March real estate looks poised for rebound
By the numbers
$67 million: Value of all Eagle County real estate transactions in February.
79: Total transactions in February.
24: Transactions in Eagle and Gypsum.
6: Transactions in Vail Village.
Source: Land Title Guarantee Company.
EAGLE COUNTY — The local real estate market in February experienced its second consecutive month of declines from the previous year. And, as with the market in January, the value of sales in February dropped 25 percent from the 2015 numbers. But the market seems poised for a good month in March.
Land Title Guarantee Company uses data from the Eagle County Clerk and Recorder’s office for its monthly report, but there’s a lag between when those transactions are recorded and reported. That means the Land Title numbers for February are reported in April.
The Vail Board of Realtors uses data from the Multiple Listing Service, which it operates. Those numbers usually come a bit more quickly. Preliminary figures from that group show a 21 percent increase in closed sales for March of this year versus the same period in 2015.
Jim Flaum, managing broker of Slifer Smith & Frampton Real estate, said beyond the closed sales, brokers for that firm saw a roughly 40 percent increase in written contracts during March. Those sales will close in April or a bit later.
Uneasy Financial Markets
But what happened to start the year?
The New York Stock Exchange had a rough start to the year, with consistent, significant declines during the first weeks of the new year. The Dow Jones Industrial Average bottomed out Feb. 11, closing below 16,000. The Dow has recovered since then, closing above 17,500 on Thursday.
Then there’s the fact that this is a presidential election year, and an odd one, at that.
Uncertain financial markets combined with an “can give you an uneasy feeling,” Flaum said, adding that potential buyers will often wait before considering spending millions on a home in a resort area.
And transactions in the upper valley were off during the first two months of the year.
Craig Denton, of Berkshire Hathaway HomeServices Colorado Properties, is a veteran of the upper valley’s real estate market. He said the early-year declines aren’t terribly unusual.
“Everyone thinks we should be overly busy on transactions since everyone comes here during that time,” Denton wrote in an email. Instead, though, people tend to look, leave, then buy later in the year.
“It’s always been that way unless there is a major product or project on market and an insatiable appetite of buyers,” he wrote, adding that isn’t happening now.
The resort areas tend to attract different buyers than those looking from Dowd Junction west, something that can be seen in the continued strength of the market for homes priced at $1 million and lower.
“There are still a lot of locals buying,” Flaum said. “A lot of people are worried that at some point this great (mortgage) interest rate is going to change, and some are doing better financially than they have for a while.”
Lack of Inventory
Still, there are some problems in the Vail Valley market that apply from East Vail to Dotsero. The biggest problem is lack of inventory — there simply isn’t a lot on the market right now.
Given the strength of March sales and contract-signings, Flaum and Denton said they aren’t terribly worried about the early-year slump.
“We’ve been on a six- to seven-year upward trend, and this is a naturally occurring phase,” Denton wrote. “Then throw in all the economic and political factors, and last year is a tough act to follow.”
Flaum agreed, noting that while prices in the resort areas have been climbing, some areas of the valley have seen steep appreciation, but only back to the price levels of 2007. Other areas, particularly in the western valley, aren’t all the way back from the pre-slump peaks.
That could take a bit more time, he said.
Flaum recalled that he bought a home in Eagle-Vail in 1980. When a deep recession hit in 1981, it took eight or nine years for that home’s value to recover to its 1980 purchase price.
But this recovery is different, Flaum said.
“Inventory is very low, and normally that speeds up the supply and demand curve, but that’s been slow to kick in,” he said. “With that ever-tightening supply, sooner or later it will drive up prices.”