It looks like Eagle County’s superheated real estate market may be cooling a bit. That’s probably good news.
The most recent data from the Vail Board of Realtors shows that July transactions and dollar volume both declined by more than 25% from the same period in 2021. That would be worrisome if 2021 was anything like a normal year, but it wasn’t.
The current breather is also seeing a slight increase in homes available for sale.
Mike Budd, a broker with Berkshire Hathaway HomeServices Colorado Properties, is also a member of the Vail Board of Realtors. Looking at the most recent data, Budd said there are currently about 300 homes for sale in the local Multiple Listing Service. That’s roughly double the number seen several months ago, Budd said.
Alex Griffin is the vice president and managing broker of LIV Sotheby’s International Realty’s Vail Valley branch. Griffin likened the market of the past two years to a sugar buzz.
‘Coming back to Earth’
“My favorite thing to say is we’re coming back to Earth,” Griffin said, adding that the days of cash offers, multiple offers beyond the list price, no inspections and other land-rush tactics have largely subsided.
The job now of a broker is to manage expectations and bridge the gap between what sellers and buyers see in a home.
“Sellers are expecting a market from six months ago, while buyers are expecting a market six months from now,” Griffin said.
Matt Fitzgerald is the Eagle County market president of Slifer Smith & Frampton Real Estate. Fitzgerald said he’s seeing a possible return to levels seen in 2018 and 2019, both of which were good years.
Fitzgerald said there’s still a good bit of buyer activity. Because of where we live, “demand is still there,” Fitzgerald said. “We’re fortunate to live where we live.”
Fitzgerald said the current leveling-off in the real estate market provides his firm’s brokers with a chance to better explain the market to both buyers and sellers.
Steffen Mehnert is the Vail Valley team leader for Keller Williams Mountain properties. Mehnert said he believes the local real estate market is at the beginning of a significant shift.
“The record-setting is done,” Mehnert said. “That’s healthy for everyone.”
Mehnert said recent increases in mortgage interest rates put “some perspective” into the market.
Money’s still fairly cheap
Budd noted that current 30-year mortgage rates are just above 5% on average. That’s a big change from the past few years, when mortgage rates were around 3%. But, he added, historic mortgage rates have been around 8%.
Budd said lending practices are different today than they were in the last real estate boom in the mid-2000s.
“Money was easy to borrow back then,” Budd said, adding that when lenders got into trouble, they became more cautious. That means people tend to be better credit risks.
Mehnert said even those who are getting behind on their mortgages — a group that’s ticking up slightly — still have equity in their homes, meaning they can sell without banks getting involved.
“A lot of people are taking that equity and moving somewhere else, or retiring early,” Mehnert said.
And, Budd noted, prices for the most part are holding strong, with the exception of properties that have been over-ambitiously priced.
“We’re seeing some price drops, but those (units) were overpriced,” Budd said. “You need to do your homework and compare (prices).”