Dunn: Real estate fence sitters taking the plunge in Beaver Creek (column)
Beaver Creek and Bachelor Gulch residential real estate sales are finishing strong the third quarter. With inventory levels remaining low, the resort experienced a surge of activity that has produced more than $55 million in closed transactions.
The more notable statistic is $56 million currently under contract and waiting to close. The third quarter of 2016 produced more than $71 million in closed transactions. With more than $100 million either closed or in the pipeline, this marks a noticeable improvement from last year.
The Vail Valley real estate market has been robust and, most noteworthy, the luxury-home market has seen significant momentum since the fall of last year. Prior to the presidential election, the luxury home market of $5 million-plus was quiet, and some might even say nonexistent in Beaver Creek and Bachelor Gulch.
For better or worse, once the presidential election was in the rearview mirror, there was an exhale that reset the market. Those sitting on the sidelines, creating a pent-up demand, decided to move on with their buying decisions and quickly breathed life back into the resort and the luxury-home market of Beaver Creek Resort.
This renewed buyer activity continues today, with 22 properties waiting to close ranging from $775,000 to almost $10 million, and everything between. What is most surprising is we are seeing buyers jumping on homes in a matter of weeks of being listed or, in some cases, a matter of days. The resort has not experienced this level of excitement since before the meltdown of 2008. Prices are showing significant signs of escalation after years of a slower more lateral movement.
What’s Causing the surge?
The next logical question is “why”?
I have been active in the Beaver Creek and Bachelor Gulch real estate markets for more than 16 years and have experienced this trend before. It all comes down to one word: lifestyle. The word “lifestyle” is used a lot to describe our Happy Valley — and in some cases, can be overused — but in the end, it is the ultimate driver for all things related to luxury real estate. Couple this with the strength in the equities market, and it makes for a perfect environment for a market to flourish. The before-mentioned pent-up demand or fence sitters who were waiting for something to shift are finally tired of waiting.
Whether the fence sitters are taking paper profits out of the stock market or simply repurposing funds, the decision to move on with life and the “lifestyle” Beaver Creek and Bachelor Gulch provides is taking precedent. The love affair continues to propel those to acquire that ski home that has been on the bucket list for years or to upgrade to accommodate a growing multi-generational family. This is very evident in the wide range of homes being purchased.
While the entry-level condos starting at just less than $1 million to $3 million continue to make up the bulk of the pending transactions, there have been a handful of Beaver Creek beachfront condos selling for new highs that are changing the landscape and breaking barriers for historic Beaver Creek values.
As we wind down the final days of September, my team, The Stockton Group, remains active with buyer and sellers as though it were mid-winter. The Stockton Group remains optimistic that the strong surge will continue as buyers make that lifestyle decision to own their slice of heaven known as the Vail Valley.
Tom Dunn is global real estate advisor for The Stockton Group and LIV Sotheby’s International Realty.