Story by Natasha Solo-Lyons of Business Insider
As Americans fled major cities in 2020, New York's and San Francisco's losses were the Rocky Mountains' gain.
Colorado emerged last summer as a draw for wealthy Americans and rootless millennials amid the pandemic, but it's the region's elite ski towns that stand at the center of a red-hot residential market.
High net worth individuals and other populations have been lured to high elevations from both coasts because of their natural beauty and plethora of outdoorsy activities that complement a newfound flexibility to work from home, according to the 2021 Luxury Outlook report from Sotheby's International Realty.
The flood of new residents has driven home values up, local brokers told Insider, and the pandemic's effects on the homebuyer psyche are expected to continue pushing them west for the next year, if not longer, according to Sotheby's. That means the icy cold ski slopes should stay scorching for a long time.
There's also a hidden reason for ski towns' big year in real estate: Despite the American west's wide-open appearances, there isn't much land to go around, which makes housing supply scarce and pushes prices to new peaks when there's increased demand.
Here's a look inside the boom times in Jackson Hole, Aspen, and Vail.
Unprecedented demand comes for Jackson Hole
In November 2019, Jackson, Wyoming, realtor Ted Dawson was preparing his team for what he was thought would be a slow year. (Buyers are usually reluctant to plonk down a ton of cash for properties in an election year when policies surrounding the tax implications of their purchases can change.) By February 2020, he was bracing for a nightmarish market slowdown as the coronavirus pandemic barreled down on the US.
Instead, Dawson told Insider, he got a real-estate super-surge.
The Jackson Hole market has been flooded with coastal transplants since the onset of the pandemic in March, Dawson said, and in June 2020, "the floodgates opened."
The Jackson Hole welcome sign at Teton Pass. TenleyThompson/Getty Images
The influx of residents stood in stark contrast to prior national events, which had the opposite effect, Dawson added. One of the leading real-estate brokers in Jackson, according to Real Trends, Dawson has weathered real-estate downturns brought on by September 11 and the 2008 financial crisis.
Data backs up the boom: The median price of single-family homes sold in Jackson Hole was $2.65 million in 2020, up a stunning 51% year-over-year, according to data from the Teton County Board of Realtors Multiple Listings Service. The area's average single-family home price — a metric that skews higher when there are several ultra-high-end sales — was $3.67 million, up 39.5% from 2019.
Buyers flooded into Jackson on what Dawson called a "panic basis." California residents in particular have been a large part of the influx, he added, an unexpected shift because Jackson Hole typically draws vacationing skiers from the eastern seaboard.
Grand Teton National Park, which borders Jackson. Chase Dekker Wild-Life Images/Getty Images
Jackson Hole's land use regulations around protected natural reserves make it difficult for builders to plan new developments easily, which results in limited inventory, Dawson said. Bordered by Grand Teton and Yellowstone National Parks, more than 97% of local land is publicly owned.
What that meant for Jackson Hole real estate was $1.6 billion in sales through the first three quarters of 2020, said Dawson, who added that's a huge number for such a small community. (Teton County is home to a population of only 20,000 or so.)
Dawson said his Century 21 brokerage recorded a 363% year-over-year increase in sales volume in Jackson Hole in 2020, and inventory is now down about 75% from its usual level.
Aspen sets a new price record
Another posh ski town, Aspen, Colorado, has also witnessed an influx of new residents since the onset of the pandemic. So many, in fact, that Aspen-area home sales topped $3 billion for the whole of 2020, a record high, according to The Aspen Times.
Steven Shane, an Aspen agent who ranks among Real Trends' top 20 agents nationwide, told Insider that despite agents' inability to show properties from March through May of 2020 due to coronavirus restrictions, the market performed at unprecedented levels.
Homeowners took advantage of what people were willing to pay to live in Aspen after the pandemic hit, said Shane, who has worked in Aspen for two decades. And buyers met sellers' high asks, which drove home prices up by around 30%.
"Sellers couldn't turn away from the opportunities," he said, describing a market in frenzy.
The median sale price for single-family homes sold in Aspen through 2020 was $9.25 million, according to Aspen's local Multiple Listings Service, while the median listing price for Aspen single-family homes was $9.99 million.
Aspen, Colorado. Shutterstock.co
Like Jackson Hole, Aspen has a finite amount of inventory, and Shane said the town's mountain boundaries, ski resorts, and abundant protected land add a lot of value to local property.
"We don't have developable land here," he said. "If you go to South Florida and someone develops a golf course with homes on it, there can be another development like that two miles down the road delivered a year later. We don't have that here."
Aspen's feeder markets are Los Angeles, New York, Miami, San Francisco, Chicago, Houston, and Dallas. Interested buyers hailing from these locales are typically wealthy. "The great majority of people that live here are never under financial duress," Shane said.
And looking to the year ahead, he doesn't expect much to change.
"I don't believe there will be any sort of major correction after a vaccine is distributed," Shane said. He expects that if people choose to go back to their home cities, they may maintain an Aspen residence as a second residence — and, if not, they can sell the property they bought for a profit.
Homebuyers vie for Vail
Aspen isn't the only Colorado town setting records.
Vail's Eagle County exceeded $3 billion in home sales for the first time ever in 2020, according to the The Aspen Times. A big number for a county home to about 55,000, of which about 5,500 live in Vail.
A draw for deep-pocketed skiers, the local average Vail home sold for $1.29 million in 2020, according to Vail's Multi-List Service. By the end of the year, home sales were up 24% from the year prior, according to the Vail Daily.
The last year has been a whirlwind of bidding wars and closings, according to Tye Stockton, who leads Vail's top real-estate team, per Real Trends.
The $57 million Vail property Stockton sold in August. Scott Cramer Photograph
Take the ground-breaking $57 million sale of two adjacent luxury homes to biotech entrepreneur Kevin Ness in August — which set a record for the area's most expensive real estate. Stockton represented Ness, who bought the 11-bedroom duplex on roughly 15,000 square feet at a staggering price that obliterated the ritzy ski town's previous real-estate record, almost doubling it. The previous record was set by a $28.7 million sale in 2017.
Vail's real-estate prospects didn't look so rosy when the market shut down last March due to coronavirus restrictions on showings and other activity. "For the first time in 10 years, my phone stopped ringing," Stockton said.
Since the market reopened in May, though, he said buyers have poured in — so much so that, last year, he sold a Vail property to Americans living in Paris for $24 million sight unseen, using 3D tours, videos, and a virtual reality experience of the home to allow them to experience it from abroad. He closed another sight-unseen deal for $6 million.
"It's a huge sellers' market," he added. "Such an imbalance, I've never seen it like this. ... "Everything that was desirable was scooped up, and inventory plummeted."
Vail, Colorado. Adventure_Photo
Because buyers who work in business don't need to live near their offices, Stockton said, they're making bids on homes as quickly as they can. Elite ski clubs reminiscent of country club communities have been a major draw, he added.
He is even conducting multiple showings of and fielding full-asking-price offers on properties on outskirts of town that had previously lingered on the market for a year, adding that demand for condominiums in Vail Village by buyers who want to live in the quaint town center spiked by the third and fourth quarters of 2020.
Buyer interest hasn't slowed down in 2021. But replicating last year's sales volume will be almost impossible because of the town's lack of inventory, Stockton said. There simply aren't enough houses to sell to new, eager buyers.
Given the area's limited buildable land supply, he expects the properties that are on the market to sell quickly and at premiums.
"Buyers need to be ready to move quickly," he said. "Be prepared to pay top dollar — and do it fast."