Since 1991 the Upper Vail Valley has performed remarkably well in terms of a consistent and almost predictable 8% annual growth
rate of appreciation. The worst performing periods were 1997-2001 when CAGR approached its all time 3% low as capital was diverted
to the stock market's double digit returns until the 2000 tech crash, and the 9/11 terrorism/war years of 2001-2003. The resort
real estate speculation bubble emerged in 2004 with the market running wild at unsustainable growth rates until the good times
came to an end in 1st quarter 2008.
The solid blue line represents the actual data while the
dotted line (CAGR) is a linear representation of overall performance. The 2009 correction of -24% brought pricing back to its long
term average but at the cost of a 70% decrease in overall volume and transactional activity.
| Year | Avg.$/Sq Ft | % Year/Prior | CAGR |
| 1991 | 165 | N/A | N/A |
| 1992 | 178 | 8% | 3.81% |
| 1993 | 203 | 14% | 7.16% |
| 1994 | 230 | 13% | 8.70% |
| 1995 | 244 | 6% | 8.13% |
| 1996 | 253 | 4% | 7.38% |
| 1997 | 294 | 16% | 8.62% |
| 1998 | 297 | 1% | 7.64% |
| 1999 | 297 | 0% | 6.96% |
| 2000 | 335 | 13% | 7.34% |
| 2001 | 349 | 4% | 7.07% |
| 2002 | 378 | 8% | 7.16% |
| 2003 | 389 | 3% | 6.82% |
| 2004 | 495 | 27% | 8.17% |
| 2005 | 637 | 29% | 9.43% |
| 2006 | 742 | 17% | 9.86% |
| 2007 | 837 | 13% | 10.03% |
| 2008 | 975 | 16% | 10.38% |
| 2009 | 739 | -24% | 8.69% |
|
|
Starting 1st quarter 2008 the market entered a discernable period of de-acceleration although the presented data does not
reflect the fact that it is taking longer to sell property despite -24% price reductions. Eagle County will continue to
appreciate in the years ahead as a result of baby boomer demographics, customer base affluency, and an estimated $4
billion of market value investment. We do expect a 2-3 year market trough as prices stabilize between now and 2012. Over
the long run CAGR is likely to be more in the range of 5% as opposed to the 8% historic average based upon ongoing
partisan politics and economic problems both here and abroad; but this is purely conjecture on our part at the present
time.
|
| ADOM | Year |
| 289 | 1991 |
| 270 | 1992 |
| 236 | 1993 |
| 182 | 1994 |
| 181 | 1995 |
| 219 | 1996 |
| 253 | 1997 |
| 234 | 1998 |
| 194 | 1999 |
| 225 | 2000 |
| 229 | 2001 |
| 249 | 2002 |
| 206 | 2003 |
| 149 | 2004 |
| 125 | 2005 |
| 164 | 2006 |
| 252 | 2007 |
| 232 | 2008 |
| 214 | 2009 |
|
Please keep in mind that advice on Vail real estate is only as good as the person giving it. Our University of
Southern California (USC) undergraduate training in real estate finance and MBA focus on urban economics doesn't
necessarily make us experts, but in conjunction with our 30 years of industry experience and our many years in
the Vail Valley, we do feel qualified to interpret the presented data and to discuss how different rates of
appreciation affect Return on Down Payment calculations, especially the influences of real estate here in Vail.
