There are almost no homes available for $500,000 or less in Vail Valley real estate market

Buyers waiting for prices to come down, while sellers are hoping prices stay where they are

The lower and upper reaches of Eagle County’s real estate market don’t seem to share much. But this year, there are nearly as many sales of $5 million or more as there are sales of $500,000 or less.

Through the end of August, there were 78 transactions of $500,000 or less compared with 68 sales of $5 million or more. Sales of $500,000 or less as recently as 2017 were the largest single segment of sales.

By the numbers

  • 14%: Increase in real estate dollar volume from August 2021 to August 2022

  • 31%: Decline in real estate transactions from August 2021 to August 2022

  • 6%: Portion of Eagle County real estate sales over $5 million through August

  • 7%: Portion of Eagle County real estate sales $500,000 and less through August

Source: Land Title Guarantee Company


People in the local real estate business say the lack of lower-priced sales comes down to a combination of rising prices, low inventory and increasing construction costs.

Steffen Mehnert, the Vail Valley team leader for Keller Williams Realty, noted that homes at Gypsum’s Siena Lake project were first projected to start below about $500,000. Those homes — set for occupancy in May of 2023 — are now starting at $575,000 and up.

Alex Griffin is the vice president and managing broker of LIV Sotheby’s International Realty’s Vail Valley branch. Griffin said the lack of lower-priced units is “unfortunate for people trying to buy (their first) homes.”

Griffin noted that activity in Eagle has slowed significantly over the past several months.

That slowdown has also spurred some declines in asking prices.

Craig Denton of Berkshire Hathaway HomeServices Colorado Properties said he’s seeing price reductions in between 6 and 10 units every day. Those prices are still higher than those seen in 2019.

Mehnert added that brokers are again hosting open houses at homes up and down the valley.

“There’s a real disconnect between buyers and sellers right now,” Mehnert said, with buyers waiting for prices to come down, while sellers are hoping prices stay where they are.

Beyond rising prices, interest rates also play a role in what people can buy.

Mehnert noted that a consumer’s buying power declines 11% for every 1% rise in interest rates.

“In Eagle, what (buyers) could afford at the start of the year … has probably changed,” Griffin said.

All those factors are moving some potential buyers and sellers to the sidelines of the market.

Griffin said people already in homes, many of whom are locked into interest rates in the 3% range, are looking at rates in the 6% range and the numbers don’t make sense.

A number of people, Griffin said, are saying to themselves “why would I sell if I don’t have to.”

In response to the changing market, real estate and mortgage brokers are getting more creative with financing. Adjustable rate morgages and other financing tactics are making something of a comeback.

“The market has changed,” Denton said. “Time will tell where we’re going.”

But even with those changes, Denton said there are still buyers looking to buy homes.

“People still want to come to the resorts,” he said.

Source: Vail Daily https://www.vaildaily.com/news/there-are-almost-no-homes-available-for-500000-or-less-in-vail-valley-real-estate-market

Cynthia Thrall