Vail Custom Homes Sales Hot – Others Stall

Vail Colorado has everything a family could want in a hometown. There’s a lot of land out there, clean alpine air, and plenty of new houses waiting on buyers…problem is, rates have pushed the “Average Joe” out of the equation.

The National Association of Home Builders said “U.S. homebuilder optimism plummeted to its lowest confidence level in more than 14 years this month, as buyers canceled sales contracts and investors continued their exit from housing.” The robust sales of just one year ago are slowing now in all areas of the country, mostly due to a rise in interest rates and over-inflated home prices.

Sentiment among custom home buyers in the Vail, Colorado area is mixed. Strong sales continue in the custom home market in Vail Valley where high-end homes still sell every day. Vail custom home builder, J.P. Sunderland, has custom projects stacked "back to back", while other Vail builders who specialize in smaller low-end houses and condos are getting hold orders and cancellations.

"In Vail, and in other parts of the Colorado, there is an ongoing concern about where the housing market is going," said NAHB Chief Economist David Seiders. The luxury market in Vail however is still quite strong in the wake of the current financial strains on other investments. Custom homes starts account for about 12% of the total homes sold in Vail Valley last year.

The Dow Jones U.S. Home Construction index on Tuesday fell to a two-year low of 547.84 following the recent NAHB report. They suspect the negative buyer and builder sentiment is largely based on concern over interest rate policy of the Federal Reserve, which last month raised its target rate a 17th consecutive time since 2004. The vast majority of buyers out there are weary of yet another rise in the interest rates and its effect on home loans. A one point rise can mean thousands in increased mortgage payments so it seems average homebuyers are waiting for rates to level off, or drop again before signing on the bottom line.

Vail Construction News

Vail Colorado custom homes sales are looking very strong next to the sale of average cookie cutter homes. One Vail custom home builder is reporting record orders.

(NEWSWIRE) August 8, 2006 -- It looks as though the real estate boom of the last three years has hit a fork in the road. In Vail Colorado, and in other areas of Colorado, sales in May were down nearly 16 percent compared to last year.

However, in some areas of Colorado, homeowners are doing just fine. Down-valley in Garfield County, where Carbondale, Glenwood Springs, and Rifle are located, sales last month jumped 39 percent.

New custom home starts are way up in Vail, Colorado according to recent surveys. One area general contractor, J.P Sunderland, www.VailCustomHomeBuilder.com is one of the few Vail area contractors reporting strong future orders. It seems higher-end custom homes are still highly sought after, while ordinary homes and low-end condo sales are stalling. The silver cloud for investors is the "high-end" real estate market in Vail.

There is a $1 billion real estate development planned for an old mining area on the southwest side of Vail Mountain, between the old towns of Red Cliff and Minturn. Custom home builders are ready to build as soon as they get the okay. These high-end homes will have elevations around 10,500 feet; some opponents say that's far too high for people to own a home. Health risks are especially hazardous to visitors coming from up to Vail from sea level.

A physician consulted by the Vail Daily seemed to think that the thin air alone shouldn't kill this billion dollar real estate vision. He said, "25 percent of visitors arriving for a Colorado mountain vacation get altitude sickness during their first few days. A handful of them will be so sick they will want to stay at home."

The physician, Chip Woodland, said people acclimate to less oxygen after one or two weeks, and can then function nearly as well as they can at sea level. However, it can take six to eight weeks to fully acclimate. Imagine needing to lay down for a few month's when you first move there.

What the Vail area newspaper failed to report, however, is that medical studies have shown that problems become more frequent at higher elevations. For example, people going to elevations of 5,000 feet have fewer problems than those going to 8,000 feet. The usual benchmark for more serious problems is 9,000 feet, again the new Vail construction project is scheduled to build at 10,500 feet.

The billion dollar construction project is also being criticized for the impact to Vail Valley wildlife. Some 1,150 custom homes are proposed for about 4,500 acres of land. "The impact to elk for the entire project is significantly understated," said Perry Will, a Colorado Division of Wildlife manager.

The developer or the Vail project, Ginn Co., is considering doing what none before him has done, which is to build a wildlife overpass across Highway 24, which goes through the project, to help expedite movement of elk and other wildlife species. Wildlife lovers are pleased with the idea.

For more details, contact Custom Homes by SunderInc (www.SunderInc.com).

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