Who are real estate buyers in resort markets?
DENVER — As second home buyers flock to Colorado resort areas including the Vail Valley for idyllic summer temps, mountain charm and favorable housing options, one thing often remains a mystery — who is buying and why?
In Eagle County, approximately 17 percent of property sales so far in 2018 came from the Front Range, while nearly 30 percent came from out-of-state, including the traditional Colorado feeder markets of Texas, California, Florida and Illinois. With the charm of a European-inspired town, Vail attracts buyers from all over seeking exquisite mountain views and Colorado’s quintessential active lifestyle.
Experts say “a wealth surge” is responsible for boosting the second home market noting, “many well-off Americans have been getting wealthier.” In fact, the United States added more than 1 million new millionaires in 2017 as stock prices rose, per the Global Wealth Report published in December 2017 by Credit Suisse.
According to Realtor.com, Hawaii and Colorado posted the nation’s fastest luxury price growth, beating out traditional luxury hubs including New York and San Francisco. Luxury home prices increased in Maui by nearly 33 percent, while Eagle County rose by 31.5 percent.
Buyer confidence building
In 2017, the National Association of Realtors Investment & Vacation Home Buyer’s Survey indicated buyer confidence reporting, “more than 80 percent of vacation buyers think now is a good time to purchase real estate”. Additionally, 23 percent of vacation buyers stated they are likely to purchase an investment property, while 21 percent are very likely to purchase another vacation property in the next two years.
What does all of this mean? Vacation properties in resort areas are on the rise. The National Association of Realtors report indicates that resort and rural areas make up for 50 percent of the vacation home market, with 14 percent of buyers specifying the mountains as their vacation homebuying area of choice.
For those weighing their options, it’s important to ask yourself how you plan to use your vacation home — for enjoyment, for income, as an investment or all three? There are several key factors to consider, including lifestyle and location, accessibility, current low mortgage rates which are expected to rise, tax laws, plus maintenance costs versus supplemental income.
According to the Sotheby’s International Realty Global Luxury Residential Real Estate Report, ultra-high-net-worth demand for residential property is growing fast with 79 percent of the world’s ultra-high-net-worth population owning two or more residences. Of that percentage, secondary residences are 45 percent more valuable and twice as large. Key findings from the report indicate that purchasing decisions are driven by emotional value, practical value and business value, and considering that 7 percent of the world’s ultra-high-net-worth fortunes are made through real estate, it’s tough for second homebuyers to simply sit on the sidelines.
More than skiing
Top features for renters and second home buyers in Colorado go beyond the typical ski-in/ski-out chalet. People want square-footage, luxurious guest quarters and room to accommodate family and friends. Swimming pools, hot tubs, fire pits and wine cellars top the list of must-haves, as well as kid-friendly amenities, parking and a deck or terrace to take in the majestic mountain views. Resort buyers aren’t willing to sacrifice on location, either. In Colorado, they want easy access to the slopes, as well as proximity to nightlife and entertainment, such as Vail’s acclaimed foodie scene and upscale boutiques.
As year-round outdoor recreation opportunities take precedent, traditional ski towns are starting to take note, catering to year-round events and entertainment.
So far this year, market data collected by LIV Sotheby’s International Realty demonstrates continued growth in the resort region, with an increase in average home prices and fewer days on market for Eagle County. Additionally, Land Title Guarantee Co.’s reporting shows international buyers from Sweden, United Kingdom, New Zealand, Canada, Australia, Mexico and Grand Cayman purchased property in Colorado in 2018.
With fewer days on market and increased demand, sellers and renters in resort markets are seeing a healthy return on investment, while buyers across the Front Range and the globe are finding the perfect spot to park their cash — secluded retreats in the Rocky Mountains.
To view LIV Sotheby’s International Realty’s current listings or to list your home for sale, visit resorts.livsothebysrealty.com or call 970-476-7944.
LIV Sotheby’s International Realty, the exclusive Board of Regent for the who’s who in luxury real estate, has 15 office locations in the resort communities of the Vail Valley and Breckenridge, also including Denver metro and the surrounding areas.