EAGLE COUNTY — Local real estate brokers for the past several years have been talking about the lack of inventory in homes for sale. That trend seemed to accelerate in 2019.
According to information from the Vail Board of Realtors, home inventory in the valley dipped in 2019. That dip occurred even as transactions and “dollar volume” — the value of those sales — held roughly even with 2018’s numbers.
But the Vail Valley isn’t one real estate market. There’s a big difference between townhomes in Gypsum and units in the valley’s resort villages.
Mike Budd, an Edwards-based broker with Berkshire Hathaway HomeServices Colorado Properties, said commonly-used data including average or median prices doesn’t mean much here. There can be a $400,000 sale and a $20 million sale in the same month, Budd said. That makes average or median price data “almost irrelevant,” he said. Another common metric, time on the market, also doesn’t mean much.
To get a better handle on market activity, Budd said his firm breaks the valley’s diverse market into several niche markets to get a better understanding of activity.
Depending on what niche you’re talking about, inventory could be somewhere between limited and somewhat abundant.
Short supply
A common way to measure inventory is to look at the units currently listed and the number of sales in a month. For instance, if a market segment has 200 listings and 40 sales per month, there’s a five-month supply of homes in that segment.
Budd noted that a six-month supply is considered a “balanced” market, meaning that the market favors neither buyers nor sellers. There’s currently a roughly two-month supply of homes in the market segment priced below $500,000, Budd said. In the segment priced between $500,000 and $1 million, there’s about a five-month supply of inventory.
On the other hand, the market for homes priced at $3 million or more tends to have more inventory, given the limited number of buyers for those units.
John Pfeiffer, the managing broker for Slifer Smith & Frampton, said inventory varies even in homes in the upper end of the valley’s price spectrum. In some areas, there could be a three-year supply of homes in that price range, Pfeiffer said. On the other hand, he added, “there’s not a ton of $3 million homes in Vail.”
Pete Seibert is a broker with Slifer Smith & Frampton said some of the inventory in the market’s upper reaches is made up of sellers who are downsizing from formerly large vacation homes.
And when attractive units come on the market, they tend to sell quickly, even in the second-home sector. Seibert noted that units at the Riverfront Lodge in Avon were available to go under contract Jan. 3. Since then, 16 of the 36 available units have gone under contract.
It’s tight everywhere
Budd noted that the entire state is seeing tight inventory numbers, particularly along the Front Range.
Some of those communities’ markets didn’t fare as well as the one in Eagle County.
Some of those areas saw year-over-year declines in the number of transactions dollar volume, Budd said.
Eagle County will end 2019 with a just a handful of unit sales short of 2018’s numbers, as well as a gain in dollar volume.
But that doesn’t broaden the choices available to those shopping for homes priced at less than $500,000. Pfeiffer said doesn’t help those who might want to sell their existing homes in that price range, if they intend to stay in the valley.
And, while inventory is likely to remain tight for the forseeable future, Pfeiffer said listing homes for sale can be a seasonal proposition, particularly in the local residents’ market. Sellers don’t usually list homes during the school year, Pfeiffer said.
And, Budd said, there’s new construction in the Eagle and Gypsum markets.
Despite the inventory crunch, Budd said the market remains solid.
“We’re still close to $2 billion in annual volume, and we’ve seen a nice steady climb (over the past decade),” he said. “That’s healthier than what we’ve seen in the past.”
Vail Daily Business Editor Scott Miller can be reached at [email protected] or 970-748-2930.
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