EAGLE COUNTY — Area real estate brokers have been saying for some time now that the local market is “balanced.” But what does that really mean?
A look at some of the latest data from the Vail Board of Realtors provides some insight. Here are a few factors:
In August of this year, a home that sold had spent an average of 110 days on the market. That’s an average, though. Some homes — particularly those priced at $500,000 or less, moved from listing to closing more quickly. Homes in the higher end of the market — $3 million or more — can take some time to sell.
“But I don’t think there’s anything we can do at a local level to ensure a stable market.”Crissy RumfordVail Board of Realtors board of directors chair-elect
Crissy Rumford, the chair-elect on the Vail Board of Realtors board of directors, said time on the market is also driven by available inventory. As the days on the market figures have declined — the 2010 average was about 300 days for single family homes and duplexes — so has the available inventory. Looking again to 2010, the depth of the valley’s real estate collapse in the wake of the 2008 recession, there was also an average of 800 homes listed for sale.
“Inventory is better for buyers,” Rumford said, adding that tight supplies create better conditions for sellers.
There are areas of the valley where there isn’t much available on the market right now, and other areas where there’s a wealth of choice.
Kent Petersmeyer is the managing broker for the Colorado branch of the Cascade Team, a Seattle-based company. Petersmeyer said he spends a lot of time with first-time home buyers looking in the $300,000 to $425,000 range.
“It’s difficult to find a home a buyer really loves in that range,” Petersmeyer said.
On the other hand, a number of homes are available in Cordillera, with only a few sold per month. That’s more of a buyer’s market, he said.
That leads to another factor: available homes.
Looking at homes sold per month and homes available on the board’s Multiple Listing Service, there was a roughly 8.8-month supply of homes for sale in August.
That figure leans more toward a seller’s market, but Mark Bergman, the Vail Board of Realtors executive director, said a balanced market has roughly 12 months of inventory available for sale. The August number is still in line with that benchmark.
But the number of homes for sale in the valley has been declining since March.
The number of available homes also leads to a decline in affordability.
Rumford said the lack of inventory is affecting whether people can buy less than prices. Still, it’s harder for people to buy homes that fit into federal guidelines — spending no more than 30 percent of a family’s gross income on shelter and utilities.
But, Rumford said, the valley is in better shape than other areas, adding that businesses in the Aspen area are busing people to and from Dotsero.
The answer to a lack of inventory is construction, and that seems to have picked up, particularly in the western part of the valley.
Petersmeyer said there are homes under contract that haven’t broken ground yet in Aspen Ridge — part of Gypsum’s Buckhorn Valley neighborhood south of the Eagle County Regional Airport.
Another development in Gypsum, the Villas at Cotton Ranch, has delivered five homes, with another nine under contract. But those homes won’t be finished for some time.
“It’s good news that the volume of re-sales won’t satisfy demand,” Petersmeyer said. “There are people willing to wait six, nine or 12 months for a home.”
The market, on average, seems fairly balanced now, but there’s no real way to tell how long that balance may last.
A balanced market “is something we all want,” Rumford said “But I don’t think there’s anything we can do at a local level to ensure a stable market.”
There are multiple factors in the national and international economies that can affect local markets, Rumford said. Those include taxes, interest rates and unforeseen events.
Rumford said the Vail Board of Realtors, as part of the Colorado Association of Realtors, can mostly keep an eye on state-level legislation or ballot issues that can affect the real estate business. The state group keeps tabs on issues ranging from construction-defects legislation to a ballot issue that would change the state’s health insurance system.
It’s important to be up to date on those issues, and “how it would affect people living here and who may move here,” she said.
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, smiller@vaildaily.com and @scottnmiller.
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