The growing number of high net-worth individuals nationwide is breathing new life the luxury real estate market, particularly in mountain resort areas such as Vail and beachside
communities in California. Markets like New York City have started to see a slight uptick in median price, but for now most positive market news is anecdotal. The increase in the number of wealthy Americans is real, however—according to HousingWire, the number of millionaires in the US grew by 9% in 2010, bringing the total just shy of the pre-recession total of 9.2 million. Wealth always brings investment, and a survey by the Institute for Private Investors found that 30% of high net-worth individuals plan on investing in 2011.
Vacation homes are not just the province of the affluent in 2011, however. According to a survey conducted by the National Association of Realtors, vacation home prices fell more dramatically than residential home prices last year. In 2010, vacation home prices sunk by 11%, compared to 6% for primary homes. The continued price decline has made buying an attractive option for many who never considered owning a second home an option. Prospective buyers should expect to keep their bargain vacation home for a long while, as prices show no sign of increasing. However, renting remains a viable option to offset the cost of purchase.
A healthy tourism industry in the Rockies will provide Vail Valley resort communities with an economic cushion to offset recent market conditions. Job markets in Colorado remain strong comparatively, and the state was ranked #19 out of 50 in a recent US Bureau of Labor and Statistics report on 1-year job gains. Fourteen Colorado-based companies made the Inc. 500 list of fastest-growing private businesses this year, and Vail’s own Rocky Mountain Vacation Rentals was honored in the top 5000, along with Summit County-based Pinnacle Mountain Homes. Based on the magazine’s rankings, it is clear that the fastest-growing private companies in the Rocky Mountains are in the growing tourism and real estate industries. Vail Valley has the perfect storm for buyers—a growing economy and falling prices.