“People want a change in lifestyle,” said Dan Fitchett, President of Colorado Resort Markets at LIV Sotheby’s International Realty. “They’re looking at resort communities all over the country to gain a little more of the things they like—fresh air and more open spaces. With today’s technological advancements and buy-in from their companies, many people can now live anywhere they want. And they want to live in our mountain towns.”
LIV Sotheby’s International Realty’s Micro Market Reports for Colorado’s resort areas support that sentiment. The Vail Valley, for instance, had a banner year in 2020, hitting over $1.5 billion in total sales volume, and the projections for 2021 are expected to reach $2.5 billion in sales, according to Alex Griffin, Managing Broker for LIV Sotheby’s International Realty’s Vail Valley offices. While the overall U.S. housing market showed signs of normalizing in August, with more homes coming on the market and price growth slowing, those trends did not transfer to ski towns and desirable resort areas like Vail, Telluride, Summit County, Grand County and Crested Butte.
“People want a change in lifestyle,” said Dan Fitchett, President of Colorado Resort Markets at LIV Sotheby’s International Realty. “They’re looking at resort communities all over the country to gain a little more of the things they like—fresh air and more open spaces. With today’s technological advancements and buy-in from their companies, many people can now live anywhere they want. And they want to live in our mountain towns.”
LIV Sotheby’s International Realty’s Micro Market Reports for Colorado’s resort areas support that sentiment. The Vail Valley, for instance, had a banner year in 2020, hitting over $1.5 billion in total sales volume, and the projections for 2021 are expected to reach $2.5 billion in sales, according to Alex Griffin, Managing Broker for LIV Sotheby’s International Realty’s Vail Valley offices. While the overall U.S. housing market showed signs of normalizing in August, with more homes coming on the market and price growth slowing, those trends did not transfer to ski towns and desirable resort areas like Vail, Telluride, Summit County, Grand County and Crested Butte.
In the Vail Valley, there’s an over-demand and under-supply of housing, according to Griffin. “Anything and everything is going fast,” he said, explaining that single-family homes, condos, and land sales all continue to rise in the valley, including the town centers, outlying neighborhoods, and rural areas.
Resort towns located in more remote areas of the state also continue to experience impressive growth. Telluride, Colorado’s most remote ski town, saw a 101% increase in residential real estate sales across San Miguel County so far this year, and that’s compared to 2020, when sales records were broken across all regions. “At the very end of 2020, Telluride hit a new benchmark of $1 billion in annual sales,” said Peggy Raible, VP and Managing Broker for LIV Sotheby’s International Realty’s Telluride offices. “This year, we reached that same remarkable benchmark in early October.”
Years ago, the Crested Butte region was known more for its mining and ranching than its ski hills. Now, the small town is attracting transplants seeking a full-time mountain lifestyle instead of just a vacation getaway. “Here in the Gunnison Valley, we have a continued increase in demand and decrease in supply, and I see the trend going nowhere but up,” said Jaima Giles, Managing Broker for LIV Sotheby’s International Realty’s Crested Butte office.
As a result of policy changes implemented during the pandemic, 30% of Americans now work from home instead of in an office, according to Griffin. “If you can work remotely, why not pick a beautiful place to live where you can have an incredible work-life balance?”
Newcomers clearly agree, as evidenced by market trends across Colorado’s resort towns, where school enrollment is up and there is increased use of medical centers and community services, such as fire departments. “Mountain communities have evolved to where they now have strong, well-developed infrastructures,” said Fitchett. “There are community groups and sports leagues for kids as well as fine dining, concerts and other social activities similar to what people would experience in an urban setting.” These amenities are a big draw for new homeowners coming from Denver and the Front Range, or from out of state.
The vast majority of transplants are bringing their jobs with them. The state’s resort towns have technological capabilities and convenient access to large regional airports or I-70, where people can easily reach Denver and DIA. “We are seeing a lot of reverse commuting,” said Fitchett, who explained that people used to work in the cities and spend their time off in the mountains. Now, they’re living in the mountains and commuting to their traditional workplaces as needed.
With all the new residents pouring in, some are concerned about the stability of the infrastructure in resort communities and their capacity to support such growth. While larger employers are better able to lure professionals to fill jobs in health care and hospitality, it’s the smaller businesses that struggle to find and keep workers in the service industries like restaurants and retail stores.
In Crested Butte, there are a few major contributors bringing in new jobs, primarily in the health and hospitality industries, education, and businesses headquartered there, according to Giles. “These staffing opportunities provide many work options for locals, but oftentimes the salaries don’t correlate with the cost of living here. Since 2020, we have seen a marked decrease in affordable housing options for local workers, so our municipalities must now focus on community-based housing solutions.”
However, with an increasing number of U.S. homeowners currently renting out their home or some part of it, any change to current rental laws will have an impact. In Vail, Griffin said some HOAs are trying to ban short-term rentals from operating in specific neighborhoods. “If you take that option away, you’re going to lose buyers,” he said.
Telluride, too, voted to regulate short-term lodging licenses in the November 2021 election with a two-year moratorium on new licenses and an increase in fees to fund affordable housing. The past year-plus of the pandemic has exacerbated the need for affordable housing across San Miguel County due to several factors, including a hot real estate market and rising rental prices. But the Town of Telluride, Mountain Village and San Miguel County have historically prioritized regional workforce housing and continue to plan for more, according to Raible. San Miguel County now has approximately 1,250 properties deed-restricted for local occupancy with plans to bring the total number of units up to at least 1,337 within the next few years.
Rather than restricting licenses, Grand County took a different approach. Funds were set aside to subsidize investment properties, incentivizing property owners to offer long-term rentals instead of short-term, said Shriner. “The feedback from that program has been fantastic.”
Other efforts are also in the works, such as converting old hotels into hostels with a community kitchen and bunk rooms. “There’s one condominium development that went stagnant, so the municipality may turn it into workforce housing.” Another program incentivizes landowners to provide people living in RVs and converted vans a place to park. “People are getting creative,” Shriner said.
That lifestyle comes at a price. The average cost of homes in the mountains has soared, with properties in Grand County selling at an average increase of 21.5% this year compared to the same time period in 2020, and the average cost of a home in Summit County growing 22.5% over this time last year. While the price tags can be daunting and no one is predicting a fallout, Fitchett believes that the current rapid inflation in home prices won’t continue indefinitely. Rather, prices will continue to climb each year, but at a somewhat slower pace.
Despite these challenges, there are also new opportunities cropping up. In some areas, new land is being opened up for development and there is an economic renewal of sorts taking place, with investors buying older homes and either scrapping and rebuilding them or doing extensive remodeling. The benefit to this approach is that these properties are already zoned for residential development, there are no tap fees, and services are in place at the site.
And despite all the talk about low inventory, it’s standing inventory that has decreased in mountain resort towns while absorption rates have accelerated, according to Raible. “In other words, prior to 2020 buyers have been conditioned to longer days on market. Now that there is not a large selection online at any given time, there is high demand for the inventory that comes to market, and it’s absorbed or contracted very quickly.”
An example of this is the neighborhood of Cordillera outside of Vail. According to Griffin, this community had an oversupply of inventory for years, but they sold through their standing inventory very quickly during 2020. That same trend occurred in Telluride. “Anybody who wanted to sell a property here over the last ten years has already sold,” Raible said. “However, Mountain Village has some new developments on the horizon, so there are still new opportunities popping up.”
“There is still an influx of new listings,” echoed Shriner. “They are simply getting snapped up quickly, which is why hiring a knowledgeable real estate professional is so important.”
To further complicate things, investors are coming back into the markets after a hiatus. “They’re under the impression that they need to get in sooner rather than later, and are afraid that if they don’t buy now, they’ll never be in a position to do so,” said Giles.
For those looking to navigate this increasingly complex market, it has never been more important to align with a trusted advisor and real estate expert. “My advice to buyers is to be prepared if you’re passionate about owning a property in Crested Butte or any of the other resort areas,” Giles said. “Whether you are acquiring a loan or making a cash offer, be sure to have an understanding of what you can afford and be ready to act quickly.”
As for sellers, Raible recommends speaking with a LIV Sotheby’s International Realty expert who has the pulse on your resort area. “If you’ve outgrown your current home but aren’t sure where to go next, we can help you identify those next steps and guide you in the best way to achieve your goals.”
Historically, sales dip a bit heading into the winter months in some of Colorado’s resort towns, but there hasn’t been a shoulder season in any resort region since the pandemic hit. The LIV Sotheby’s International Realty professionals living and working in the resort communities predict that sales in the mountain markets will continue to thrive into winter and beyond.
