Eagle County Real Estate Market Report: Promising signs of a rebound
Despite macroeconomic factors that have slowed much of the country, Eagle County continues to see strength in the residential real estate market and high buyer demand, with unit sales up 8.4% in October compared to 2022. Additionally, and in a demonstration of market activity and resiliency, there are almost 15% more properties under contract than this time last year and inventory has risen 5%.
While unit sales are down 24.6% year-to-date, this represents a nearly 15% improvement over the 40%-unit sale decline at the end of the second quarter this year. With interest rates expected to decline in 2024, activity is expected to continue to increase through the winter season and into the spring of 2024.
One of our distinct advantages is that there continues to be a strong buyer pool interested in living either part- or full-time in the mountains. While we have above-average housing costs, the region offers a number of market opportunities that provide a variety of price points and lifestyle options, along with an experienced pool of brokers who “live the life” and make staying on top of market trends a priority. In turn, buyers and sellers receive sound advice and contract negotiation acumen that creates win-win opportunities for buyers and sellers.
The luxury/resort real estate market continues to be one of Eagle County’s strengths, largely due to more cash purchases compared to the downvalley market as well as limited inventory in the sub-$1.5M market. Janet Boeser, a broker associate with Berkshire Hathaway HomeServices Colorado Properties’ Beaver Creek Villa Montane office, notes that what sets our luxury real estate market apart from other real estate markets is that there are more second homeowners than primary homeowners. And with a large international and investor pool of sophisticated buyers who expect a high level of service and luxury amenities — and can afford it — our market remains competitive as demand continues.
For those wanting to get into the luxury ski resort real estate market, Boeser says buyers will often start out buying a small vacation home or condo. As time goes on, they begin taking advantage of the strong market and equity they’ve accrued over a few years. They’ll sell that smaller home/condo and use that equity to buy a more expensive larger property or buy in a more desirable location. Over the years as their needs change or family grows, they continue to buy and sell, upgrading their next purchase.
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“In many instances, a second homeowner can be involved in selling two, three, or four of their properties over a period of 20 or 25 years,” Boeser said. “It’s contributed to building a strong foundation for continued strength in the luxury/resort market in the Vail Valley.”
Another advantage for second homeowners who often only use their ski home for two months of the year is being able to tap into a built-in rental market that can provide a steady cash flow stream and allow homeowners to maximize their return on investment with short-term rentals.
“This has become a huge selling point for homeowners who don’t want their property to be vacant the other 10 months of the year,” Boeser said. “In addition, there are potential tax benefits that can also help offset costs, making a second home purchase in the Vail Valley even more attractive to buyers.”
Rick Messmer, a managing broker for Berkshire Hathaway HomeServices Colorado Properties’ Eagle office, says the downvalley market has experienced a growing number of buyers deciding to stop waiting and buy.
“Some of this has been driven by a need for a home, rather than a want,” Messmer said. “If a buyer needs a larger or first home, there is a greater motivation to take on a mortgage at current rates because they believe they can refinance at a later date. The need is driving the purchase.
According to Messmer, the need is also a factor on the seller’s side.
“We are seeing a shift from the want to sell to the need to sell,” Messmer said. “Whether it’s to downsize, upsize, or a move, there are a growing number of sellers who need to make a change in their real estate portfolio, which means more listings and options for buyers.”
The key to successful outcomes still stems from the right price, the right timing, and the right buyer. Gone are the days of a “selling season.” The right-priced home will sell no matter what time of year and October’s numbers show this (historically a slower time of year).
“Buyers are becoming more accepting of elevated prices and mortgage rates, which is being driven by a need to buy vs. a want to buy,” Messmer said. This is where working with a knowledgeable broker helps both sides — both in pricing a home right and negotiating contracts to ensure the best possible outcomes.
Michael Slevin is the president and owner of Berkshire Hathaway HomeServices Colorado Properties, started by his father, John, 52 years ago. The company has grown to 12 offices in 10 Western Slope and mountain resort communities, spanning from Grand and Eagle Counties to the Western Slope.