Eagle County in 2021 set another real estate sales record, hitting nearly $4.3 billion. Perhaps the bigger news is how many buyers paid cash for new homes.
The latest data from Land Title Guarantee Co. shows the the valley’s market set a number of milestones, including:
- $615 million in sales in Vail Village, the highest number for any area in the county
- 124 homes sales of $5 million or more
- 354 vacant land sales
- The average sale price in the county was $2.04 million
Of all the numbers, one that jumps out is the percentage of homes sold for cash: 42%. That’s a lot.
Ron Byrne, owner of Ron Byrne Associates Real Estate, has long worked in the high end of the market. Cash sales are fairly common in that part of the market. Byrne said many of those cash buyers for multi million-dollar homes finance those homes after purchase. That practice is starting to be more common at lower price points, in large part because the current market is so competitive.
The market is so competitive, in part, because so few homes end up in the Vail Board of Realtors Multiple Listing Service.
Not much out there
Steffan Mehnert, Team Leader for Keller Williams Mountain Properties, noted there were roughly 800 home listings when he arrived in the valley in February of 2020. After a remarkable market run in the second half of that year, there were only about 250 listings. As of now, there are fewer than 150 listings. The Vail Board of Realtors has about 800 members.
And, Mehnert added, about 100 of the listed homes are priced at $3 million or more.
The shortage of listings isn’t just in Eagle County, Mehnert noted, adding that the national home market is short at least 4 million units.
That competition for homes means cash is king. But where is that cash coming from?
Mehnert noted the country’s financial markets are on a 10-year run-up. That’s created a lot of new wealth. Other buyers are taking out home equity line of credit loans to make their purchases. Other firms are offering to loan buyers cash for a purchase, then financing the home once it’s changed hands.
Many of those firms have already run out of cash, Mehnert added.
In addition to the current competitive market, the Vail Valley’s built-in attractions add even more pressure on buyers.
That’s good news for sellers, of course. But, Mehnert said, “The days of first-time buyers using an FHA loan … are gone,” for first-time buyers. “It’s insane what’s happening,” he added.
Cash makes sales easy
For sellers, cash offers trump nearly anything else, Mehnert said.
“A seller will take the least amount of potential headaches,” he said, noting that it’s hard to argue with closing in 14 days without appraisals or inspections.
That’s why Eagle County’s “Bold Housing Moves” initiative includes helping qualified buyers with cash offers on homes. Town of Vail officials are talking about a similar effort as interest declines in the Vail InDEED program, largely due to rising prices.
While listings are lagging, deals are still being done.
“The conventional wisdom is that low inventory will yield fewer sales,” Berkshire Hathaway HomeServices Colorado Properties owner Michael Slevin said. But, he added, inventory in 2021 was far below levels seen in 2020, but deals were still completed. Many of those deals were done before a home landed in the Multiple Listing Service.
Slevin believes the valley is in for another strong year, due in large part to pent-up demand. That demand should remain strong due to inventory, even as interest rates are expected to creep up this year.
Depending on the neighborhood, “We’re still seeing properties come to market that are garnering 10 to 15 offers,” Slevin said.
But, he added, finding a way to get first-time buyers into the market is something the community “needs to have on the front burner.”