January transactions almost 50% higher than in 2020
The new year is beginning much like last year ended — with real estate on a serious roll. The latest data from Land Title Guarantee Company covers only January. Looking at “dollar volume,” the value of all sales, there was a slight dip from the first month of 2020, but there were far more transactions: 172 in January compared to 118 during the same period in 2020. Transaction data from the first two months of 2020 will be an apples-to-apples comparison with sales data in 2021 since the COVID-19 pandemic didn’t shut down much of the economy until March. The market slumped badly in the second quarter of 2020, before rebounding to new transaction and sales records for the year.
Much of that activity was fueled by buyers from out of state relocating to Eagle County.
Didi Doolittle, Eagle County Sales Manager for Slifer Smith & Frampton Real Estate said many buyers are coming from traditional vacation-home markets including Florida and Texas. The demand for homes locally has turned the market into one that favors sellers.
‘So many more buyers’
The number of buyers has put pressure on the usual balance between new listings and homes under contract.
Doolittle said her firm has just about as many homes under contract as new listings, while Fitchett said his company has fewer listings than homes under contract right now. Fitchett noted that the current level of activity put some different wrinkles into the market.
For instance, it’s fairly common for potential buyers to put “escalator” clauses into contracts, meaning those buyers will agree to pay a certain amount over another legitimate offer. Fitchette said that can complicate a transaction, particularly if escalating a purchase pushes the price above a home’s assessed value. That can require a buyer to bring more cash to closing table.
Another complication of the current market is if a contract falls through. That can require a seller to relist a home. If that happens, it could come at a time when there traditionally are fewer buyers. Besides the potential complications for buyers and sellers, Fitchett said the increase in prices makes it hard to justify using a unit as a rental property.
Where does it end?
Aside from market fundamentals including still-favorable interest rates, Doolittle said the biggest fundamental is the valley itself.
“We’re still seeing visitors for all the same reasons we had before 2020,” she said. “It’s been amazing to see how locals and visitors adapt to the ‘new normal’ of how the mountain and restaurants are being operated. I don’t see the reasons people buy property changing.” And, while inventory is currently at historic lows — and will probably remain low as long as demand is so strong — Slaughter said she expects to see more homes for sale in the coming few months.
But, she added, “We still have more buyers than sellers.”