COVID-19’s impacts on Vail Valley real estate
March numbers indicate some impacts, but the Vail market remains strong
Brought to you by the Vail Board of Realtors®
Over the last month, the nation’s economy as a whole has seen a significant impact due to the coronavirus. The Vail Board of Realtors® is supporting our members of the real estate community by providing education and tools to get them through a challenging time and prepare for the future. As we look to helping each other and the community, the question of how the market is doing comes up.
‘People are still buying and selling real estate’
“The Vail MLS March indicators prove that uncertainty relating to the coronavirus has impacted Vail Valley real estate,” Betsy Laughlin, Vail Board of Realtors® Past Chair, said. “The reports for April and May will be more telling in terms of the bigger picture impact. We’re still seeing properties come onto the market daily — people are still buying and selling.”
For example, there were two recent listings in EagleVail that went under contract in less than a week. Two large units at the Four Seasons went under contract in March — one priced at $16.9 million and the other at $8.2 million. “People still believe in Vail,” Laughlin said.
Compared to March of last year, transactions in Eagle County were down almost 24%, but sales prices were up 1%. Total dollar volume was down 25%, but the average price per square foot went up 13.4%.
“Since March 15, 88 properties in the county were either withdrawn from the market or had contracts canceled. Homes coming off the market are most likely seller-initiated, especially if the homes are occupied,” said Laughlin. Starting April 27th, Realtors are allowed to do showings following social distancing measures, though open houses are not allowed until we know it is safe for the community. Potential buyers can view properties, virtually or online, thanks to virtual tours, videos and 3D walkthrough technology.
“It’s not business as usual, however with advancements in technology, we’re still able to get things done,” Laughlin said. “Inspectors and appraisers are allowed to enter homes and conduct business, so they have not been stifled under the current situation.”
Not like the last recession
The Great Recession from 2007 to 2009 was due to the subprime mortgage crisis. It devastated financial markets, banking and real estate, but the current economic situation is much different. “After a run-up in housing prices in the early part of the decade, home prices plummeted, and thousands of borrowers couldn’t afford to pay their loans, which was what caused the recession last time,” Laughlin said. “Colorado overall, and especially the resort areas, remain attractive locations for real estate investment. We should all try to remain calm and positive.”
Sellers who removed listings in March are likely in a temporary holding pattern to see what happens next with the coronavirus rather than keeping the listing active only to accumulate days on the market. Laughlin has sellers who are keeping their listings on the market for online exposure. “We’re in a transitional or shifting market, and time will tell — depending on how long this pandemic lasts — whether we’ll see an adjustment on pricing and an increase in inventory,” Laughlin said. “Typically, this is a time when you’d see homeowners list their homes to gear up for summer marketing, yet we haven’t seen a flood of properties come on the market,”
After the recession, there was an influx of buyers from urban areas who decided to ditch the city lifestyle for the mountains. Laughlin expects a similar impact from the coronavirus.
“People want to experience the resort lifestyle,” she said. “Not every sector has been shut down, and there are buyers out there looking online for the right home.” Historically low-interest rates are also positive for buyers, which can help increase their buying power. Someone who may not have been able to afford a home previously might be able to afford a home now.
“If you are comfortable with the new virtual way of buying and selling real estate right now, there are some great opportunities for everyone,” Laughlin said.
The March indicators for Eagle County, real estate show, declines in both pending and closed sales. However, an increase in new listings is a promising indicator for the local market. A slowdown in the market was expected with the recent coronavirus pandemic. Real estate transactions were postponed in the short term, but many Realtors® believe buyers and sellers will return to the market soon.
“Local supply has been low over the past few years and has become the new normal before the coronavirus pandemic closed Colorado ski resorts in mid-March,” said Laughlin. “There could be a pandemic-related surge of listings in the coming months. It’s all uncharted waters at this point,” Laughlin said.
“Home is where the heart is”
In this time of uncertainty, homes have become so much more than they have ever been. They are not only shelter, they are now also offices and schools. The real estate community is following the stay-at-home work orders and taking precautions for buyers and sellers and the community as a whole. We will get through this together. If you have questions regarding the market, contact a Realtor® who will help guide you during this time.
Visit vbr.net for additional information about Vail Valley real estate and to find a local Realtor®.