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VALUATION METRICS

THE LISTING PROCESS

Multi-million dollar purchase decisions require serious due diligence. What is the property worth? How does one understand the idiosyncratic elements of world class property ownership? What are the metrics that should be used for asset valuation? How can your property stand out so that buyers take notice? These and a multitude of other questions come to mind in what is sure to be a very important decision. As a data driven advisory and consulting service company, the principals of Vail Property Brokerage have spent more than two decades trying to understand the issues from a consumer demand and urban economic perspective. Reading analytics can be tedious but if you will take a careful look at the narrative and data, there is a wealth of information and insight buried within the pages of our web site. The intent here is to cast a wider net in our efforts to sell property for the most money possible, in the shortest period of time, with the least number of problems and hassles.

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Vail Property Brokerage is the Central Rockies only vacation home investment advisory company focusing on our client’s commitment of time and money which for most people are two of their most valuable resources. Our fiduciary responsibilities include teaching clients how to go about making a smart real estate deal while fostering a credible working partnership between the parties.

World class resort real estate has always been a capital appreciation investment asset class. The upside is dictated not so much by what you buy or how much is paid, but rather the successes or failures of Vail & Beaver Creek as playgrounds for the rich and not so famous.

The appreciation drivers are multi-faceted so think of these elements as a three legged stool.

1. Population demographics. One quarter of the US and most other WWII conflict nations have a baby boomer demographic who is now approaching retirement and/or the promise of more free time from the office. The Great Recession greatly disrupted the economy for more than five years and in combination with longer life spans has resulted in many of them needing or wanting to work for an additional 10 years while thinking about the day when they don’t have to.

2. Affluency of customer base. The top 10% of US households own about 70% of all the investible assets according to the Wall St Journal. Concentration of wealth will continue to erode the middle class widening an already considerable inequality gap. The New York Times projects that Top 10% US households will earn 90% of all future increases to income which means the rich will get richer which is unfortunate but true nevertheless. The key is to find asset classes that are of interest to these moneyed families which have always been Vail’s traditional customer base. There may be other places with this affluency profile but there aren’t any better. International visitation to Vail has tripled over the past 5 years as multi-nationals seek safe harbors for accumulated wealth. We expect this trend to accelerate in the years as evidenced by Mexican and South American Latinos coming in increasing numbers based upon capital preservation and family security concerns.

3. Ski company. If you want to know how a ski town is going to do; study the ski company. If they create more demand for their products, goods, and services in the context of a fixed supply market we all win. Vail Resorts is the best managed, most experienced, a Fortune 500 company and is arguably the most successful ski operating company in the world. Their success formula is based upon massive investments in infrastructure, urbanized amenities, a sense of community and the creation of a lifestyle where lift tickets are now just one a many other activities. After an almost three billion dollar private/public investment spree which started 2004, Vail has reinvented itself as the company’s crown jewel as proven by an international reputation which is only going to grow in the years ahead.

After the Great Recession Vail’s historical rate of appreciation has now resumed. Prices surged 20%-25% during the summer of 2017 but have since flattened. Sellers reached for even more in 2018 but not without buyer resistance. No one knows what the future will bring but when the capital markets fall which will happen sooner or later, Vail real estate pricing will not suffer but rather there will be intermittent periods of illiquidity which is the most significant downside issue.

Vail Property Brokerage remains dedicated to achieving a dual benefit outcome which means experiences and memories that will last a lifetime in combination with diversified financial performance. This goal and objective is generated via proprietary data driven methodologies that took us decades to develop with more than 250 families reporting more fun and making more money than they ever expected.

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