LIV Sotheby’s International Realty has the listing for this home under construction in Eagle.
LivSotheby’s International Realty/courtesy image

It looks like the overheated Eagle County real estate market is cooling down a bit. This is probably good news.

The most recent data from the Vail Board of Realtors shows that July transactions and dollar volume were both down more than 25% from the same period in 2021. It would be worrying if 2021 looked like a normal year, but that was not the case.

The current break also sees a slight increase in homes available for sale.

Mike Budd, broker at Berkshire Hathaway HomeServices Colorado Properties, is also a member of the Vail Board of Realtors. Looking at the most recent data, Budd said there are currently around 300 homes for sale in the local multiple listings service. That’s roughly double the number seen several months ago, Budd said.

Alex Griffin is Vice President and Chief Broker of the Vail Valley branch of LIV Sotheby’s International Realty. Griffin compared the market of the past two years to a sugar buzz.

“Coming Back to Earth”

“My favorite thing to say is we’re coming back to Earth,” Griffin said, adding that the days of cash offers, multiple offers beyond list price, no inspections and other tactics land rush have largely disappeared.

A broker’s job now is to manage expectations and bridge the gap between what sellers and buyers see in a home.

“Sellers expect a market from six months ago, while buyers expect a market six months from now,” Griffin said.

Matt Fitzgerald is the Eagle County Market President of Slifer Smith & Frampton Real Estate. Fitzgerald said he saw a possible return to the levels seen in 2018 and 2019, both of which were good years.

Fitzgerald said there was still good buyer activity. Because of where we live, “the demand is always there,” Fitzgerald said. “We are lucky to live where we live.”

Fitzgerald said the current stabilization in the real estate market offers his firm’s brokers a chance to better explain the market to buyers and sellers.

Steffen Mehnert is the Vail Valley Team Leader for Keller Williams Mountain Properties. Mehnert said he believes the local real estate market is at the start of a significant shift.

“The record is made,” Mehnert said. “It’s healthy for everyone.”

Mehnert said recent increases in mortgage interest rates gave the market “some perspective.”

Money is still pretty cheap

Budd noted that current 30-year mortgage rates average just over 5%. That’s a big change from the past few years, when mortgage rates were around 3%. But, he added, historical mortgage rates have been around 8%.

Budd said lending practices are different today than they were during the last housing boom in the mid-2000s.

“Money was easy to borrow back then,” Budd said, adding that when lenders got into trouble, they became more cautious. This means that people tend to have better credit risks.

Mehnert said even those who are behind on their mortgages — a group that is slightly behind — still have equity in their homes, which means they can sell without the banks getting involved.

“A lot of people take that equity and move somewhere else, or retire early,” Mehnert said.

And, Budd noted, prices are holding up for the most part, except for properties that are priced too high.

“We’re seeing price drops, but these (units) were overpriced,” Budd said. “You have to do your homework and compare (prices).”