Vail Valley real estate market headed for another record year

After Eagle County set a new record for real estate sales in 2020, many people thought there couldn’t be two record-breaking years in a row. That may just happen.

Through the first six months of this year, real estate sales volume in Eagle County stood at nearly $1.8 billion, according to the latest data from Land Title Guarantee Company. That revenue was generated through 1,352 transactions.

Both those numbers far surpass the first six months of 2020, when the local real estate market was virtually shut down during the year’s second quarter.

But the current half-year figures are also far ahead of the pre-pandemic year of 2019, when the market finished the year with more than $2.2 billion in dollar volume.

What’s going on?

This is happening in a time of low inventory and rising prices. What’s behind the continued surge in sales?

Steffen Mehnert, the Vail Valley team leader for Keller Williams Mountain Properties said the answer, for him, starts with one fact: “People are flush with cash,” Mehnert said. “Probably a third of the offers we’re getting is all cash.”

Slifer Smith & Frampton Real Estate Eagle County President Matt Fitzgerald said part of the continued activity is buyers being prepared to act when the right home comes along.

“Our brokers have educated their buyer clientele to meet with lenders in advance (when needed),” Fitzgerald said.

In the market’s upper reaches, buyers often don’t need mortgages and are ready to buy the right home.

Fitzgerald said his company’s data show July had a lot of activity in the higher end of the market. There have been 40 sales of $5 million so far this year, matching the full-year figure from 2019.

Barbara Scrivens, a broker with LIV Sotheby’s International Realty, said there’s also the fact that Eagle County remains a desirable place to live.

“People have discovered they can work remotely,” Scrivens said. Those with the option to live in either a metropolitan area or Vail, or both, are doing just that.

“People are realizing they can be just as productive, and they can have two homes,” Scrivens said.

Sales to out-of-state buyers so far this year account for 32% of all transactions. Sales to locals, long more than half of the market, have slipped to 46% of all transactions.

Buying lots of lots

Vacant land sales are also on the rise.

There have been 184 sales of vacant land through the first half of this year. Those sales make up more than $71 million of the county’s dollar volume.

Fitzgerald said he’s seen a good number of transactions for building lots in the upper valley. Sales are “robust” in Cordillera, as well as Red Sky Ranch south of Wolcott. Those areas had been selling slowly, but that’s changed in the past year.

Fitzgerald said in the current market, buying a lot and building a home makes more sense than it has for the past several years.

Mehnert noted that Cordillera, which was “flush” with lots just a year ago, now has only a few parcels left.

Mehnert added that parcel sales are even starting to pick up in the long-moribund Brightwater area south of Gypsum. Some lots there that were priced at $50,000 or less just a year ago are now priced at $100,000 or more, he said.

Scrivens is currently representing the sellers of two lots, one in Cordillera and the last buildable lot in the Pilgrim Downs area just up Lake Creek Road.

Scrivens said she’s had interest from both potential homeowners and developers for the Cordillera lot.

“It’s great to see developers back in the game,” Scrivens said. The Pilgrim Downs lot, priced at $2.5 million, will almost certainly be sold to someone who builds a home there.

Fitzgerald noted that for a number of years, buying a lot and building on it made little sense compared to buying an existing unit. Given the current market, even with high construction costs and long waits, that move makes more sense.

“You have price appreciation and people aren’t able to find (homes) in Cordillera and Red Sky,” Fitzgerald said. “And it’s beautiful up there.”