Vail, Beaver Creek and Bachelor Gulch real estate, just like every luxury brand, is searching for its legs as we move toward the spring season. Whether Maybach or Marc Jacobs... Polo or Patek Philippe... Chanel or Château Lafitte... luxury brands around the world are experiencing a pause after many years of strong sales. The current times are certainly different than what we have experienced for the past twenty years... what might this mean to you?

How did 2008 turn out?

One almost has to divide 2008 into two separate periods... that prior to September and the months following. Leading up to the 4th quarter, sales of high-end properties continued to be strong, and in many pricing categories, were actually ahead of the record-setting pace of 2007. Yet this changed dramatically, as might be expected, the third week of September. The uncertainty that resulted from the unprecedented events of the final months of the year cast a pall over sales of luxury property world-wide, as buyers attempted to make sense of what was taking place and the impact it might have on their personal wealth. As a result, many who were poised to buy in the Vail Valley temporarily put their plans on hold.

Sales dollar volume ended 2008 down approximately 25% as compared with the all-time record of almost $3 billion established in 2007. At $2.2 billion in sales, we ended the year in similar fashion as in 2004. Yet in spite of the current concern about the market, look again at the number above... $2.2 billion in sales volume! Going back to 1989, we were excited about breaking the $400 million mark... and crossed the $1 billion threshold only as recently as 1997. Our sales volume has grown an average of 12.5% over the past twenty years, a strong testament to the desirability and attractiveness of our wonderful mountain community, and to the strength of the families who choose to own here.

How are things going now?

Following the financial debacle of late September, and the events which have unfolded since, we are just now beginning to decipher some noteworthy trends in our evolving real estate market.

Transactions are still occurring, albeit at a slower pace. Select, one-of-a-kind properties... those which come on the market once every ten-to-twenty years... have continued to sell. And those properties which are priced according to today's market, versus that of the past year or two, have also seen good activity.

The "disconnect" between buyers and sellers is shrinking, as many sellers are coming to the realization that the world really is different today than it was just six months ago. We are seeing listing price reductions of 10% - 20% on a regular basis, which in the high-end, often adds up to price reductions of $1 - $2 million. Of the seventeen properties listed at $1 million and more which have closed since December 1, 2008, the average sale-to-list has averaged 75%, with the median of 72%. As the ski season moves toward its close, and as sellers continue to acknowledge that pricing is key in today's market, we will continue to see aggressive price reductions. This bodes well for those looking to make acquisitions in our market.

Many buyers of substantial wealth are actively positioning themselves, planning to make a move when the time and opportunity are right. I have had several conversations since the first of the year with buyers who tell me (1) they have lost 30% - 40% - 50% of their net worth over the past year, yet notably; (2) they still want to buy in the Vail Valley. In many cases, these individuals have a long history of ownership in our community. Based on their personal experience, they recognize the many benefits... lifestyle, family, financial and otherwise, of buying in our market during uncertain times such as these. These are especially ringing endorsements for our market, and bode well for our continued success well into the future.

What does this mean to you?

A slowed market, though in our case far from weak, is often rich in opportunity. If you are a buyer, this may be the best chance to pick up a bargain (in Vail terms!) in many years, and for many years to come. You'll still pay millions for a new home on Forest Road, in Strawberry Park or on Daybreak Ridge, though in many cases, fewer millions than in recent years. The time is right to make offers... aggressive offers. You might be pleasantly surprised!

If you are a seller, the days of "testing the market" on pricing are long gone. Recognize that things really are different, assess whether this is the time for you to sell, and work closely with your broker to strategically position yourself price-wise against your competitors. Attractive, one-of-a-kind properties that are priced for today's world will sell. If you have owned for more than five years, and in some cases less, you will still very likely come out ahead at the closing table... something that investors in most other arenas can only dream about. Real estate in the Vail Valley has consistently proved to be a sound asset in challenging times, and as you have seen, a worthy addition to your investment portfolio.

What does the future hold?

In spite of the current economic conditions, the fundamentals of Vail Valley real estate remain sound. Three things that have driven our market over the years will never change... (1) the beauty of our mountains... the quality of our world-class skiing and other recreational opportunities... and the desirabily of our mountain lifestyle; (2) the limited number of opportunities to own in the Vail Valley, given the finite amount of land on which to build, and; (3) the dream of so many to be here.

Moving into 2009, there remains uncertainty as to how the market will play out in the short term. Yet those with a history in the Vail Valley know that, over the long term, premium brands such as Vail and Beaver Creek will be the first to bounce back, and are planning accordingly. They recognize that the current pause in our market will provide one of the best buying opportunities of the past several years. And based on their past experience, they are confident that this will be looked back upon as a time when astute buyers made wise and profitable real estate acquisitions. It comes back to the old "80/20" rule... the first 20% in will look very savvy, and the other 80% will look just a little bit late.

I welcome the opportunity to help you be one of the 20%.

Eagle County Sales Trends
1987 – 2008*


Sales Dollar Volume

1987 $251,000,000
1988 $310,000,000 23.5%
1989 $425,000,000 37.1%
1990 $407,000,000 ( 4.2%)
1991 $436,000,000 7.1%
1992 $499,000,000 14.5%
1993 $686,000,000 37.5%
1994 $797,000,000 16.2%
1995 $819,000,000 2.8%
1996 $939,000,000 14.7%
1997 $1,279,000,000 36.2%
1998 $1,335,186,800 4.4%
1999 $1,534,764,122 15.0%
2000 $1,704,885,500 11.1%
2001 $1,402,691,100 (17.7%)
2002 $1,502,259,801 7.1%
2003 $1,471,498,700 ( 2.1%)
2004 $2,225,840,000 51.3%
2005 $2,800,249,502 25.8%
2006 $2,754,171,600 ( 1.7%)
2007 $2,960,497,200 7.5%
2008 $2,234,919,100 (24.5%)

Sales Volume has grown an average of 7.2% over the past ten years, and 12.5% over the past twenty years.

Average Transaction

1987 $189,291
1988 $177,447 (6.3%)
1989 $189,817 7.0%
1990 $206,494 8.8%
1991 $225,907 9.4%
1992 $240,366 6.4%
1993 $257,411 7.1%
1994 $273,695 6.3%
1995 $408,479 49.3%
1996 $377,108 (7.7%)
1997 $452,103 19.9%
1998 $455,074 0.7%
1999 $493,018 8.3%
2000 $638,056 29.4%
2001 $630,990 (1.1%)
2002 $643,642 2%
2003 $566,615 (12%)
2004 $675,931 19.3%
2005 $696,060 2.9%
2006 $884,164 27.0%
2007 $1,101,375 24.6%
2008 $1,391,606 26.4%

The Average Transaction Value has grown an average of 20.4% over the past five years, 12.7% per year over the past ten years, 10.8% over the past twenty years.

Sources: Data Research Associates, Breckenridge, Colorado and Land Title Guarantee/Vail. All information is deemed accurate, though not guaranteed.