According to The Associated Press, real estate agents from New York to Las Vegas are reporting a rapid increase in purchases by foreigners in recent months.
The agents attribute the recent pick-up in activity to the decline in the U.S. dollar which in the last six months has tumbled some 9 to 11% against currencies like the Japanese yen, the European euro and the Canadian dollar. This has had the effect, of course, of making U.S. real estate a bargain for the foreign investor.
In New York, for example, buyers from Brazil -- where the Brazilian real is up 17% against the U.S. dollar -- Canada, France and the Netherlands have paid mostly cash for second homes ranging from $6 million to $15.5 million.
In the Vail Valley we have seen several luxury homes go under contract in the last several weeks -- which I've reported in prior posts. While no buyer information will be available until these tranactions close, I'll keep tracking them and will let you know whether any were bought by foreign investors.
A NEW SERVICE FOR YOU
Starting December 1st, my firm will be the first real estate brokerage in the Vail Valley to offer on-line "Live Chat" access to one of its brokers. I have signed on and will be participating in the rotation of on-line brokers.
This means that if you're surfing, say, Realtor.com, for our area and have some questions about one or more properties, you can just log on to our website at http://www.slifer.net/ and hit the "Live Chat" button. The on-duty broker will text/e-mail you back in less than a minute and will be available to answer your questions and send you any additional information you might like to see.
You can make the chat session as quick or detailed, as anonymous or identified as you choose. You'll be the one who'll control the session.
Remember, it starts next Tuesday, December 1st and, of course, you can cut right to the chase, cut out the Realtor.com middle-man, and do your searching and chatting directly at http://www.slifer.net/.
This means that if you're surfing, say, Realtor.com, for our area and have some questions about one or more properties, you can just log on to our website at http://www.slifer.net/ and hit the "Live Chat" button. The on-duty broker will text/e-mail you back in less than a minute and will be available to answer your questions and send you any additional information you might like to see.
You can make the chat session as quick or detailed, as anonymous or identified as you choose. You'll be the one who'll control the session.
Remember, it starts next Tuesday, December 1st and, of course, you can cut right to the chase, cut out the Realtor.com middle-man, and do your searching and chatting directly at http://www.slifer.net/.
RECENT ACTIVITY: NATIONAL and LOCAL
NATIONAL (from the National Association of Realtors):
1. Existing home sales in October rose 10.1%, the highest level of activity since February 2007.
2. Total housing inventory fell 3.7% to 3.5 million existing homes -- a 7-month supply.
3. Single family home sales rose 9.7% ... 21% above October 2008's performance.
4. Condo/Co-op sales rose 13.2% ...40% above October 2008's rate.
5. U.S. home prices rose for the 5th straight month. Although 3rd Quarter prices are still down from 2008, the trend seems to be improving ... they were down 8.9% from last year compared to the 2nd Quarter when they were down almost 15% and the 1st Quarter of 2009 when they were down 19%. (Source: S&P/Case-Shiller)
LOCAL:
Homes listed for $3+ million placed under contract since October 1st:
1. Vail: Arrabelle Condo #284 ... $6,395,000 list
2. Vail: 5142 Grouse Lane ... $5,650,000 list
3. Vail: Landmark Condo #51 ... $3,120,000 list
4. Beaver Creek: 463 Borders ... $21,975,000 list
5. Mountain Star: 114 Blue Flax ... $4,500,000 list
6. Bachelor Gulch: Quartermoon TH#7 ... $3,995,000 list
7. Bachelor Gulch: 3365 Daybreak Ridge ... $13,995,000 list
8. Lake Creek: 1266 Pilgrim Drive ... $3,750,000 list
Contact me for particulars, pictures, etc.
1. Existing home sales in October rose 10.1%, the highest level of activity since February 2007.
2. Total housing inventory fell 3.7% to 3.5 million existing homes -- a 7-month supply.
3. Single family home sales rose 9.7% ... 21% above October 2008's performance.
4. Condo/Co-op sales rose 13.2% ...40% above October 2008's rate.
5. U.S. home prices rose for the 5th straight month. Although 3rd Quarter prices are still down from 2008, the trend seems to be improving ... they were down 8.9% from last year compared to the 2nd Quarter when they were down almost 15% and the 1st Quarter of 2009 when they were down 19%. (Source: S&P/Case-Shiller)
LOCAL:
Homes listed for $3+ million placed under contract since October 1st:
1. Vail: Arrabelle Condo #284 ... $6,395,000 list
2. Vail: 5142 Grouse Lane ... $5,650,000 list
3. Vail: Landmark Condo #51 ... $3,120,000 list
4. Beaver Creek: 463 Borders ... $21,975,000 list
5. Mountain Star: 114 Blue Flax ... $4,500,000 list
6. Bachelor Gulch: Quartermoon TH#7 ... $3,995,000 list
7. Bachelor Gulch: 3365 Daybreak Ridge ... $13,995,000 list
8. Lake Creek: 1266 Pilgrim Drive ... $3,750,000 list
Contact me for particulars, pictures, etc.
PRE-SEASON PRICE REDUCTIONS
What I am seeing as I read the broker hot-sheets these past 2-3 weeks are sellers lowering their prices (many already reduced) in anticipation of the start of the holiday season. I suspect each wants to be the property that stands out from the competition and attracts the buyer.
When I look at these last-minute, pre-season price reductions coupled with the 3rd quarter real estate activity numbers I posted earlier this week (which speak for themselves), it makes me think that any, even slightly rational offer from a buyer will be taken seriously.
When I look at these last-minute, pre-season price reductions coupled with the 3rd quarter real estate activity numbers I posted earlier this week (which speak for themselves), it makes me think that any, even slightly rational offer from a buyer will be taken seriously.
COMPARATIVE PERFORMANCE DATA for the VAIL VALLEY
Real estate activity in the Vail Valley for the 3rd quarter of 2009 and 2008.
NOTE: figures are as of September 30th:
2009: # of ACTIVE LISTINGS 2,301
789 single family homes
803 condos
369 land
361 other
2008: # of ACTIVE LISTINGS 2,257
660 single family homes
855 condos
419 land
323 other
2009: Total # of UNITS SOLD 560
212 single family homes
223 condos
39 land
86 other
2008: Total # of UNITS SOLD 985
336 single family homes
512 condos
64 land
73 other
2009: Total $ Volume Sold $578.2 million
$281.9 million - sf homes
$230.2 million - condos
$17.1 million - land
$49.0 million - other
2008: Total $ Volume Sold $1,460.2 million
$559.3 million - sf homes
$719.9 million - condos
$37.7 million - land
$143.1 million - other
Source: Western Mountain Resort Alliance/Rocky Mountain Resort Alliance
NOTE: figures are as of September 30th:
2009: # of ACTIVE LISTINGS 2,301
789 single family homes
803 condos
369 land
361 other
2008: # of ACTIVE LISTINGS 2,257
660 single family homes
855 condos
419 land
323 other
2009: Total # of UNITS SOLD 560
212 single family homes
223 condos
39 land
86 other
2008: Total # of UNITS SOLD 985
336 single family homes
512 condos
64 land
73 other
2009: Total $ Volume Sold $578.2 million
$281.9 million - sf homes
$230.2 million - condos
$17.1 million - land
$49.0 million - other
2008: Total $ Volume Sold $1,460.2 million
$559.3 million - sf homes
$719.9 million - condos
$37.7 million - land
$143.1 million - other
Source: Western Mountain Resort Alliance/Rocky Mountain Resort Alliance
FORECASTING MORTGAGE INTEREST RATES
As the Federal Reserve Bank winds down its purchases of mortgage-backed securities -- which by March 2010 will total $1,250,000,000,000 (that's $1.25 Trillion) -- it will put upward pressure on mortgage rates. That's because, according to the folks at Maverick Lending Network in Vail, home loan rates are based on mortgage-backed securities, and the huge amount of purchases made by the Fed Bank has been helping to keep these prices high and home loan rates low.
When the Fed stops buying -- and the demand it created for mortgage-backed securities phases out -- prices on these securites can be expected to drop ... and home loan rates to rise.
The Fed has announced that they will not go beyond the $1.25 Trillion allocation, so this program to keep rates low should all be over with in a few months.
Home prices here in the Vail Valley have been showing signs of having bottomed out and now it looks like mortgage rates could be going up.
I'm getting a "time is of the essence" feeling.
When the Fed stops buying -- and the demand it created for mortgage-backed securities phases out -- prices on these securites can be expected to drop ... and home loan rates to rise.
The Fed has announced that they will not go beyond the $1.25 Trillion allocation, so this program to keep rates low should all be over with in a few months.
Home prices here in the Vail Valley have been showing signs of having bottomed out and now it looks like mortgage rates could be going up.
I'm getting a "time is of the essence" feeling.
READING THE NEW-CONSTRUCTION TEA LEAVES
I saw three pieces of good news yesterday:
1. a report from the Dow Jones Newswire that Toll Brothers, Inc., a big-time builder/developer, reported sharply improved results for its fourth quarter ending October 31st, with orders above the levels of 2007 and a cancellation rate in line with pre-downturn averages.
I find this interesting in light of Toll Brothers' decision to focus on the high-end of the market as opposed to many other builders who are focusing on building for the first-time buyer.
Toll Brothers' net signed contracts for the 4th quarter rose a strong 42% to 765 units, with an increase of 62% in dollar volume to $430.8 million. The figure beat the fiscal fourth quarter of 2007 -- yes 2007 a great year -- by 17% and 18%, respectively.
2. The Washington Business Journal reported that Atlanta-based Beazer Homes, another big builder/developer (with developments in South Florida among other areas), posted its first quarterly profit SINCE 2006 and said there are signs business is improving.
Beazer cited "historically high housing affordability" as one of the reasons buyers are coming back to their markets. Perception of value is always a big buyer-incentive regardless of where the buyer fits into the home-buying spectrum.
3. Back at home here in the Vail Valley, I am encouraged to see that a 2-acre homesite on Holden Road in Beaver Creek, sold yesterday for more than $3 million. Land buyers are generally strategic buyers and this tells me that someone is taking the longer view of our local economy and feels confident enough in its future to buy a piece of land and either build something on it or, at least, land-bank it for a coming better day.
1. a report from the Dow Jones Newswire that Toll Brothers, Inc., a big-time builder/developer, reported sharply improved results for its fourth quarter ending October 31st, with orders above the levels of 2007 and a cancellation rate in line with pre-downturn averages.
I find this interesting in light of Toll Brothers' decision to focus on the high-end of the market as opposed to many other builders who are focusing on building for the first-time buyer.
Toll Brothers' net signed contracts for the 4th quarter rose a strong 42% to 765 units, with an increase of 62% in dollar volume to $430.8 million. The figure beat the fiscal fourth quarter of 2007 -- yes 2007 a great year -- by 17% and 18%, respectively.
2. The Washington Business Journal reported that Atlanta-based Beazer Homes, another big builder/developer (with developments in South Florida among other areas), posted its first quarterly profit SINCE 2006 and said there are signs business is improving.
Beazer cited "historically high housing affordability" as one of the reasons buyers are coming back to their markets. Perception of value is always a big buyer-incentive regardless of where the buyer fits into the home-buying spectrum.
3. Back at home here in the Vail Valley, I am encouraged to see that a 2-acre homesite on Holden Road in Beaver Creek, sold yesterday for more than $3 million. Land buyers are generally strategic buyers and this tells me that someone is taking the longer view of our local economy and feels confident enough in its future to buy a piece of land and either build something on it or, at least, land-bank it for a coming better day.
VAIL REAL ESTATE vs. THE DOW
My very talented colleague, Trevor Thelke of Land Title Guarantee Co., has created this marvelous graph. It tracks the correlation between the Dow Jones Average and the $ volume of real estate transactions in Eagle County (the region that includes the resorts of the Vail Valley).
Although the graph, at this point, ends with the collapse of the stock market in the fall of 2008, the correlation is evident over the years since tracking began in mid-1991. With the recovery of the Dow now exceeding 10,000 and on a strong trajectory, I'll leave to you the fun of mentally updating the chart and deducing what the future looks like for Vail Valley real estate.
Meanwhile, I'll ask Trevor if he can bring the chart up to present day ... and once I get it, I'll share it with you.
Although the graph, at this point, ends with the collapse of the stock market in the fall of 2008, the correlation is evident over the years since tracking began in mid-1991. With the recovery of the Dow now exceeding 10,000 and on a strong trajectory, I'll leave to you the fun of mentally updating the chart and deducing what the future looks like for Vail Valley real estate.
Meanwhile, I'll ask Trevor if he can bring the chart up to present day ... and once I get it, I'll share it with you.
P.S., if you'd like to see larger version of the chart, contact me and I'll get a copy to you right away.
SNOW IN THE FORECAST
The National Weather Service has issued a winter storm watch for our Colorado mountain region starting Thursday and continuing into Friday.
Almost a foot of snow is forecast over the next two days ... unless, of course, the storm stalls over the region. In that case, we could get much, much more.
C'mon snow gods!
Almost a foot of snow is forecast over the next two days ... unless, of course, the storm stalls over the region. In that case, we could get much, much more.
C'mon snow gods!
SALE OF ESTATE IN BACHELOR GULCH NOW CLOSED
In my post of November 3rd, I alerted you that this 10,000+ square foot home in Bachelor Gulch (a resort community on Beaver Creek ski mountain) had been placed under contract after receivng multiple offers in quick succession.
The sale closed yesterday ... at $11,250,000, equal to $1,051 per square foot. The sale price represents a discount of 19% from list price and is, to me, further evidence that perceived value brings buyers, even at the high-end of the market.
LOCAL AIRPORT/LODGING BOOKINGS ARE UP
According to our local newspaper, advance flight bookings at the Vail Valley's Eagle County Airport are up 4.5% so far for the winter.
An extension of the airport's runway was recently completed and the airport has added to its roster a Delta Airlines Detroit flight on Saturdays and also another day of service to Miami.
In related news, The Vail Valley Partnership reported lodging bookings made online through vailonsale.com and visitvailvalley.com are up 20 percent over this time last year.
An extension of the airport's runway was recently completed and the airport has added to its roster a Delta Airlines Detroit flight on Saturdays and also another day of service to Miami.
In related news, The Vail Valley Partnership reported lodging bookings made online through vailonsale.com and visitvailvalley.com are up 20 percent over this time last year.
CONFIRMATION FROM SOUTH FLORIDA?
As those of you who know me are aware, I am watching the real estate market n Southwest Florida like a hawk.
The market in Southwest Florida was one of the first go in the tank and it's showing signs of maybe being one of the first to emerge from said tank. Historically, the real estate market in the Vail Valley has been one of the LAST to go in the tank and among the FIRST to emerge. So, I keep watching Florida for a turn-around that could signal or confirm a turn-around in the Vail markets.
The news from Southwest Florida is improving. According to the Fort Myers Florida Weekly, Stock Development reports sales for the first 3 quarters of 2009 from its new developments in Fort Myers and Punta Gorda at $70 million, boosted by a surge in sales totaling more than $10.5 million during the usually slow months of August and September. Their average sales price increased 12% from $355,000 in the 1st quarter of the year to $396,000 in September.
Best of all they sold twice as any homes in the first 10 days of October as they did in the entire month in 2008.
This encouraging news parallels, though on a different scale, the recent performances I have reported for September and October in our Vail Valley market.
A recent report in Newsweek reports that Baby-Boomers are getting back into the second home market, which should help venues like South Florida and resorts like ours in the Vail Valley.
The market in Southwest Florida was one of the first go in the tank and it's showing signs of maybe being one of the first to emerge from said tank. Historically, the real estate market in the Vail Valley has been one of the LAST to go in the tank and among the FIRST to emerge. So, I keep watching Florida for a turn-around that could signal or confirm a turn-around in the Vail markets.
The news from Southwest Florida is improving. According to the Fort Myers Florida Weekly, Stock Development reports sales for the first 3 quarters of 2009 from its new developments in Fort Myers and Punta Gorda at $70 million, boosted by a surge in sales totaling more than $10.5 million during the usually slow months of August and September. Their average sales price increased 12% from $355,000 in the 1st quarter of the year to $396,000 in September.
Best of all they sold twice as any homes in the first 10 days of October as they did in the entire month in 2008.
This encouraging news parallels, though on a different scale, the recent performances I have reported for September and October in our Vail Valley market.
A recent report in Newsweek reports that Baby-Boomers are getting back into the second home market, which should help venues like South Florida and resorts like ours in the Vail Valley.
NEW WRITTEN BUSINESS for OCTOBER
Last month, the value of real estate placed under contract by the brokers of my firm --Slifer, Smith & Frampton Real Estate -- in the area which includes the resorts of Vail, Beaver Creek, Bachelor Gulch, Arrowhead and Cordillera was $54,223,500 (actually $69,478,700 when taking into account those transactions in which the Company's brokers had both sides of the transaction).
Compare this performance to October 2008, when we wrote $21,383,000 in new business ($25,700,000 for both sides), and you might agree with us that things are looking up.
Interesting to note, too, that activity was strongest in the $1 to $3 million range.
Here is the breakdown…
Number of Deals by Price Point:
$0 - $275,000 – 6
$275,000 - $500,000 – 3
$500,000 - $1 million – 7
$1 million - $3 million – 15
Over $3 million – 2
Deals by Area:
Vail/Lionshead = 8
Avon = 1
Beaver Creek = 5
Bachelor Gulch = 2
Arrowhead = 1
Edwards = 9
Cordillera = 5
Eagle = 2
Contact me for a more detailed breakdown. You can reach me through my website - www.UpscaleVail.com or via email at cmiskell@slifer.net.
Compare this performance to October 2008, when we wrote $21,383,000 in new business ($25,700,000 for both sides), and you might agree with us that things are looking up.
Interesting to note, too, that activity was strongest in the $1 to $3 million range.
Here is the breakdown…
Number of Deals by Price Point:
$0 - $275,000 – 6
$275,000 - $500,000 – 3
$500,000 - $1 million – 7
$1 million - $3 million – 15
Over $3 million – 2
Deals by Area:
Vail/Lionshead = 8
Avon = 1
Beaver Creek = 5
Bachelor Gulch = 2
Arrowhead = 1
Edwards = 9
Cordillera = 5
Eagle = 2
Contact me for a more detailed breakdown. You can reach me through my website - www.UpscaleVail.com or via email at cmiskell@slifer.net.
SIGNS OF LIFE IN THE HIGH-END MARKET!
In the last 10 days buyers have put under contract two major listings in the Vail Valley:
- a 10,000 square foot, 7-bedroom, slope-side home in Bachelor Gulch listed at $13,995,000;
Both homes had made reductions from their original listing prices and the lower asking prices attracted buyers. In fact, in the case of the Bachelor Gulch home, the seller received a cluster of offers following the price reduction ... imagine, multiple offers in these challenging times!
Keep in mind that these two contracts follow the purchase -- just a couple of months ago -- of a $21 million listing just across the Valley from Beaver Creek, in the community of Mountain Star.
- a 10,000 square foot, 7-bedroom, slope-side home in Bachelor Gulch listed at $13,995,000;- a 15,000 square foot, 7-bedroom estate in Beaver Creek listed at $21,975,000.
Both homes had made reductions from their original listing prices and the lower asking prices attracted buyers. In fact, in the case of the Bachelor Gulch home, the seller received a cluster of offers following the price reduction ... imagine, multiple offers in these challenging times!
Keep in mind that these two contracts follow the purchase -- just a couple of months ago -- of a $21 million listing just across the Valley from Beaver Creek, in the community of Mountain Star.
PENDING HOME SALES WAY UP!
It's the longest streak since measurement began in 2001.
The National Association of Realtors announced today that pending home sales rose again -- a whopping 6.1% in September -- marking eight consecutive monthly gains, the longest streak since 2001.
Added to the good news was the fact that economists were expecting the index to FALL 0.1%. If you have to be wrong by 6% it's nice to miss it on the up side.
Nationally, pending home sale activity is now 21.2% higher than it was a year ago.
Regionally, the index in the West -- i.e., our area -- jumped 10.2%, outperforming the Midwest, South, and Northeast regions. Moreover the Western region index is up 23.7% from a year ago.
Buyers need to get busy ... I suspect the window of opportunity for bargain hunters could start closing as inventories decline and activity continues to accelerate.
The National Association of Realtors announced today that pending home sales rose again -- a whopping 6.1% in September -- marking eight consecutive monthly gains, the longest streak since 2001.
Added to the good news was the fact that economists were expecting the index to FALL 0.1%. If you have to be wrong by 6% it's nice to miss it on the up side.
Nationally, pending home sale activity is now 21.2% higher than it was a year ago.
Regionally, the index in the West -- i.e., our area -- jumped 10.2%, outperforming the Midwest, South, and Northeast regions. Moreover the Western region index is up 23.7% from a year ago.
Buyers need to get busy ... I suspect the window of opportunity for bargain hunters could start closing as inventories decline and activity continues to accelerate.
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