I'm in Vail, Colorado, which is in the midst of a massive, $2 billion make-over to try to make it a year-round destination. Cranes and construction are everywhere. Aspen seems to get most of the summer tourist business, and Vail wants a piece of it. The two towns have about as much affection for each other as the Crips and Bloods.
The average home in Vail is $1.1 million, and half the homes here are second homes. You can tell. When you go for a stroll at night, most of the mansions don't have their lights on. It's a little odd. Being in paradise and yet alone. It's also kind of nice.
Apparently, the second home market here remains strong, immune to the meltdown elsewhere. When you're in this wealth stratosphere, you don't usually finance a second home. You pay cash. There aren't a lot of "for sale" signs. It will be interesting to see if demand remains strong once all the new development brings new supply into the market.
But here's the irony. Colorado residents, on average, are better educated and make better wages: yet the state is above average in foreclosures. Lawrence Yun, the senior economist for the National Association of Realtors told me that puzzles him. Until he found a possible cause: in Colorado, mortgage brokers need no certification. You could decide here today, "I'm going to sell mortgages!" and that would be it. He says what we're seeing in America isn't so much a housing crisis, as a mortgage lending crisis, and that, at most, we may see an extra 200,000 foreclosed houses come into a market of 4 million homes for sale. That's 5%. That doesn't sound so bad. I hope he's right.
Vail is facing one part of the housing issue--affordability. There are more jobs than workers here. Most of the employees I've met at the hotels and restaurants are foreign workers on visas, presumably all bunking up together in employee housing. With the population here expected to grow and age, this is a problem that won't be resolved easily.
I will be anxious to see how Vail looks once its makeover is complete. While Aspen is still very much like the mining town it was, Vail appears to be going for more of a European Alpine Village look. But most of the foreign tourists here these days are not from Europe, but from South America. Who knew?
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