Ask a Realtor: Is now a good time to buy?
On Real Estate
Dear Mark and Laurie: In the wake of the pandemic and looking to diversify my investments, I am wondering if this is a good time to buy. I am interested in both the more moderate price range to help my daughter and son-in-law get into a starter home as well as the luxury market for my wife and me. What are your recommendations given current market trends and listings?
— COVID-19 Buyer
Dear COVID-19 Buyer: Two perspectives are necessary to give a complete picture. Eagle County is loosening restrictions, but county officials are still asking “non-residents” not to come to the valley. While there are some similarities in the two markets — the local market, aka homes for your daughter — and the resort/luxury market, for you and your wife — they really act independently of each other.
In terms of similarities, the real estate market, both in the Vail Valley and nationwide, is very fluid right now and what we know today could change tomorrow. That being said, market reports are showing values have remained stable even with COVID-19 restrictions. It remains to be seen on any adjustments, as there could be long-term ramifications. But currently, the landscape has remained pretty solid.
The moderate price range for your daughter
The good news is we are getting into our most active time of year for the real estate market and are seeing more sellers wanting or needing to sell, so there could be more options for buyers right now. Coupled with historically low interest rates and some existing loan programs that can assist the first-time homebuyer with closing costs and down payments, the timing is good for buyers who have the financial confidence and track record to invest and sustain monthly payments. Understanding that you may be helping your daughter with financial support, the loan programs may not come into play, but know lenders are looking more closely at financial stability and employment as part of the underwriting process. If your daughter is going to be on the title, this is something to factor into the decision-making process.
Heading into summer
While there is a shortage of available properties right now, it is expected more will come available as we approach summer. On the financial side of home-buying, it comes down to competition. The coronavirus has dissuaded some buyers from home shopping so you may face less competition until such time as the economy turns around. Another advantage is if you can come up with the down payment (most lenders are looking for at least 20% down right now), you can purchase a home and your mortgage payment could be less than paying rent.
Locally, there are strict safety precautions in place when viewing homes. It comes down to your (and all buyers) comfort level and how you feel about viewing an available property and/or utilizing virtual tours. We recommend you consult with a local real estate broker to let you know what procedures are in place and then you can decide if you would want to start the home viewing process.
In addition to stable pricing through the pandemic thus far, additional COVID-19 influences that help the resort/luxury homebuyer is the Vail Valley’s appeal with its wide-open spaces and more room to live and move around. We also have a finite amount of land and development opportunities given the mountain settings. Even at the height of COVID-19 restrictions, residents could still get outside, have plenty of space, and recreate. It has served the Vail Valley resident well for many years. The appeal of the Vail Valley, from Vail to the downvalley communities, is only expected to rise as more people look to make memories in the mountains and feel they have a safe haven in which to live and work.
For the aptly suited buyer, the overall uncertainty does present an opportunity to test the motivations of sellers, who may be more motivated then they were 60 days ago. While it’s not recommended to completely lowball an offer, there does seem to be more flexibility in the minds of sellers to look at different options. We have seen some better deals and/or adjustments based on timing and both parties’ interest to seal the deal in a timely manner.
With more movement in the economy and Phase 1 reopenings taking place, we are also seeing more homes coming back on market. To date, there has not been any real price adjustment but again, this can all change as conditions improve — or not. For now, the Vail Valley’s resort/luxury market is holding its own and is expected to continue to do so as demand remains strong.
Good news for buyers
Whether it’s the local or resort/luxury market, if you feel good about your income and prospects, it is as good a time as any to buy. Interest rates are at historic lows and there is more opportunity amidst uncertainty to negotiate. Spring into summer has historically brought more homes to market and there are several downvalley developments that have recently come to market or are on the horizon that will present more options for buyers as well as competition among sellers.
Good luck in your search.
Mark Weinreich and Laurie Slaughter are longtime Vail Valley residents and veteran broker associates with locally owned Berkshire Hathaway HomeServices Colorado Properties. Both are members of highly respected broker teams, including The Weinreich Team, specializing in resort-market residential real estate and The Slaughter Group, a leader in residential, commercial and development property sales. Their knowledge and expertise spans from Vail Village to Gypsum and they are among the top-performing brokers in the Vail Valley. Mark and Laurie can be reached at Mark@VailMtnRealEstate.com or 970-376-3204 and Laurie@BHHSVail.net or 970-471-0108.