Vail Valley real estate market may be returning to more ‘normal’ dynamics
Transactions are down, but values still inching up
- 38%: Decline in first quarter dollar volume compared to the same period in 2022
- 43%: Decline in first quarter transactions compared to the same period in 2022.
- 26: March sales of homes priced at $1 million or less.
- 26: March sales of homes priced at $3 million or more. Source: Land Title Guarantee Company
After more than two years of sometimes-frenzied activity, the Eagle County real estate market seems to be settling down.
According to data from Land Title Guarantee Co., both transactions and dollar volume — the value of those transactions — saw marked declines from the same period. But home values don’t seem to be affected by the decline in the number of sales.
Travis Cox, the team leader for Keller Williams Mountain Properties, said the fact that the decline in dollar volume is a bit less than the drop in transactions indicates that prices are still rising — although not at the rates seen the past couple of years.
Unit sales are down “not because there aren’t people who want to buy, but because sellers don’t want to sell,” Cox said.
Inventory is particularly scarce in the lower-priced end of the market.
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A not-so-fun fact
According to the latest Land Title data, March saw as many sales of $3 million and more — 26 — as sales of $1 million and less.
In the valley’s residential areas, people who are selling are often moving out of the valley, Cox said.
As usual, market dynamics are different depending on whether units are in the resort areas or residential neighborhoods.
Sales in those areas can vary depending on the season. Slifer Smith & Frampton Vail Valley President Matt Fitzgerald noted that the first two weeks of April saw an average under-contract price of $1.7 million, indicating a shift away from higher-priced resort areas. Closed deals in that same period averaged about $3 million, indicating sales more in the resort areas in February and March.
Interest rates are often cited as a reason for the real estate slowdown. But buyers at $3 million and more are “less interested in interest rates than those at $1 million and down,” Fitzgerald said. Those buyers are often looking for “turn-key” units that don’t need any work, he added.
Fitzgerald noted he expects to see more inventory in the mid and lower valley come to market in the spring and summer seasons.
A nationwide shortage
But the fact is that the entire nation is short of housing units. A March report from CNN indicates that the country is short roughly 6.5 million units.
That’s true in the Vail Valley, of course. Under-building over the course of the past 15 years or so has made the current housing shortage more acute than it was when the national housing market went bust in 2008.
Back then, steep declines in unit sales came with equally steep declines in value. That isn’t happening now. In fact, both Cox and Fitzgerald said that after the past couple of years of a land-rush market, the valley may be returning to a somewhat normal market.
Buyers are performing more due diligence to find the right home, Fitzgerald said, adding that sellers are “having good conversations” with brokers about expectations regarding time on market as well as price.
Cox said that even with the current uncertain national economic picture, the outlook is “pretty decent” for the coming months.
But, Cox said, the price increases of the past couple of years should have homeowners thinking about something many don’t consider: insurance coverage.
“You may not have adequate coverage right now,” Cox said, adding that when he looked, a total loss claim would only cover about half of what replacing his home would cost.