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Vail Property Brokerage
    • Jan 16
    • Greg Strahan
      Greg Strahan
    Latest news from VPB

    SUMMER 2020 SETS AN ALL TIME RECORD

    • Greg Strahan     40 Years' Experience. One Billion Dollars Completed Transactions. Hundreds of Happy Families.

    Let’s start with the biggest story of 2020.  Four hundred thirty (430) families purchased 1.2 billion dollars of real estate last summer at an average selling price of $2.7 million.  This surge in demand was completely unexpected after COVID-19 shut down the country with Vail Resorts closing all 34 ski areas mid- March with less than 48 hour notice.  Air travel came to an abrupt stop with TSA reporting less than 4% passenger traffic passing through airport security.  Travel and Leisure is heavily dependent on destination guests which led us to believe that resort real estate was dead in the water, because what family is going to buy a seven digit occasional use home without seeing it in person?  The pandemic immediately forced us to prepare for another economic disruption which came on the heels of the Great Financial Crisis ten years later.  Based on experience we knew what could happen making us think here we go again but with the hope of a much quicker recovery.

    Those very dark days began to see twinkles of light in May when another completely unexpected trend began to emerge. The phone started ringing with buyers calling about Vail Valley real estate but for two very different reasons.  Fear of the virus in larger cities made social distancing intimidating and in combination with business America embracing remote working, our modern world is now forever changed.  Buyers who had traditionally been interested in spending 2-4 weeks a year in our jewel of the Rockies began thinking about spending months which was unusual.  This early adopter movement convinced many families that they could spend more time away from congested places in favor of better quality of life locations which unleashed a frenzy of activity that culminated in an all-time sales record for ski proximate homes in the Upper Valley and Beaver Creek adjacent neighborhoods. This newly discovered flexibility as to how people work and where they can live will be a game changer that has only just begun.  Demand for best of the best places near beaches, deserts, golf, islands or mountains is going to explode as families with more money than time seek lifestyle enhancement and portfolio diversification while remaining connected to the office.  

    Our predictions are speculative, but based upon data analyses and leading indicators the summer of 2020 pushed Eagle County volume to over three billion dollars for the first time ever convincing us that this was not an outlier event but rather a paradigm shift which by definition is rare and seldom occurs in one’s lifetime.  Having been born in 1952 I have only seen three: 1) women working, 2) blue to white collar employment, and 3) technology which includes the internet with increased connectivity around the world.  Paradigm shifts change the human experience with the pandemic’s most lasting impact being lifestyle and locational mobility.  The Vail Valley is already a winner in this race for higher quality living with our piece of paradise being the right place, at the right time, with the right environment that will let people live longer and better provided they have the financial wherewithal to be here. 

    As for 2021, increased pricing is almost a certainty as supported by data analytics, some of which can be found on page 2 of this newsletter or at www.vailpropertybrokerage.com which has just been updated with additional Financial Performance projections.  Next summer’s story will be the lack of inventory because 430 families buying 1.2 billion dollars of ski proximate homes left us with almost nothing on the market and fewer sellers willing to part with their beloved family legacy homes.  Having had more than a hundred phone conversations over the past six months most of these inquiries were curious and favored a wait and see attitude which at the time made complete sense.  These “on the fence” families chose to postpone any decisions until such time as the risk profile lessened but are now thinking about moving forward on the idea of a second home which differs from a vacation home with length of stay being the difference.  If in fact demand transitions from days to weeks or months, then size and privacy will become more important than proximity to the ski villages in smaller cramped spaces.  While this cautious approach made complete sense at the time, we worry that it will have been a drastic mistake.  Demand is going to soar over the next 3-5 years as remote working increases flexibility allowing affluent families the privilege of seeking out best of the best quality of life communities which will intensify competition where the only the wealthiest will prevail.  Stock market performance which has been driven by low interest rates and TINA (there is no alternative) in conjunction with the US Treasury printing $4 trillion of stimulus money with more on the way, makes capital market investing a gamble leaving world class resort real estate a smart portfolio hedge and lifestyle enhancement alternative.  Vail’s long term appreciation will continue based upon baby boomer demographics, US household formations, and a growing inequality wealth gap as the rich get richer, along with massive inter-generational transfers of wealth leaving us with a “have or have not” society.  

    All of this is a much longer story but regardless of timing and magnitude Vail Valley real estate seems to have almost no downside and is an idea worthy of serious consideration. Vaccines are being distributed, the new administration is committed to additional supports, and the FED is focused on liquidity and record low interest rates.  While these elements will all contribute towards an improving economy, they could become genies that escape from their lamps driving inflation and the national debt to unmanageable levels.

    As to the summer of 2021 we are expecting burst pricing of 10%-20% and are recommending buyers prioritize this issue before the next surge of demand arrives next summer.  Casual interest is just not going to make a Top 10% property purchase happen with lack of inventory being the real challenge; so buckle up because it’s going to be a bumpy ride.

    Should any of this ignite your interest to learn more about our very expensive and hard to understand marketplace, give us a call or send questions that will be answered based upon 27 years of Vail Valley experience, proprietary analytics, and a fiduciary commitment to your best interests with no hidden agendas or undisclosed conflicts of interest.

    Greg Strahan   Connie Kincaid-Strahan

    Read Full Newsletter

  • VAIL VALLEY REAL ESTATE NEWS

    • Greg Strahan     40 Years' Experience. One Billion Dollars Completed Transactions. Hundreds of Happy Families.
    Remote Working Changes the Real Estate World.

     

    As the holidays approach and COVID-19 continues to ravage the country, I thought some diversion appropriate. Colorado’s snowpack to date is 82% of average with 14 out of 31 lifts on Vail Mountain open and 53 of the 195 trails accessible.  Despite these less than robust numbers, my on-mountain experiences have been better than expected based on coverage, terrain, and overall snow quality conditions.  Vail Resorts is to be commended for installing a $20M snow making system during the summer of 2019, which opened up Mid-Vail for the first time connecting to Lionshead via miles of moderate speed catwalks with lots of skiing along the way.  While it will take a couple of feet to get all of our 5200 acres up and running, one storm can make the difference in getting more of the good times rolling along with Beaver Creek’s 1700 acres which is only 15 minutes away.

    While there have been a few bumps along the way due to above average temperatures and Vail Resorts’ new reservation system (which is getting better), I have been generally surprised by the fun factor in what looks like a winter wonderland at higher elevations.  Most of the front side terrain and Game Creek Bowl are now open with exception of Chairs 11 (Northwoods) and 10 (Highline) with groomed slopes that are perfect for high-speed cruising and some moguls for the more adventurous at heart.  There is snow in the forecast so don’t worry if you are coming for the holidays!  My meditative message to Mother Nature is GIDDY UP!

    As a community there has been a great deal of concern about the guest experience given the pandemic with activities and celebrations added for your vacationing enjoyment; visit www.DiscoverVail.com for more information.  COVID-19 protocols are in place to ensure the safety of your family and friends both on and off the slopes.  Masks in the ski villages are required, indoor dining has been reduced to 25% capacity, face coverings required while in line or strolling around town.  Restaurants, bars and music venues are suffering but still open with limited capacity which is inconvenient but appropriate for these very difficult times.  You can have fun outdoors in our Rocky Mountain playground. Perhaps try experiencing it in a slightly different way. There is much more to Vail and Beaver Creek than just skiing so get creative and try something new like snowshoeing. We’re here to help with ideas. We’ve lived here long enough to know the myriad ways of having fun in our beautiful Vail Valley.

    As to the real estate market 430 families have purchased more than $1.2 billion dollars of ski proximate properties since May, at an average selling price of $2.7M.  This unexpected buyer demand stripped away most of the inventory with very little left that is truly worth buying.  An extensive search of the neighborhoods we track produced only 11 active listings in the Beaver Creek ski village priced $1M-$3M three bedrooms or larger with 50 homes selling over the past 12 months, which means every single listing currently on the market could be sold five times over.  East to West Vail has only 18 properties available as compared to 88 prior 12 month solds of which only 24 traded for less than $2m with roughly the same supply vs. demand ratio.

    Vail Valley real estate is going to get more expensive in the years ahead which means NOW IS THE TIME to prioritize this issue before the next surge in buyer demand arrives which we believe will be next summer. If you talk to us now we’ll be able to do effective pre-planning work with you so when you are ready to buy and the inventory selection becomes stronger then you will be in a very advantageous position. And if you’re looking to sell, then our unique buyer brokerage skills will definitely help you on the sell side too.

    With the economy improving as additional government stimulus comes online and a full vaccination plan implementation several months away, Vail & Beaver Creek are the right places, at the right time, with the right outdoor environment for lifestyle enhancement and financial performance. BURST PRICING of 10%-20% is likely to happen in 2021 which means TIME IS OF THE ESSENCE to plan and hopefully be ready in advance of that potential increase or burst pricing phenomenon.

    Real estate is on fire across the country fueled by household creation, pent up demand, and decreases in mortgage interest rates lowering the cost of ownership by about 25%.  Vail is benefiting from this FED policy phenomena but with the more important story being the unbridled acceptance of remote working which is going to change destination resort real estate in profound ways, making our already expensive jewel of the Rockies that much more unaffordable.  Lifestyle enhancement, portfolio diversification and time with family and friends are the drivers. Give us a call for more information because paradigm shifts cannot be explained in short narratives where information is crucial to making smart decisions.

    Best regards from high up in the Rockies and hope you will come to the Vail Valley during ski season where the suns shines, the snow falls, and memories that will last a lifetime wait to be discovered.

    Give us a call at 970-476-8850 or schedule an in-person meeting on our calendar and put our claim of expertise to the test. Let us help you determine what to buy. There is no obligation and, even if we’re not the right fit for you, we promise it will be time well spent.

    Connie and Greg Strahan

    27 Years in the Vail Valley. One Billion Dollars Completed Transactions.
    Hundreds of Happy Families.

  • RESERVATIONS ARE REQUIRED FOR THE 2020/21 SEASON​

    • Greg Strahan     40 Years' Experience. One Billion Dollars Completed Transactions. Hundreds of Happy Families.

    Vail Resorts has a new reservation system for ski mountain access during the upcoming 2020-21 winter season.  THE RESERVATION HOTLINE OPENS NOVEMBER 6th AND CLOSES DECEMBER 8th.  IF YOU DO NOT MAKE YOUR RESERVATION DURING THAT TIME, YOU WILL LOSE YOUR RIGHT TO DO SO.  Only EPIC pass holders may reserve seven specific days in advance.  We recommend you book those MUST-HAVE ski days as soon as possible.  Availability during most of the season is likely except for those unusually high in demand weeks.  Take advantage of the priority system to ensure skiing during Christmas/New Years, President’s Day, Spring Break, and all other high visitation periods.

    If you would like to look at real estate while you are in Vail or Beaver Creek, please call us at 970-390-8850.

    Go to the Epic Pass website to learn more:
    https://www.epicpass.com/info/reservation-details.aspx

     

    Greg Strahan & Connie Kincaid-Strahan

     

  • IS VAIL VALLEY REAL ESTATE ON FIRE?

    • Greg Strahan     40 Years' Experience. One Billion Dollars Completed Transactions. Hundreds of Happy Families.

    Remote working has been around for decades but not without employers being concerned over the lack of supervision and non-participation in synergist group behavior.  While this technological advancement was destined to become industry standard over time, when CV-19 came on to the scene that evolution became a revolution with the virus a catalyst for immediate mainstream acceptance.   Remote working is here to stay and will forever change how people work and where they live as we move into the age of on-line everything.  So, let’s take a look at what this will mean for vacation home real estate.

     

    The pandemic produced the most violent downturn in history with destination travel front and center as the public shunned flying and the economy locked down.  Spring is typically our slowest time of year as snowpack melts and the weather unpredictable.  After the ski areas closed mid-March, we were certain that summer visitation was going to greatly affected, but during the month of May some very unusual activity began to emerge.  Vacation home use has always been measured in days given obligations at the office.  We were surprised when buyers from all across America began calling citing an increased tether to work which meant changing the use pattern from days to months which now may become a new norm.

     

    This unusual behavior and five months of insane demand has confirmed that people intend to work from higher quality of life places driving this flurry of interest.  Properties have been selling in weeks if not days while reducing inventory to almost non-existent levels. The Wall Street Journal proclaimed that mountain property is on fire, which based upon the last five months is probably true but for reasons more complex than just the pandemic.  As of May there have been 430 properties sold or under contract in the ski proximate neighborhoods we track culminating in an astounding $1.2 billion of dollar volume with an average selling price of $1.6M.  All of this happened during an excruciating high risk economic downturn which made no sense but happened, nevertheless.  Families started reaching out to us as social distancing took hold expressing an interest in the Vail Valley but with their timing being next year.  This hesitation made complete sense given a lessening risk profile along with the promise of vaccines and/or other effective therapeutics.

     

    Six months have gone by and based upon additional information and client input we have concluded that this summer’s frenzy was not an outlier/renegade event but rather an early adopter movement.  Remote working is changing the playing field with most decision makers enjoying a longer leash to the office.  If these early adopters represent only a fraction of this emerging trend, buyer demand for Vail Valley real estate will explode next year with significant implications.  Inventory will likely decrease as ownership reconsiders selling for the same reasons’ buyers are buying.  If demand does nothing more than repeat next summer that alone will drive prices 10% higher.  If demand multiplies by a factor of two or three then a 20% increase is likely.  While these prognostications might seem a bit fanciful data analysis confirms that real estate moves in stair step patterns and is not a linear progression asset.  The last burst happened Q3 2017 when prices exploded 20%-25% as the longest bull market run in history converged with record low rates of unemployment.  While our predictions are based on a completely different premise there is historical precedence for burst pricing.  We urgently recommend buyers take action as soon as possible with the biggest problem being a serious lack of inventory.

     

    If the idea of a Vail Valley home is on the radar screen, this matter must be prioritized with buyers becoming fully engaged because asking us to send you a ‘great deal via email’ is just not going to cut it.  It takes time, focus, patience and perseverance along with making a broker your new best friend if a Top 10% property is going to come your way.  If renting is the backup there are going to be problems with that strategy as well.  As owners begin to use their homes for extended increments during prime time winter and summer months rents will increase and availability curtailed.

     

    If you have questions or are interested in learning more about how our world class resort real estate works, please give us a call or reply via email.  As the only vacation home investment advisory firm in the Central Rockies and Eagle County’s only buyer brokerage company for more than 20 years we are committed to your best interest as client fiduciaries.  We will make every effort to exceed expectations with information that is factual, and data based which is what our advisory platform is all about.

     

    Best regards from high up in the Rocky Mountains where the fall colors are vivid hues of yellow, red and purple, and the weather delightful with winter right around the corner.

     

    Greg Strahan and Connie Kincaid-Strahan

    40 Years’ Experience.  One Billion Dollars Completed Transactions.  Hundreds of Happy Families.

    Lifestyle enhancement coordinators and real estate guides to the Vail Valley.

  • US ECONOMY & HOMES – VAIL, CO REAL ESTATE

    • Greg Strahan     40 Years' Experience. One Billion Dollars Completed Transactions. Hundreds of Happy Families.

    US Economy
    The biggest stock market comeback in modern history is defying all valuation methodologies in favor of the view that the pandemic will be over by this time next year so who cares about what is going on around the country.  3.3 million small businesses, 22% of all the firms in the US, have shut their doors since February as compared to 730,000 during the Great Recession.  Irrational Exuberance is now being mentioned in hushed tones as the only explanation for a pre-Covid stock indices making the capital markets look more like Las Vegas gambling than a real investor playing field.  There are no real connections to P&L, consumer confidence or unemployment which is probably closer to $30M with 20% of America’s workforce out of a job despite lower statistics to the contrary.  Expectations that the FED will do whatever it takes to keep the recovery going with $3T of printed money already approved.  Chairman Jerome Powell is prepared to go as high as $6T if necessary, which is a staggering sum of money when compared to total US debt of $22T and rising.  The DJIA fell 1862 points last week in response to the virus’ spread with more than half the country setting record high infection numbers.  Until vaccines or therapeutics are developed Covid 19 is not going away so get ready for two steps forward one step back until such time as one of these two solutions become available.

    US Residential
    The cost of housing has grown twice as fast as wage earner income with fewer homes on the market than in any year since 1982.  Demand for lower priced properties drove appreciation at twice the rate of high end neighborhoods.  Once the backbone of US wealth, housing has become a political, economic, and environmental catastrophe.  Renting has become even worse with costs increasing by 16% compared to wages at 5%.  After 2011 4M units under $800 a month have all but disappeared due to demolition, co-ops and condo conversions.  Half of all renters spend 30% of their salaries on rent; but for the poor that number is closer to 50%.  Minimum wage earners would have to work 127 hours a week to pay for a two bedroom rental.  In 1990 it took 18 months of medium salary to buy a house in 72 of the top 100 cities; today that number is just 25 which is a staggering 65% reduction.  The US is more than 10 million homes undersupplied as a result of the Great Recession with no solutions in sight.  So, giddy up and buy residential properties because increasing valuations are almost guaranteed based upon the national numbers but will depend on specific SMSA locations and economic activity.

    Vail Valley Market Overview
    Rumors abound that Eagle County’s housing market is red hot.  Currently there are 348 pending sales with May setting an all-time monthly record.  Covid 19 is changing all prior seasonal patterns with buyer activity very strong for what is typically the slowest month of the year.  Eagle County has averaged about 2400 transactions per year since 2017 producing $2.2 billion in annual volume.  That yearly average of 200 homes per month would seem to support May’s red hot status but it’s not that simple.  At an average price of about a million dollars, 348 sales translates into $350M which is only 15% of countywide volume.  July is the height of our inventory accumulation cycle with 682 homes currently on the market and if every home were to sell that’s $600M plus the under contract $320M for less than one billion dollars or roughly half of pre-Covid volume.  Is the local real estate market on fire?  Well sort of with most of the action happening at seven digit numbers.  Local demand is in the tank given 48% employment as reported by the Rocky Mountain Alliance which means the market is almost 100% driven by out of area buyers.  The pandemic has created unexpected demand at an unexpected time for city dwellers who want social distancing and family getaway properties.  Zoom has proven that not all workers have to be in the office which is going to be a game changer for how and where we work, changing the ‘must be on-site’ paradigm forever.  We are not seeing a massive exodus from urban areas to outlying communities but rather the realization that a second home can make real sense given on-line working and increased flexibility as to where people can or have to live.  Urban flight from NYC after 911 is being talked about but we just don’t see a change in primary residences, but rather an escape valve option for lifestyle enhancement in less congested lower hassle safe places.

    Best regards from our part of the world to yours where in the Rockies the colors glow against a background of towering peaks, crystal clear lakes, and views of an endless the horizon.  Fall is right around the corner and if you can figure out a safe way to come and visit; we promise you will not be disappointed.

    Greg Strahan and Connie Kincaid- Strahan
    Lifestyle enhancement coordinators and real estate guides to the Vail Valley.
    75 Years’ Combined Experience.  One Billion of Completed Transactions.  250+ Happy Families

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