2022 Colorado real estate market report
A review of 2021 and a look at what's ahead for the new year
How does Eagle County set a record for dollar volume and (unit sales) in a historically low inventory environment? Demand and creativity.
According to the MLS, Eagle County residential sales hit an all-time high of $3.3B for 2021. The dollar volume almost speaks for itself. Inventory shortages coupled with unprecedented demand carried over from 2020 and continued to elevate prices – simple supply/demand economics.
Overall, in 2021, residential unit sales reported in the Vail MLS were down slightly (3%) and dollar volume for Eagle County was up 21%. This time one year ago there were 382 residential properties in the Vail MLS. Today it is 160 – that’s down 58%. From a real estate perspective, expect 2022 to look and feel a lot like 2020 and 2021. Demand should continue to exceed supply and prices are likely to rise, though perhaps not at the levels of the last two years.
Speculation that interest rates will rise in Q3 and Q4 of this year may put pressure on those looking to finance homes, culminating in some pressure on prices. But in an environment where cash purchases have become more of the norm, the impact might not be as significant as other markets around the country.
As we enter spring, expect the supply of homes to loosen and patient buyers should be rewarded with more homes from which to choose. We generally see a slight supply increase in January and February in the resort/luxury market areas with inventory starting to build in March through end of ski season (mid-April) down valley and again in the summer months valley wide.
There is good news for both sellers and buyers. Sellers understand there is a window to leverage the market and sell today, which is benefitting home buyers with more inventory. Buyers need to be prepared to act quickly, which is where working with an experienced local broker who can uncover off-market and coming to market opportunities. In addition, these brokers also understand the subtle nuances of putting together attractive offers for sellers, which will give buyers a leg up on the competition.
Kyle Denton, broker associate with Berkshire Hathaway HomeServices Colorado Properties and member of the Denton Advisory Group, shares insights on the luxury/resort market in the Vail Valley and what the year ahead means for buyers and sellers.
What it Means for Buyers
As we continue to see upward pressure on pricing, be prepared to act quickly if the right property presents itself. Having firsthand or real-time knowledge of new listings, being well educated on the different values in a specific neighborhood, presenting a solid offer, and putting together a well thought out negotiating strategy are just a few key factors in successfully purchasing that right property. It’s also important to note that the standard Colorado Real Estate Contracts just went through some significant changes effective January of this year, which will impact how offers are now written and potentially negotiated. This is something to which buyers and sellers will need to pay close attention. Partnering with an experienced real estate advisor could mean the difference between successfully purchasing the right property or not.
What it Means for Sellers
In addition to the Colorado Real Estate Contract updates and how they affect offers and negotiations, understanding the values, trends, and inventory levels for each specific neighborhood, along with a sound strategy for marketing, negotiating, and potentially dealing with multiple offers are key factors to optimizing the final sales price and general contractual terms. Determining the right timing on when to bring a property to market based on the location of a home and time of year are also key factors to ensuring a home receives the most showings and ultimately sells for the highest price.
Down Valley, Rick Messmer, managing broker with Berkshire Hathaway HomeServices Colorado Properties and member of the Eagle-based Messmer Group, notes that homeowners who were able to sell greatly improved their financial positions in most situations. Buyers who were able to purchase a property did so by outcompeting other buyers, and in some cases, up to 20 buyer groups, for a single home or townhome/condo. Overall, those who decided to both sell and buy in Eagle County typically bettered their positions.
What it Means for Buyers
Teaming up with an experienced real estate broker becomes even more important to assist buyers not only in the search, but also in the preparation of the offer to make it stand out above the masses and have it selected. Qualified local brokers have a network and market knowledge base that allows them to often learn of properties coming to market before they hit the MLS. This puts those buyers in a distinct advantage of being able to put in an offer ahead of the competition.
What it Means for Sellers
Don’t leave money on the table trying to go about the sale process on your own. Exposure to the masses with a pricing strategy that will attract the most attention will net sellers a lot more money than the commission paid to the listing broker. According to the National Association of Realtors, homeowners net 17% less when trying to sell their home on their own and it takes a lot longer due to the myriad of hurdles involved in closing a sale.
Eagle County is one of the most desirable places in the world to call home. Buyers who put forth the right strategy will continue to find homes. Sellers who price their home correctly will continue to reap the financial gains of owning in a high-demand region.
Michael Slevin is the President, Berkshire Hathaway HomeServices Colorado Properties.