Is Vail Real Estate a Good Investment?

Dana Gumber  |  March 6, 2023

Is Vail Real Estate a Good Investment?

Investing in luxury real estate is almost always a safe bet, although recent market trends may cause some confusion. The idea of investing is not always financial, however. Brokers in the beautiful state of Colorado are primarily focused on the success of your monetary investment, but the right realty professional will be driven to invest in your future, your spirit, and your personal growth and development as a community member and loyal Colorado citizen. Vail, Colorado, homes are incredible vacation spots, year-round residencies, and desirable event spaces for all occasions.
Because of Vail’s strong and stable place in the real estate marketplace, its limited supply of luxury properties, lower tax rates, and spell-binding natural beauty, many financial experts and real estate professionals consider luxury homes in Vail, Colorado, to be a worthy and lucrative investment that strengthens your portfolio as well as your mountain spirit. A disclaimer: we are real estate brokers—not financial investment advisors. With our guidance, however, you can move forward with confidence in purchasing a luxury home you can be proud of.

Market context

Currently, the national real estate market favors the seller over the buyer. This is due to limited home supply and rising mortgage rates nationwide. Over the past summer of 2022, the Federal Reserve significantly upped interest rates on housing mortgages, and buyers have been more hesitant to invest in upscale property as a result. Many eager homebuyers and hungry investors are hoping for the real estate market to cool down or for the “bubble” to burst as supply struggles to meet consumer demand. However, high-interest rates are predicted to remain the norm for the next few years.
In Eagle County, the home of Vail, the market favors buyers more than the national market. New listings are up about 27%, and two other key metrics — median sales price and average sales price — are down 21% and 32% since 2021, respectively.
Zooming in even further, we can see why real estate experts remain optimistic about Vail. The city, along with Aspen and Whistler, forms the triumvirate of markets with the highest median sales prices for single-family homes. As of September 2022, the median sales price for single-family homes in Vail was $4.5 million (the smaller market for attached homes followed closely behind at $3.5 million). The following statistics are as of September 2022:
  • A median list price of $4.7 million
  • Inventory of 81 homes
  • Average of 45 days on the market
  • 10 new listings in September 2022
  • 12 sold listings in September 2022
As we can see, the market for Vail, Colorado, homes is robust in spite of national trends. Feeling less pressure than typical homeowners, sellers in Vail can list their property and wait for a capable buyer to emerge. On the other hand, luxury buyers in Vail tend to know what they want (and have the capital to buy it).
The main caveat in Vail is the relatively low inventory. Keeping up with every home on the market may be tricky for the buyer, especially when sellers make their luxury homes privately available. In a niche market like Vail, it genuinely pays to work with the best possible real estate agent.

Low property taxes

Compared to other states with upscale mansions and townhomes readily available, Colorado offers some of the lowest property taxes in the country. The main source of revenue in the upscale ski town is, of course, tourism. Many seek out the ski slopes and inclusive resorts located within the center of Vail. Local real estate agents will tell you that the thriving tourism industry and the prevalence of steady state taxes keep property taxes lower by comparison. The local economy also has a thriving healthcare industry thanks to Vail Health. Vail Health is one of the top destinations for orthopedics, sports medicine, and cancer care, among other specialties.
Not only is Vail’s economy a continuing success for its people, but it is also the first mountain community in the world to be certified by the Global Sustainable Tourism Council’s (GSTC) Destination Criteria. Long-term community planning, year-round career opportunities, and nature preservation keep Vail sustaining itself through local synergy and active care along with attention to its natural resources.

Short and long-term rentals

Bloomberg recently ranked Vail as the second most expensive city for Airbnb rentals, according to data collected by AirDNA. As many in the industry know, expanding your rental portfolio to include Airbnb listings is a lucrative, modern option for short and long-term renters. A destination town like Vail benefits greatly from tourism, fueled and supported by Airbnb rentals that offer homeowners a new way to earn income.
Investing in a luxury home in Vail, Colorado, opens up a new revenue stream. Numerous property owners rent out their mansions, townhomes, and apartments during the 10-month “high season” when visitors come to ski, snowboard, and shop. Rental rates increase in the winter and fall months but are consistent year-round. This steadily high volume of renters keeps property owners busy, and purchasing an upscale piece of Colorado for vacation and long-term renting is a worthwhile investment.

Property value

Many comparable housing markets are more volatile, with homeowners selling at a loss when things look rough. However, trends show that Vail owners hold their property rather than selling, even in a recession. The majority of properties are bought with cash, so debt stays at a minimum. Owners are also an affluent group of people with several other stable investments and financial foundations, so property tends to stay in the same hands for long periods of time.
Rent is not an owner’s only source of income. Luxury property appreciates in such a popular, gorgeous town, and when your property is not occupied by a paying tenant, you are free to enjoy it or lend it to family and friends. Property owners here love to come to visit, not only to inspect their property first-hand but to enjoy the surrounding natural beauty and recreational activities that fill the town of Vail with excitement and wonder. Value is either retained or on the rise in a thriving ski resort town like Vail, and buying a home in Colorado is a stable investment for anyone looking to gain wealth.

Find a realtor

The only sure way to know if luxury homes in Vail, Colorado, are a lucrative investment is to consult a professional. Luckily, Dana Gumber and her team are ready to give you keen insight and a knowledgeable advantage over other buyers. The Vail Luxe Group values its customers, providing exclusive, private listings straight to your inbox for eager buyers hoping to get ahead of the competition. Dana knows how to navigate any real estate climate, and the team will work tirelessly to find the perfect fit for you and your future tenants.
Make an appointment with Dana today to explore the available luxury properties in the Colorado area, and consider investing in upscale real estate for a profitable future!

*Header photo courtesy of Shutterstock

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