Will 2016 Vail Valley real estate match 2015 numbers?
By the numbers
$160.8 million: Total sale price of real estate transactions in June, 2016.
$225.9 million: Total sales volume for June, 2015.
14 percent: Decline in year-to-date sales volume through June 30 from 2015 to 2016.
2,883: Point gain in the Dow Jones Industrial Average since its Feb. 11 low point for 2016.
EAGLE COUNTY — About a year ago, real estate brokers across the valley were talking about having a remarkable sales month in June. The sixth month of 2016 shows just how remarkable that month was.
According to the most recent figures from Land Title Guarantee Company, June transactions in 2015 and 2016 were close — there were 22 fewer sales in June of this year. But the value of those sales — the transaction volume — was vastly different. The value of sales in June of this year was 29 percent off the 2015 mark.
Through June 30, there were 11 fewer sales in 2016 than 2015, and sales volume was off 14 percent.
Fortunately, one month is merely a small part of an entire year’s sales. And the heads of two of the valley’s real estate companies see this year finishing strongly.
“We never get too excited or panic over one month — we look at quarters,” Slifer Smith & Frampton Real Estate Managing Partner Jim Flaum said. That patient approach seems to be paying off — Flaum said the company’s brokers wrote nearly one-third more sale contracts in July of 2016 than the same month in 2015.
At Berkshire Hathaway HomeServices Colorado Properties, managing broker Michael Slevin said June’s numbers, in both 2015 and this year, may be due in part to quirks of the calendar.
“A day or two one way or another can make a big difference in a month’s (numbers),” Slevin said. One or two big sales that close in the first few days of July can move dollar volume numbers significantly.
That said, Slevin said his firm also seems poised for a good remainder of the summer.
“There’s a lot of demand still,” he said. “We’ve seeing multiple offers (on homes) in multiple price ranges.”
What that means is that sellers seem to be pricing homes at right about what buyers are willing to pay.
While the market is active, neither Flaum nor Slevin believe another real estate bubble is inflating.
“Appraisers and stricter lending requirements are giving us a more true market than what we experienced in the bubble (of the previous decade),” Slevin said.
One of the problems with that bubble market of roughly 2004 through 2007 was the prices being paid by first-time buyers, Slevin said.
“The first-time buyer was looking in the ($300,000 range),” Slevin said. “You can do some things in Gypsum and Dotsero today that aren’t that high.”
Flaum added that while prices are up in many neighborhoods, there are others where values still haven’t returned to the peaks set in 2007.
Additional inventory is also stabilizing the market in places. Homes at Two Rivers Village in Dotsero — aimed primarily at first-time buyers — are selling briskly. And, Slevin said, his company is participating in a brand-new townhome project in Avon — Base Camp at Beaver Creek — aimed at second-home buyers.
“Developers are seeing demand for product,” Slevin said.
Inventory remains same
While new units are being built and sold, Flaum said there hasn’t been a big increase in inventory.
Both Flaum and Slevin said larger economic forces that affect second-home buyers in particular seem to be stabilizing.
The country’s major stock exchanges have recovered from big setbacks that came early in 2016.
The price of oil has also recovered somewhat. Flaum said that’s been a benefit for second-home buyers in that industry.
“Everybody’s kind of out of the panic mode” regarding those markets, Flaum said. “The other thing for our Vail Valley clientele is that we have a good, diversified group (of buyers).”
While the Mexican peso and other foreign currencies continue to lag against a strong U.S. dollar, Flaum said he expects buyers from other countries — only about 1 percent of all buyers — to return, perhaps this year.
Speculating about the remainder of the year — always a risky endeavor — Slevin said he expects both transactions and dollar volume to be near 2015 levels.
“The overall sentiment is positive,” he said.
Flaum also expects the market to match last year’s numbers, or nearly so.
“We’re in a sustainable market right now,” he said. “Our brokers are all really busy, but we’ll take it a month at a time.”
Those units are all deed-restricted, meaning that only people who work an annual average of 30 hours per week can live there. That keeps the apartments out of the short-term rental pool and available to local residents.