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SUPPLY VS DEMAND

SKI PROXIMATE NEIGHBORHOOD COMMENTARY

East to West Vail, Lionshead, Vail Village, Beaver Creek and Breckenridge are significantly undersupplied, based upon supply vs. demand ratios as illustrated in the following table. VPB’s definition of a balanced market is “for any given inventory pool there is a superior vs. inferior half, compared to the overall whole”.

supply-graph

This premise assumes that only 50% of all for-sale properties are worth buying because who doesn’t want value if it is out there in the market and available. Statistically there should be twice as many Active listings as compared to past 12-month Solds translating into a 2.0 ratio, where supply is divided by recent quantifiable demand.

In 2018 buyer demand was capable of absorbing 40% to 98% of all available inventory which is well above the 50% balanced market definition. Seller asking prices were up 20%-25% during Q3 2017 and have since stabilized. With limited inventory and steady demand data analytics support continuing long-term price appreciation as illustrated in the Compounded Average Growth Rate graph (CAGR).

While most experts agree that magnitude and timing are almost impossible to predict, an educated guess is better than no guess at all and all modesty aside, VPB has proven to be a pretty good guesser. Data analyses, historical rates of appreciation and 40 years of industry experience leads us to believe that world class resort property makes financial sense, but this prediction is as much art as it is science. If the time has come for a blend of lifestyle, financial performance and portfolio diversification, take a closer look at Vail Valley real estate because as the old cliché goes “you can’t take it with you”.