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IN THE FEWEST OF WORDS
Over the past four months, sellers have been bullish on their list prices and buyers have been bearish in their house hunting. As a result...
Property value has not been decreasing...list prices have been decreasing
and that should continue as inventory increases this spring/summer.
SO, WTF HAS BEEN GOING ON?
Often, a marketplace is most easily described as a buyer’s or seller’s market. When both sellers and buyers perceive the same market condition, transactions tend to come together more fluidly. When there is a disparity, they do not.
Over the last four months, buyers and the sellers are seeing two different perspectives… The seller’s mind sees the limited inventory and sufficient sales data to support their bullish value proposition. The buyer’s mind sees that values have increased rapidly over the past three years which causes some angst; inventory is not selling as swiftly as it was a year ago; and the condition of the property does not justify a bullish list price.
The result of the seller’s mindset: their home gets priced at the top end or above the applicable value range [because the seller is affluent, not motivated/not needing to sell quickly]. If the home is not special, it spends more time on the market and eventually the price gets reduced. And yet, a special, turn-key home will sell swiftly (< 21 days) at the upper end price [because there are enough buyers willing to buy the gems].
The result of the buyer’s mind set: the buyers see that what they get for the money is less impressive than it used to be. The buyers are selective, patient [because they are spending XX% more than they would have three years ago]; they interpret the current economic/political narrative as probable market uncertainty leading to weaker demand [see BTW below ]; they intend to buy something but they want to buy at or below the arguable market value [and often that price is impossible to attain as the seller need not due to affluenza].
BTW I do not believe the current tariff-induced economic outlook will cause weaker demand in the Vail Valley. If you want to hear more, please ask me about it.
Please be aware, none of this is to say that list prices have been egregiously bullish...just bullish… I am talking maybe 2-4% bullish …yet that is a lot of money in a town where the average sales price is $2.8MM
This year, buyers will succeed more often by negotiating through reasonable offers and the reasonable sellers will make the deal.
AT THE END OF THE DAY, the fact that most owners sell bullishly, inventory remains low, owners remain owners, and value continue to rise, are the very reasons that investing in the Vail Valley real estate marketplace continues to be a very smart long-term investment.
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