Scott Bayens: The tale of two markets
June 11, 2017
As I sit here at my desk studying the most recent sales and stats, it's clear the local market continues to gain steam and in some cases surprise and amaze. Talking to colleagues, the Aspen area is up double over last year for dollar volume sold and about the same as it was at this point in 2015. Meanwhile, volume in Snowmass Village is hovering just a little better than last year. As you might recall, 2015 exceeded the $2-billion mark in total sales volume in Pitkin County, but last year was disappointing as we saw a 33 percent drop from that previous peak.
Given where we are now, it's a good bet the summer will heat up as we head into what is traditionally the time when most buyers arrive in town and sellers are at the ready with their wares on full display. There are over 500 active listings for homes, condos and ranches in Aspen/Snowmass as of now. There are another 268 in the Basalt/Willits area and in Carbondale — single-family homes and condos.
As you might imagine, new listings in all areas have trended up as we enter the high season of buying and selling. Or so we hope.
Recent sales on Red Mountain have topped $3,100 per square foot for new, top-shelf, contemporary-styled product. In the West End, similarly finished homes have closed near $2,000 a square foot, while a home last year overlooking Hallam Lake (which sold before it even hit the market) bested $2,700 a square foot achieving an eye-popping $15 million final closing price. The overwhelming consensus seeming to be, if you build a product referred to as "modern-mountain contemporary," it looks like you can't lose. Same for heavy remodels. And forget fix and flips — some have reaped $1 million-plus rewards by simply buying high-end homes with the right style and location, sleeping in the beds for a year or two and selling again.
Meanwhile, down in Willits outside Basalt, it seems the same phenomenon is holding true. There, where inventory is tight and demand is high (particularly in the $500,000 to $800,000 range), new product with clean lines and fancy finishes is literally flying off the shelf.
Take the Park Modern townhomes as one example. Described as small-town living for the 21st century, Park Modern's website reads "The floor plans are ample, elegant, open, loft like, all on one level and efficient." It doesn't hurt that you can walk to Whole Foods either. Since 2016, 20 units have been sold there; another five are pending. So the demand is most definitely there. And with sold prices per square foot averaging well above $500, the project begins to defy explanation.
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All sounds positively groovy right? Might even seem like we are right where we left off in 2007 and 2008 before we dropped off the cliff. Here we are, almost a decade later, and it's time to cash out! However, that's exactly that kind of thinking that can present a problem and could potentially derail our recent momentum. Here's what I mean. With so many owners out there who bought at the height of the market, there's a tendency to believe now is the time to recoup all their lost equity or worse think they can make a profit. As a market expert and 2007 home buyer myself, I'd like to caution that perspective.
Don't forget, 10 years have gone by — so in many cases, the inventory we've all managed to hold on to is, frankly, a bit dated, a little stale and perhaps in need of some repair. Yes, there's good, healthy interest and activity in many areas, but incomes have fallen, savings were drained and caution moving forward is stronger than it was then. What I'm saying is, there is a limit to what buyers today will pay for more abundant, somewhat older existing product. One way of seeing it is there are really two markets at play here: the rare sellers with the shiny new pennies who sell before multiple listing services, and the majority of us carrying old pocket change that looks like everyone else's.
The point is, even as the top percentile is making record breaking sales and purchases, the rest of us with our aging, paid-too-much inventory need to be careful not to get too cocky or overconfident. It's more important than ever to price homes, condos and lots correctly and specific to the current market. Not to make the mistake of "mine's better because or this is special" unless it really is special or better. Let an expert make that determination and listen.
The good news is owners of existing homes, condos and lots who want to liquidate now find themselves in a seller's market for the first time in years, but barring a few exceptions, will likely never recoup what they originally paid in the heyday. Selling? Hell, yes! But put it out there right rather than let your buyer drive past to the guy next door who gets it and understands what he's really got. Comparable sales and a smart broker will tell you where you need to be to get it done. Don't miss this boat because, honestly, the time seems to be now and none of us knows how and when it will change again.
Scott Bayens is a broker/Realtor with Aspen Snowmass Sotheby's International Real Estate with more than a decade of experience with buyers and sellers. He works with Michael Perau. Both work as a team to offer twice the presence and availability. Scott can be reached at email@example.com.