Everyone wants a cabin in the woods

Publication: VailDaily.Com; Date: 01/24/2005

By Cliff Thompson

EAGLE COUNTY -To understand how hot the real estate market in Eagle County is you need only consider what happened to a new project Vail Resorts brought to market earlier this month.

The company received enough interest from potential buyers on Arrabelle - a new 67-unit luxury condo project in Lionshead scheduled for groundbreaking this spring - that it resorted to an auction to determine who would get to purchase the units.

More than 500 people bid on the project that has units priced from $3 million to $5 million.

That demand for real estate, which was evident throughout 2004, helped drive annual real estate sales to a new record of $2.25 billion. That's 133 percent of the existing record of $1.7 billion set in 2000 and 151 percent better than 2003's total.

December's sales totaled $280 million - also a one-month record - on 294 transactions, statistics show.

Must Have

Fueling the demand and increase in prices is a dwindling inventory of what's for sale.

"It's the classic supply-demand thing," said Led Gardner of Sonnenalp Real Estate. "Demand continues to increase while there is very little new supply."

The Vail Multi Listing Service, which, among other things, details what is for sale, has 611 residential properties on it, and that's about half of what has been typical in previous years.

"That's not a lot of inventory," said Michael Slevin of Prudential Gore Range Properties. "As a result, people are jumping on anything that comes on the market."

The average price of what sold in December - $952,539 - reflected that demand as well did the sale of numerous properties prices in excess of $4 million. Over 2004 the average sales price was $675,939.

Top Shelf Sales

Topping the list of sales in December was a $10.1 million sale of a 10,000 square-foot home in Bachelor Gulch, followed by a $8.5 million sale of a 9,500 square-foot home also in Bachelor Gulch.

Sales of properties priced at more than $4 million - there were 10 of them - totaled $57.39 million. But it's not just the high-end that's active, said Slevin.

"It's countywide," he said. "From first-time buyers to people looking to upgrade."

The market is generating its own momentum as prices escalate and allow sellers to become buyers.

"Folks are getting into the market and displacing others who are upgrading into new homes," said Slevin, adding that continued low interest rates have made purchasing easier, too.

"Buyers know it's a seller's market," added Gardner. "If they see a property they like, they need to go ahead and buy it or it will sell to someone else. It's a great time to sell property. It will command a price you couldn't have gotten a year ago."

The most active market segment was in entry-level homes - those priced at less than $500,000. A total of 145 transactions occurred in this market segment last month and the average selling price was just over $300,000.

2005 Strong Too

Based on the properties they're showing this month, both Slevin and Gardner said they expect the demand to continue strong through 2005.

"Showing activity is still very strong," Slevin said. "The problem we're running into is low inventory levels."

Raw land and commercial sales accounted for $56 million in sales in December and totaled $386.3 million for all of 2004.

The boom is occurring in the midst of a $1 billion renovation of Vail Village and Lionshead that will add nearly 1,000 new lodging units.

The sales spurt started in August 2003 after war and terrorism worries calmed