While Vail Valley real estate continues to produce impressive numbers, as might be expected, we are beginning to feel the impact of the many economic uncertainties which currently abound.
What’s happening in the market?
May year-to-date reports reflected a drop of 30% in sales dollar volume and 47% in the number of transactions in Eagle County. May was the second slowest month since 1996, and my gut feeling is that June was equally lethargic.
Particularly hard hit is the low-to-mid range of our market, which is largely dependent upon the ability to finance a sale. This will likely remain the case until the mortgage industry regains its legs, consumer confidence rises, and other uncertainties begin to clear the air.
The luxury niche of our market, in contrast, continues to do very well. Much less dependent upon financing, sales of residential properties listed at $2 million and greater continue at a strong pace. Even taking into account the numerous closings at new projects such as Arrabelle, Forest Place, and others, sales in this niche remain well ahead of any year prior to 2007.
Comparison of Residential Transactions
Listed $2 milllion and above
Year-to-Date July 5
2008 - 116 sales
2007 - 145 sales
2006 - 101 sales
2005 - 77 sales
2004 - 63 sales
2003 - 38 sales
How does the Vail Valley compare?
Of further interest, our market stacks up very well when compared with others throughout the intermountain west. A report compiled by the Rocky Mountain Resort Alliance showed that, at the end of the first quarter, the Vail Valley was over $200 million ahead of Park City/Deer Valley, our nearest competitor, and significantly above others such as Aspen and Telluride. This is yet another tribute to all that the Vail Valley has to offer its owners and guests.
What does the future hold?
Most of the tenured real estate brokers, owners and investors I deal with see this as but a temporary pause in our market. If history holds true, which I fully expect, we will be off to the races again within 12 - 18 months, and perhaps sooner. If the next surge is like the one of the past five years, we can expect to see another rush of buyers and rapidly escalating prices once we turn the corner.
What does this mean to me?
Within this environment stands an opportunity to buy which has not existed for several years. Buyers with a historical perspective of the Vail Valley have witnessed our ability to ride through challenging times, and many of these astute individuals recognize that the lulls between hot streaks are a very strategic time to acquire property. In particular, many developers of speculative properties, whether single family homes on the golf course or new condominium projects in town, are hungry to negotiate deals. Those buyers who step up to the plate now will be thankful they did.
What's the bottom line?
All of this is to say that, in spite of the uncertainties in the financial markets, run-up in oil prices, and mortgage market corrections, luxury resort real estate in the Vail Valley still represents a very sound acquisition. Beaver Creek and Bachelor Gulch are essentially built-out, and prime new projects in Vail will follow suit. Once they are gone, they’re gone. I encourage you to take advantage of this pause in our market, and if you see a property which meets your family's dreams and wishes, to move forward with its acquisition. Doing so will create irreplaceable memories for your family over the years, and if history holds true, you will be very pleased when it comes time to sell!
