This summer, real estate looks strong in the Vail Valley, at least according to recent sales, number of showings and Realtor predictions.
First quarter reports
Eagle County’s first quarter real estate report showed a 19.67 percent increase in median residential sales prices from last year’s first quarter numbers. Transactions also rose by 5.67 percent, according to Land Title Guarantee Company. The average residential price increased by 10.78 percent.
Much of the market’s strength came from luxury home sales above $2 million.
“The Christmas holiday (with sales that closed in the first quarter) was huge for luxury real estate in Vail,” said Diana Meehan, a Coldwell Banker Realtor who has been selling real estate in the valley for 34 years.
Both holiday sales and strong interest in newly built, multi-million-dollar properties in Vail have “skewed things,” Meehan points out, but overall, the market shows an increase in median sales price by 28 percent from May 2013 to 2014.
“That’s a pretty strong sign,” she said.
What’s happening now
Dollar volume has increased from the same time last year by 46.58 percent, with only a 1.55 percent increase in transactions between Jan. 1 and June 23, 2014,
Year-to-date sales are up from last year 65.7 percent in homes priced from $2 million to $5 million, and they’re up a whooping 240 percent (17 sales this year, compared to five last) for homes priced above $5 million. Dollar volume in the $5 million-plus category also increased by 307.84 percent, according to Slevin.
The number of listings has decreased in the last year, by 8.6 percent, Meehan said. That, in addition to the lack of foreclosures, has caused home prices to increase. In April and May, the number of sales decreased by 4.6 percent, which she says is due to lower inventory and higher prices.
“We do have a slowdown, but it’s not a huge slow down,” she said. “You can expect to see higher prices this summer in the overall market.”
Take a closer look
While real estate headlines have been mostly positive, it’s important to delve into the details of Eagle County when buying or selling, because each neighborhood tells a different story, said Michael Slevin, a Realtor at Berkshire Hathaway.
While some segments of the market, such as Vail Village, estates on Vail Mountain, Beaver Creek, Bachelor Gulch and Arrowhead, are showing a flurry of activity, the rest of the valley is experiencing “more normal sales and appreciation growth,” he said.
In Eagle and Gypsum, which suffered the most severe price decrease during the recession, real estate agents have seen “quite a pick up,” Slevin said.
“Sales are lagging only because of inventory challenges, (but) we’re seeing a tipping point where sellers are at or above where their mortgage is so they’re now making selling decisions,” he said. “I think we’ll see more inventory come to market.”
He expects the peak in inventory to occur in July and August, which is when buyers have the most options of the year, he said, with the lowest inventory usually occurring in May.
While historically summer real estate usually doesn’t take off until July 4, many real estate agents have been showing properties to more buyers in mid- to late June.
“It’s been an early takeoff this year,” Meehan said.
“June has been active, and inventory is increasing across the board,” Slevin said. “It’s a good sign.”
Slevin also said that a lot of March and April contracts closed in May and June, so he expects healthy second quarter reports, both on the luxury market and “bedroom communities,” or the local buyers’ front.
The real estate market is experiencing a transition, in which buyers still want enormous deals and sellers aren’t giving properties away anymore.
“(People) are going to have to pay more money for what they’re buying,” Meehan said. “That’s a mindset people have to come to grips with and take a look at. People should be buying now, before interest rates go up. The mindset for the last four or five years has been a buyers’ market (where buyers get) 10 percent off the purchase price. That mindset needs to change because that no longer is the case.”
However, Meehan said it’s not a sellers’ market yet. As Slevin points out, second homeowners don’t have to buy; they can wait. And in the bedroom communities, price is dictating sales. Homes in Singletree, in Edwards, sell quickly, due to few listings.
“People have gotten the idea they need to jump on it,” Meehan said.
Slevin sees downvalley sales, which are the most active, continuing, due to local demand.
“There’s a big backup of people who’ve been waiting to buy,” he said.
But, he warns sellers against getting too greedy.
“There will be stagnation if sellers get too aggressive or bullish with the prices of their properties,” he said. “Buyers will wait.”
So far, though, buyer confidence, along with a strong stoick market, is helping the real estate market recover. Meehan predicts home prices will rise even more by the end of the summer.
“Those looking for steals and deals, that has passed us,” Slevin said. “It’s (now a market ruled) more by traditional supply and demand."
By the Numbers
Residential sales, year-to-date, as compared to 2013
Range: 0-$300,000 Range:
Unit sales down 38.69%;
Average price down 37.3%
Range: $300,001 - $700,000
Unit sales up 17.24 percent
Average price up 15.48 percent
Range: $700,000 - $1 million:
Unit sales 5.26% down;
Average price down 5.08%
Range: $1 million to $2 million:
Unit sales, up 4.17%,
Average price up 0.93%
Range $2 million to $5 million:
Transactions up 65.71%,
Average price up 64.17%
Range: $5 million plus:
Transactions up 240%
Average price up 307.84%
Activity by area: Jan. 1 – June 23, 2014
Vail Village, Lionshead, Cascade:
Dollar volume up 73.61%,
Number of transactions flat at 0% (41 total)
Beaver Creek, Bachelor Gulch, Arrowhead:
Dollar volume up 65.25%
Transaction volume up 36.36%
Mid-Valley (Minturn to Wolcott):
Dollar volume up 6.35%
Transaction volume down 4.67%
Dollar volume up 10.23%
Transaction volume down 14.4%