sotheby’s International Realty, said buyers 10 or 12 years ago generally didn’t spend nearly as much time in the Vail Valley as they do today.
“Back then, they were only going to use (vacation homes) for three or four weeks in the winter, and maybe a week in the summer,” Stockton said. “For people buying now, the use is legitimately three seasons.”
Now, when buyers are justifying a large purchase, they’re able to see using vacation homes for between four and eight months per year, Stockton said. That helps people become more comfortable with a purchase.
Gardner noted that people buying today are often current owners in the Vail Valley. New purchases are a kind of stamp of approval on the security of this market, he said. The number of buyers who already own property in the valley also shows how much the area means to families.
The market has always been different in the western part of the valley, but longtime broker Rick Beveridge, of Vail Valley Real Estate, said he’s seen the changes there, too.
Beveridge said the lower valley in the past dozen years has “come into its own in terms of amenities Eagle and Gypsum have to offer.”
Cause for concern?
While the national and local economies have been strong in the past 18 to 24 months, Beveridge said seeing prices rising does make him a little nervous.
Western valley prices have been rising almost as quickly as they did between 2005 and 2008, Beveridge said. And, he added, those prices are affecting people’s ability to buy.
“I have (clients) looking in Eagle Ranch in the $650,000 range, and we can’t find anything,” he said.
There’s also been a worrisome run-up in prices of starter homes. Property that was selling between $250,000 and $350,000 a decade ago is now more than $400,000, Beveridge said.
“That limits a lot of people,” he said. And, he added, he hasn’t seen wage increases commensurate with the increase in home prices. There’s also a distinct shortage of fix-up property on the market, he added.
That said, the market overall is doing well right now, Beveridge said.
“The stock market’s doing great — people have the funds to buy real estate,” he said.
And the Vail Valley isn’t alone in terms of mountain market strength.
As a member of LIV Sotheby’s network, Stockton said he talks often with brokers in other mountain markets from Steamboat Springs to Telluride.
“They’re all seeing similar stories,” he said.
Vail Daily Business Editor Scott Miller can be reached at firstname.lastname@example.org or 970-748-2930.