Vail Valley Real Estate Residential Inventory Levels

Any new clues about how the Vail Valley Real Estate Market is doing?  Do I see a recovery in the near future?  Like many real estate folks, I track the number of real estate listings in the Valley.  The graphs in this post illustrate current trends in the Valley.  Back in 2006 and 2007 when we were in a seller’s market, we typically had about 600-1000 residential listings on the market.  At 600 listings, we were seeing multiple bids on a property and often it sold for more than list price.

Toward the end of 2007, the pool of buyers started to shrink and the market began turning to a buyer’s market.  These graphs clearly show the increase in the supply of homes as demand diminished.  A key number we track is the number of month’s of unsold inventory we have available. The graph below shows that in the Vail Valley, a healthy market has about 10 months to a year’s worth of inventory.  In 2009, that skyrocketed to over 5 years worth of inventory.  So an average homeowner in the Vail Valley would have to list their home for over 5 years before it would sell.  Obviously this could not continue and, as you can see, we currently have about 20 months of inventory.  This is still double the historical average and too high. 

The good news is that we are seeing a trend toward fewer listings, particularly in listings over $1 million (see the graph below).  But is this real or not?  I think we are seeing more buyers entering the market because of historically low interest rates and the fabulous selection of homes.  However, seller’s are also pulling their homes off the market and renting them for the winter for income.  Still, the drop we are currently seeing in inventory is greater than in 2009.  It will be interesting to see how the next few months play out.  I think we have turned the corner but it will be a slow recovery.  I’d be interested in hearing what other people think .





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