EAGLE COUNTY — The decline in real estate transactions this year isn’t just an Eagle County phenomenon.
According to a Land Title Guarantee report, real estate sales have dipped in all seven counties in a mountain resort region. The decline in those counties — Eagle, Garfield, Grand, Pitkin, Routt, San Miguel and Summit — dipped from 1% to 21% in the second quarter of 2019.
Along with that decline, though, has come an increase in the median price of transactions in most of those counties.
In Eagle County, the median transaction price increased by 4.5%. Routt County’s median transaction price increased by nearly 14%. San Miguel County’s median transaction price declined by more than 15%.
Sales of new units have been on the rise across the region. Grand County posted the biggest increase in the second quarter — nearly 20% from the same period in 2018. Eagle County showed a nearly 10.4% increase from 2018. The smallest increase was in Pitkin County — which has limited available land for construction — at 3.3%.
Running out of space
Land availability is a problem throughout Colorado’s ski resort region. Oni Bolduc, a broker with Berkshire Hathaway HomeServices Colorado Properties, is also working these days in Park City, Utah. Bolduc said available land is one of the differences he sees between the Vail Valley and Park City markets.
With more available land, there’s a good bit of new product hitting the market, Bolduc said. And new product can mean more affordable pricing.
“That’s accentuating people’s interest,” he said.
There’s also a broader variety of product. Bolduc said he’s trying to help clients who want a Vail single-family home priced at less than $2 million. “There’s just not great opportunity there,” Bolduc said.
With the fluctuations in the market for expensive homes, most transactions in the region are priced at $1 million or less. That’s why local residents make up the majority of transactions throughout the region.
Looking at ski resort area purchases since 2013, locals have accounted for between 49% and 58% of transactions in most of the markets tracked by Land Title.
The exceptions are Telluride, with 53% of purchases made by out-of-state residents, and Summit County, where 43% of purchases are from Front Range buyers. Around Purgatory Resort near Durango, nearly 80% of purchases are made by local residents.
Historically good spot
While transactions have been wavering this year, Bolduc said he believes the market remains in a historically good place.
“People are concerned about new high marks in the market,” Bolduc said. But, he added, the previous highs were set a decade ago.
Charting the market’s appreciation over the past 20 years or so shows an annual appreciation rate of about 5.5%. That includes a stable market in the early 2000s, followed by a quick increase and equally quick decline between 2008 and 2011. A slow rise has followed the market’s recent bottom in 2010 and 2011.
Bolduc said the industry standard of a healthy market is appreciation between 3% and 6% per year.
“We’re right where we should be,” Bolduc said. And, it seems, much of the region is in roughly the same place.