Aspen-area real estate logged such a strong first half in 2014 that one real estate agent is predicting that the market is finally poised to “lift off” after slogging through the recession and aftermath.
The dollar volume of all sales in Pitkin County from January through June was about $702.86 million compared with $520.68 million over the first half of 2013, according to statistics through May compiled by Land Title Guarantee Co. and an Aspen Times review of all deeds recorded in June. That is an increase of $182.18 million, or 35 percent.
“The Aspen real estate market appears to be at lift-off stage — the second quarter and first half of 2014 is what a decidedly improving market looks like,” Tim Estin wrote in his “Estin Report,” a quarterly analysis of the market. Estin is an associate broker with Aspen Snowmass Sotheby’s International Realty.
“There is a change going on in the market that is significant,” he said in an interview.
The “big turning point” is a rapidly disappearing inventory in some market segments combined with greater demand from confident and eager buyers, Estin said. Demand exceeded supply during the second quarter of 2014, a graph in his report showed.
April and May were particularly strong months for sales. Total sales volume was $180.24 million in April, according to Land Title Guarantee Co.’s latest report. That was the highest total for the month since at least 2008.
May surged to an even stronger $192.88 million in sales, the report showed.
Bob Starodoj, president of Coldwell Banker Mason Morse, said January and February were “pretty soft” and didn’t match the optimism that many real estate agents had going into 2014. That turned around.
“As we got deeper into the season, the numbers started to pick up,” he said.
Buyers from other countries helped fuel the comeback. There seemed to be a substantial number of buyers from Argentina, Brazil and the United Kingdom, according to Starodoj.
While the market is clearly improving, he cautioned against considering a return to the pre-recession days.
“I sure as hell wouldn’t call it a frenzy,” Starodoj said. “It’s getting stronger.”
There has been significantly more activity this year than in recent years in the upper end of the market, above $20 million, he said.
“The sweet spot is still between $5 million and $8 million,” Starodoj said.
The next strong period for closing real estate deals in Aspen is traditionally August, September and early October — after buyers shop during the summer.
An Aspen Times analysis of activity in June indicated that it cooled after the sizzling April and May. Sales of all types totaled about $79.52 million in June compared to $101.93 million for the month in 2013.
Those numbers reflect transactions of all types — from affordable housing to fractional interests to mansions.
Nevertheless, Estin and Starodoj are optimistic about the remainder of the year. As it gets deeper into the summer, showings of real estate and interest among buyers is “heating up,” Starodoj said. It’s impossible to predict how a year will shake out, he said, but 2014 likely will be the strongest since 2008.
Estin forecast that the strong start of the year will carry over to the last half due to favorable national economic trends and characteristics of Aspen’s real estate market.
On the national level, Wall Street is racking up record highs.
“Historically, as the stock market goes, so goes Aspen,” Estin wrote in his report.
Some investors are seeking a “safe harbor” for their money and portfolio diversification, according to Estin. He has personally heard buyers comment that Aspen is “relatively cheap” compared with luxury markets in major cities. The real estate recovery took longer in the Rocky Mountains than on the coasts and in major cities, he said.
“Bottom line: Relative to other real estate markets, the Aspen market has yet to spike, but those days may be numbered,” Estin wrote. His full report will be posted next week on EstinAspen.com.
He said the current condition of the market could spur some good and bad reactions. It might draw out sellers and add to the depleted inventory. However, it also might embolden sellers to be “overly bullish” with their prices, Estin said. That could turn off buyers and snuff the recovery before it gets rolling, he said.
Editor’s note: This story was changed to reflect real estate agent Tim Estin’s point that he wasn’t equating a “lift off” in the market with a “blast off.”