Changing Course
Photo credit: Courtesy of Vail Resorts
The radically redone Lionshead area of Vail has accounted for $109,603,000 in sales in the first quarter, most of it in Vail Resorts’ new Arrabelle at Vail Square hotel and residential project.
The overall market downturn plaguing the rest of the nation appears, according to a number of experts, finally to be affecting the Vail Valley, albeit in a muted manner.
“Everybody was really optimistic coming up on the end of '07, thinking maybe we were going to sneak through and not have the impacts here,” comments real estate broker and former Vail mayor Rob Ford. “Now here we are and everyone’s saying, ‘Oops, maybe we are going to be affected,’ but no one seems to know how deep it’s going to go.”
Even though the number of transactions was off by 42 percent through the end of March compared to the same period in 2007, the silver lining came in two shades for local realtors and developers. First, 2007 was a record year that bucked every national trend, from Florida to Nevada, where home sales and values were down most of the year. So the readjustment in 2008 is a relative thing.
In Eagle County in 2007, according to data provided by Land Title, overall residential and commercial sales totaled a record $2.96 billion, surpassing the previous record of $2.8 billion set in 2005. That largely flew in the face of every national trend for ’07.
Secondly, sales volume only dipped an average of 20 percent the first three months of 2008, owing mostly to the continued strength of the high-end market. The sub-prime mortgage crisis was impacting the sales of lower and mid-range homes, but the high end (homes in excess of $3 million), according to lenders and brokers, was still very strong in the first quarter.
“I would say our volume has been consistent with last year, which was a record year. All in all, we've been really busy,” said Joni White Taylor of Sonnenalp Real Estate in Vail. “I see the mid-range — $800,000 to $3 million, outside of Vail — has slowed down a bit. But the high end is doing very, very well.”
For instance, the average residential (single- and multi-family) home price for the first quarter soared 40 percent over 2007 to $1,472,957 in the first quarter of 2008, with eight homes selling in excess of $4 million. Overall, in the first quarter of the year, 25 home sold for more than $4 million.
“The high end has shown some strength, however, the number of transactions in the high end isn't enough for the real estate community as a whole to live on,” Bill Wilto of RE/MAX Vail Valley said. “But the market is remarkably strong when you compare it to other parts of the county. We still have people who want to buy and are still able to get good mortgages.”
March was one of the strongest months of the year so far, showing signs that perhaps the local market is already reversing the first-quarter downward trend. Sales volume was off only 14 percent, with nearly a quarter-billion dollars in sales ($228,388,700).
And Vail’s multi-billion-dollar New Dawn redevelopment was a big part of that. So far, the radically redone Lionshead area has accounted for $109,603,000 in sales in the first quarter, most of it in Vail’s new Arrabelle at Vail Square hotel and residential project.
“The high-end niche of our market continues to lead the way, showing strong gains across the board,” Led Gardner of Vail-based Led Gardner & Associates, citing a 41 percent increase in the sale of properties priced between $3 million and $5 million over the past two years. “There’s still a large pool of money circling the globe that pursues luxury trophy homes.”
Michael Slevin of Vail Valley’s Prudential Colorado brokerage, believes that, although the national situation has affected the region, “it has a smaller impact on Eagle County. Slevin says an “adjustment” is being made. “I think this market is taking a pause and that, in the long term, is probably very healthy for the market as a whole. Our prices have remained steady and there hasn’t been a decline as you have seen in other markets.” He notes that when Vail’s market adjusts again, improved from prices that remained flat for the last six months, we will have an upswing we’re accustomed to and will not be trying to rebuild upon a price decline.
Jim Flaum, president of Slifer Smith & Frampton, the largest brokerage in the region, offers the following observation of today’s local market: “In the lower price points we see less people buying than a year or two ago in a frenzy market, but we’ve had some great activity in the higher end,” he says. Flaum’s company accounted for $1.48 billion of the sales in Eagle County in 2007 — a new record for the firm.
“There’s a certain amount of people who want to wait and see what happens, make sure the stock market straightens out and make sure everything’s going to be all right,” Flaum explains. “That’s certainly more of a factor compared to three years ago.”
According to Ron Byrne of Ron Byrne & Associates Real Estate, “I think Vail’s (high end) is doing very well and will continue to do very well. ... The demand is at the same level but buyers want to know their getting good values…. But that doesn’t change the purchasers’ logic (on wanting to live here). They still want to buy here whether they’re goIfers, skiers or whatever. This is the place to be.”
David O. Williams is a freelance writer and founder of realvail.com. His work has appeared in a number of national and regional publications. Dave, wife Kristen and their three children live in Vail.
