ast spring, as the pandemic shuttered offices and altered life for everyone, real estate brokers across the mountain region braced for what they thought would be the worst market in years. Instead, with the increase in remote work opportunities and a new appreciation for pursuing a purposeful life, people who were already enamored with the idea of living in the mountains found 2020 the perfect time to realize that dream. They flocked to Colorado’s resort communities and made it the highest-grossing sales year in decades.
Despite the unpredictability and chaos of the last 15 months, resort towns across the state—from Telluride and Crested Butte to Vail, Breckenridge, and Winter Park—experienced a sharp rise in consumers looking to purchase their own slice of paradise. Even in the shoulder seasons of fall and spring, when the real estate market typically slows, the industry has prospered. Heading into the peak summer months of 2021, experts predict the numbers will continue to climb.
“I call it the Covid Effect,” said Aaron Shriner, VP and Managing Broker for LIV Sotheby’s International Realty’s Summit and Grand County offices.
“People are reconsidering where they want to live and raise their families,” said Dan Fitchett, VP and Managing Broker for LIV Sotheby’s International Realty’s Vail Valley offices. “But the virus alone didn’t cause this. Property sales in the mountain towns have been increasing for several years.” For example, the past three years the Vail Valley has seen a steady rise in total sales volume, with 2020 sales growing 50% compared to 2019, according to LIV Sotheby’s International Realty’s Micro Market Report. “The numbers were already strong in the resort markets, and the pandemic was just the impetus that pushed a lot more people to decide: now is the time.”
Access to technology, once a barrier for professionals who might have chosen a resort lifestyle, is no longer seen as an inhibitor to productivity. “Because of the pandemic, many industries learned how to operate their businesses telephonically and through technologies like Zoom,” explained Fitchett. “Those in a more mature age group who might’ve been resistant to utilizing those products before, are now accustomed to them, so there’s been a change in thinking. Personal contact is still important, but people have realized it can be done on an intermittent schedule.”
Many Americans are celebrating the fact that they are not chained to their offices. With the knowledge that their environment affects both physical and mental health, they have set their sights on the fresh air and blue skies of Colorado’s resort towns.
“Colorado is not getting any less popular,” said Peggy Raible, VP and Managing Broker for LIV Sotheby’s International Realty’s Telluride offices. “We’re attracting an array of both full and part-time residents.”
According to Move.org
According to Move.org
The number of potential home buyers snaking up I-70 has certainly increased the competition for housing in areas like Winter Park, Summit County, and the Vail Valley. The average cost of a home in Summit County grew by 15.5% in the first quarter of 2021 compared to 2020, and the Vail Valley’s total sales volume was up 80.4% in that same time frame.
According to Shriner, the biggest driver of Summit County vacation home sales still comes from residents living on Colorado’s front range. “Coming from out of state, we see a lot of Texans relocating here or purchasing a vacation home to get away from the heat and humidity,” he said. Summit County offers four incredible ski resorts, Lake Dillon with its full range of water sports, and the historic towns of Breckenridge and Frisco, with their picture-perfect main streets and abundance of restaurants and shops.
“The resort areas provide a stronger investment opportunity than most metro areas,” Shriner explained. In the past, many properties in the area were purchased primarily to generate investment income. Now, buyers are planning to live in the homes themselves, at least part time.
On the other side of Vail Pass is the Vail Valley, where residents and visitors alike take pride in the elegant lifestyle and upscale amenities the area offers. “We have a mature social infrastructure here that includes top-of-the-line healthcare with a full-service hospital, symphony orchestra, ballet company, and a performing arts center that brings in big-name celebrities,” said Fitchett, who has lived and worked in the valley for over 25 years.
Crested Butte, once known as a sleepy mountain town visited mostly by Coloradans, is in fact gaining more national recognition.
“Telluride is experiencing healthy growth and appreciation in all segments, and I think it is not only due to the pandemic but also to the growing awareness and appreciation for the town,” said Raible.
“Telluride is rich in scenery and in history. The community offers a one-of-a-kind authentic lifestyle and quality of life for buyers,” she said, adding that its rise in popularity can be partly attributed to the enhanced access routes to town. In addition to its own regional airport, Telluride is also served by the airport in Montrose, which provides non-stop flights from a variety of cities. “The ease of getting here is much better than it was five or ten years ago,” Raible said.
The real estate market in Telluride is also more active than ever before. “There has never been a better time to sell a property in Telluride. The buyer rate is high, and the absorption rate is high,” Raible said. Raible highly suggests that visitors who want to make Telluride a lifestyle rather than a vacation spot should align with a LIV Sotheby’s International Realty real estate professional who can help them scout the market.
Financial factors play a role, too. The equity markets are strong and interest rates are low, allowing buyers to qualify for larger loans. “It’s no surprise that mortgage volume—for both purchase and refinance loans—has reached ‘never-before-seen’ levels. FirstBank is processing hundreds of applications daily,” said Amanda Doebler, Assistant Vice President in FirstBank’s Mountains Market, which operates locations in Summit and Eagle counties.
“We’re experiencing this for a few reasons: one is that historically low interest rates are a significant factor in driving up demand; low rates are also incentivizing many homeowners to refinance to either save money or tap into their home’s equity, given rising property values. The other is the pandemic has created a large remote workforce, enabling many people to migrate from bigger cities to more spacious, outdoorsy locations. The mountain resort communities have proven to be an ideal destination for many cashed-up buyers, eager to get out of their urban homes.”
“With more folks relocating from neighboring cities and summer historically being our peak real estate season, we’re anticipating things will only intensify in an already record-breaking real estate market,” added Doebler.
Some consumers are primarily in the market for land, which is also selling at faster than normal rates. The number of land parcels sold in rural Crested Butte in Q1 of 2021 increased a phenomenal 371.4% compared to last year. And according to Fitchett, land in the Vail Valley, which is bordered by BLM and National Forests, is a scarcity. “Land that typically sits on the market for years is selling overnight for more than asking price,” confirmed Shriner, who works in Summit and Grand Counties. “It’s remarkable to watch.”
“The conventional wisdom was that it’s harder to sell vacant land in the winter months because people want to see it without snow. But that’s less and less the case,” agreed Walton, who also noted that the cost of building materials has gone up and general contractors are busier than ever—something to keep in mind if you’re planning to build new.
One downside to the resort real estate boom is the dearth of properties for potential buyers. Low inventory has affected much of the United States, driving up both competition and prices, especially in desirable resort areas. Potential sellers find themselves in a tricky spot, too. Many want to capitalize on this red-hot market, but they have nowhere to go.
One effect is the challenge of finding that dream property. With houses spending far fewer days on the market and some going under contract before they’ve even had photos taken, buyers need to be ready, said Fitchett. The best way to find out about upcoming properties is by engaging a full-time realtor who has a pulse on the market in the areas where you are searching.
Buyers might catch a slight break by searching in areas that still have space to grow, suggested Shriner. These include lesser-known towns near major ski havens or resorts that haven’t completely blossomed. “Winter Park is in the early stages of a resurgence,” he added. “Older properties there are being renovated or rebuilt.” But it’s hit or miss, as properties in the town of Winter Park are still experiencing a 20% to 25% price increase from the recent market boom. Buyers should keep in mind that it may not be possible to get everything they want in a house right now, especially if they’re hoping to be close to the ski resorts.
No matter what the reason is for moving to the mountains, whether it is from Colorado’s front range or out of state, everyone can agree that the best part of living in Colorado’s mountain resort communities is simply getting to wake up and feel like you are on vacation every day.