As we progress into 2012, what predictions are reasonable for the Aspen real estate market for the upcoming year and beyond? Historically, the health of the Aspen real estate market seems fairly closely tied to the health of the national economy.
As the national economy went into recession in 2007-2008, the Aspen real estate market and the Aspen economy followed suit. The national recession officially ended mid-2009 when the country started experiencing positive GNP growth again. About the same time, the Aspen economy and real estate market started to improve as well in terms of volume of sales and declining inventory. Despite the European debt crisis, the unrest in the Middle East and growing government budget deficits here in the United States, the Commerce Department reported that the U.S. economy grow at a 2.8% rate in the fourth quarter of 2011, the fastest pace in 18 months.
At the same time, the national unemployment rate has declined to 8.5% from a high of 9.8% in 2010. The DOW stock average is now above 13,000, a level not seen since May 2008. Some argue that this good news isnt sustainable, and they may be right, but the national economic trend seems to bode well for an improving Aspen real estate market. In 2009, the Pitkin County market hit bottom with about $1.1 billion in total sales, down significantly from 2006 and 2007 when the market experienced $2.6 and $2.5 billion in total sales respectively. Since 2009, the overall countywide market has improved modestly with total sales of about $1.26 of sales in both 2010 and 2011.
At the same time, the rest of the Roaring Fork Valley continues to suffer from slow sales volume, high inventory and record foreclosures. When you separate out the Aspen market from the rest of Pitkin County, another picture emerges. In 2009, there were 136 sales of Aspen condos and single family homes for a total volume of $536 million with an average transaction price of about $3.9 million. In 2010, there were 164 total condo and single family home sales totaling $612 million, a 14% increase over 2009, with an average transaction price of about $3.7 million, down about 5.2% from 2009. In 2011, the number of sales increase another 17.7% to 193 and total volume increased by 19.8% to $734 million. The average transaction value in 2011 was $3.8 million, a 1.8% increase over 2010.
As far as predicting the future, it appears that the Aspen real estate market, as distinct from the rest of Pitkin County and the Roaring Fork Valley, is showing signs of strengthening and perhaps even showing the very earliest stages of positive appreciation as indicated from the modest 1.8% increase in average transaction value from 2010 to 2011. As the national economy and stock market recover, it would be expected that the real estate market closest to the core of Aspen would show the strongest signs of recovery as the wealthiest buyers increase their rate of purchasing. It’s also reasonable to conclude that the rest of Pitkin County and the Roaring Fork Valley are likely to follow suit at some point. At the same time, a major hiccup in the international world or national economy could again derail the local real estate economy. However, with a better understanding of the current underlying market trends, Aspen buyers and sellers should be able to make more informed decisions on what’s likely to happen in the Aspen real estate market in the near future.
Tips for Sellers: Secrets of Getting the Best Deal When You Sell Why do some properties sell quickly and others seem to languish on the market forever? The answer is often a lack of knowledge of competitive properties and how a property fits into the overall market. When larger successful companies bring a product to market they spend an extensive amount of time and money on market research to determine how their product will likely fit into the market. From this research, they develop both marketing and pricing strategy. The process of selling a luxury home is essentially the same. A seller and their broker should thoroughly understand how their home fits into the market. If youre about to list your home for sale, you should ask your broker to take you on a tour of similar homes for sale to see how your property stacks up. Do you want your property to the next one sold or are you willing to wait an extensive amount of time for other properties to sell first before the market gets to yours? An understanding of the market of competitive properties will help you and your broker determine price and marketing strategy that should result in the best deal when you sell.
Important News from Each Aspen Submarket Downtown Core In February in the core, two properties closed valued over $2.0 million. Closings included 818 East Hyman for $2.3 million ($1,057 per SF); and Unit 5 at 411 S West End Street for$5.5 million ($1,453 per SF). West End During February there were no sales or properties that went under contract valued at $3.0 million or more. There are currently 13 active listings of properties priced over $3.0 million, down from 20 in October. East End In February, one property closed valued over $3.0 million in the East End submarket. The closing was 329 Park Avenue, a 4,994 SF home that sold for $4.0 million ($801 per SF). Red Mountain Red Mountain had no closings in February and only one property, 200 W Reds Road 6,428 SF home built in 1988, went under contract. There are currently 32 homes valued at $3.0 million or more actively on the market on Red Mountain ranging in price from $3.2 million to $22.5 million. Smuggler Mountain The Smuggler Mountain submarket saw no closings and one property, 537 Race Alley went under contract as a result of an auction during February. There are currently eight active listings of properties valued over $3.0 million in the Smuggler Mountain submarket. West Aspen The West Aspen submarket had on closing and three properties go under contract during the month of February. There are currently 71 active listings of properties valued over $3.0 million in the West Aspen submarket. McLain Flats / Starwood The McLain Flats / Starwood submarket saw no closings in February, but one property, 70 Larson Drive, a 7,940 SF home did go under contract. There are currently 21 active listings of properties valued over $3.0 million in the McLain Flats / Starwood submarket.
Changing Market Trends What You Need to Know Inventory of Aspen Luxury Homes Listed For Sale:
Inventory has been falling in recent weeks. Not that declining inventory alone does not signal a strengthening market. Look to the Market Action Index and Days on market trends to gauge whether buyer interest is changing with the available supply. Average Days an Aspen Home is on the Market:
The properties have been on the market for an average of 317 days. Half of the listings have come newly on the market in the past 253 or so days.. Median Asking Price of Aspen Homes for Sale:
The market has been on a downward trend recently and this week, while essentially flat, doesn't break us out of that cycle. Frias Market Action Index:
The ASPEN market is currently quite strongly in the Buyer's Advantage zone (below 30). The 90-day Market Action Index stands at 13.12. With several months of inventory available at the current sales rate, buyers should find ample choice.  Â
Top Deals in Aspen Luxury Real Estate Downtown Aspen Lot 1118 Waters Avenue - $3,050,000
This 9,016 SF lot sets just four (4) blocks from the base of the Gondola as one of just four single family lots currently on the market in downtown Aspen. Two of the other lots are located east of the Roaring Fork River and the fourth lot is located about eleven (11) blocks to the west of the Gondola. The lot is zoned R-15 which allows for the construction of 4.080 SF above grade with the potential of building as much or more below grade. The lot is located on a quiet cul-de-sac with views of Aspen Mountain. In addition, the lot is improved with a 2,209 SF existing mountain style home giving you the convenience of living in the existing home while designing a new home for the property. If you design and build a t 6,000 SF home, your land costs equal about $560 per FAR SF, a very reasonable price for downtown Aspen land.
Large Home Development Deal - 39 Polecat Drive - $1,995,000
Fully approved, ready to build seven (7) bedroom12, 395 SF new mountain contemporary home on 5.02 acres in West Buttermilk. The home design can be reduced in size to a four (4) or five (5) bedroom home of about 9,474 SF. In addition, the property is currently improved with a 2,686 SF home that was completely renovated in 1999. This is a spectacular opportunity to own a modern new well designed home with none of the headaches of getting all the approvals. Great opportunity for a buyer looking to build their own home or a developer looking for a great opportunity.
