Will county’s real estate sales top $2 billion?
By the numbers
$121 million: Biggest single November sale — Vail’s Four Seasons hotel.
$1.76 billion: Eagle County sales volume through Nov. 30.
40: November home sales in Eagle and Gypsum.
44 percent: November sales of $500,000 or less.
Source: Land Title Guarantee Company.
EAGLE COUNTY — It took one very large commercial sale, but real estate sales in the county may this year hit a milestone not seen in nearly a decade.
Thanks to the November sale of the Four Seasons Resort Vail — for $121 million — the county’s real estate sales volume was at $1.76 billion through Nov. 30. With a good December, that puts a $2 billion sales year within the realm of possibility.
According to the latest data from Land Title Guarantee Co., which tracks sales recorded with Eagle County, the county came close to the $2 billion marks in 2015 — $1.989 billion — but the we haven’t seen a $2 billion sales year since before the national economy crashed in 2008.
Jim Flaum, managing partner of Slifer Smith & Frampton Real Estate, said he isn’t sure he’d bet on hitting that $2 billion figure. But, he said, he expects the final number to come close.
The Four Seasons sale gave a good-sized boost to a sales volume year that had slightly lagged 2015’s numbers. But 2016 also saw an increase in the number of transactions.
As of Nov. 30, total transactions were running 15 percent ahead of 2015.
Some of those sales are new homes, but there still isn’t a lot of new construction going on. Through Nov. 30, there were 159 new home sales out of $1,882 total transactions.
While brokers have been asking for new inventory for a while, the math doesn’t quite add up in many areas.
“I’ve talked to a few general contractors, and (new construction) might not be worth it,” said Scooter Slaughter, of Berkshire Hathaway HomeServices Colorado Properties. “It’s still cheaper to buy than to build.”
Onie Bolduc, who also works for Berkshire Hathaway, added that “you have to be good at what you do to make new construction work.”
Shifting Economic Conditions
On the other hand, some of those economic conditions may be shifting a bit.
While two months doesn’t make a trend, Flaum said his company has seen the economic bump that’s come in the wake of the Nov. 8 presidential election.
That bump has seen stock prices rise, with the Dow Jones Industrial Average of stocks now flirting with 20,000 points. The Dow closed 2016 at 19,762, off a bit from earlier in the last week of the year.
The strong market can have an effect on local real estate, especially in the upper end of the market. Currency exchange rates can also have an impact, given the U.S. dollar’s current strength.
Still, sales to international buyers have been about 1 percent of the total market for some time. That hasn’t changed in the past couple of years.
Bolduc said international buyers, at least on the high end of the market, seem relatively unfazed by currency fluctuations.
“The U.S. remains the place to be for investors — there’s no other place to put your money,” Bolduc said.
At the first- or second-time buyer end of the market, interest rates may have an effect, too.
Slaughter, who works primarily in the Eagle and Gypsum areas, said he hopes a recent slight increase in mortgage rates helps stabilize the market for homes priced at $500,000 and less.
Slaughter said this year saw some significant increases in asking prices. That, in turn, kept buyers away from some homes. Higher mortgage rates may bring some of those prices down, encouraging a better balance between buyers and sellers.
Higher mortgage rates may be one of the headwinds facing the market into 2017.
But Flaum said the potential problem he sees is a continued lack of inventory in certain areas. Supply is tight in Vail Village and Lionshead Village, Flaum said, adding that the market is also tight in the Eagle Ranch neighborhood in Eagle.
Meanwhile, Slaughter said there are a number of homes for sale in Gypsum’s Cotton Ranch neighborhood, with some of those homes sitting on the market for some time.
Even with neighborhood-to-neighborhood variations, the brokers interviewed for this story remain positive about the year to come.
“The overall market feels good,” Flaum said. “I think 2017 will continue that.”
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, email@example.com and @scottnmiller.
Reconstruction work that was initially slated for completion in 2018 should be done by October 2019