Aspen-area real estate sales approach $1.4 billion in 2016
January 17, 2017
Reports and newsletters trickling in last week confirmed what Aspen-area real estate watchers already knew: The market was down significantly in 2016.
And compared with 2015, it was down indisputably.
That year, Pitkin County's total sales volume broke the $2 billion barrier, the first time the mark had been eclipsed since the Great Recession. Pre-recession, county real estate sales topped $2 billion three times — in 2005 and 2007, as well as the record-setting $2.64 billion in 2006.
In 2016, total sales neared $1.4 billion, according to Land Title Guarantee Co. and Aspen Times research of public records. Compared with those $2 billion years, the drop-off was significant. But 2016 was, on its own, still a solid year, brokers said.
"2015 was on another level," said Raifie Bass of Douglas Elliman Real Estate's Aspen office. "But overall, 2016 was strong."
Last year ended three straight years of sales growth in Pitkin County — starting with $1.2 billion in 2013, $1.5 billion in 2014 and the lofty numbers that 2015 yielded.
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Brokers assigned much of the decline to the uncertainties that 2016 ushered in — from the tensely divided political climate at home to the terrorism acts and volatile economies abroad.
Aspen, the backbone of Pitkin County's real estate industry, ended five consecutive years of increased sales volume in 2016, noted broker Andrew Ernemann in his monthly newsletter issued last week. Total sales in Aspen dropped 39 percent, Ernemann reported.
The slower market spurred an 18 percent rise in Aspen's inventory, with the average seller capturing 93 percent of their listing price, Ernemann said.
Aspen's average single-family home price was nearly $6.6 million through from January through November of 2016, according to Land Title Guarantee. For the entire 2015, it was nearly $7.7 million.
Sales transactions solely in Aspen also dropped from 323 in 2015 to 202 in 2016, brokers James Benvenuto and Jennifer Houston said last week in their annual market report.
That figure included 55 single-family home sales equating to $345.5 million in sales in Aspen, a 56 percent plunge from the $805.97 million in 2015 transactions, according to the Benvenuto/Houston report.
Condo sales were down 27 percent in sales volume in 2016, with 134 sales accounting for $268.4 million in sales last year, in contrast with 187 sales equating to $368.5 million in 2015.
Vacant Aspen land totaled 13 sales worth $75.9 million last year, compared with 27 amounting to $104.5 million in 2015. That translated to a drop of 27 percent in total sold dollar volume.
"On the surface, the Aspen stats are somewhat concerning and there's little question the tide has shifted from a market that was improving year over year for five-plus years to a slowing market," Ernemann's report said. "It's critical to dig below the high-level stats and understand almost all of the negative trends were set during the first seven-plus months of 2016 and the latter part of 2016 actually tracked fairly closely to the year prior."
Pitkin County property records show that six of the county's 10 most expensive transactions took place starting Sept. 20 with the $15 million sale of a West Hallam home, to the Snowmass Acquisition Co.'s $56.5 million sale of the Snowmass Base Village property to Aspen Skiing Co., East West Partners of Avon and an affiliate of KSL Capital Partners in December.
And after the November election of Donald Trump to the Oval Office, five of the county's 10 biggest sales of the year closed, records show.
November also posted nearly $149 million in total sales in Pitkin County, a 9.3 percent improvement over the $235.8 million registered in November 2015, according to data from Land Title Guarantee Co.
Aspen Times research showed nearly $225 million in sales in December, a stat fueled by the Base Village deal, making it the highest dollar month since September 2015, which rang up more than $270 million.
"Whether it's a 'honeymoon' political period or we're actually allowing ourselves to be more confident in positive economic outlooks, our market has improved substantially in the last three months," Berkshire Hathaway
HomeServices|Aspen Snowmass Properties said in its mid-December newsletter.
Real estate sales don't simply translate into lining the pockets of brokers and expanding the portfolios of investors. They benefit the public sector, as well.
The city of Aspen's Finance Department noted last week in its monthly report that its collection of the Real Estate Transfer taxes — which help support the city's funds for affordable housing and the Wheeler Opera House — didn't come close to meeting projections for 2016.
The portion of the transfer tax that benefits the housing fund was 21 percent shy of projections, drawing $6.3 million rather than the $8 million that was budgeted. In 2015, that same fund collected $10 million.
On the Wheeler side, $3.3 million was collected in 2016, 22 percent lower than the $4.3 million projected, and well short of the $5.4 million reaped in 2015.
SNOWMASS HOLDS ITS OWN
Snowmass, meanwhile, continued to hold onto the pace set in 2015, showing just a 3 percent drop in overall sales in 2016, according to Ernemann's report.
"While the Snowmass Village real estate market appears pretty stable compared to the Aspen real estate stats, it's clear the psychology of the overall market is very intertwined," Ernemann reported. "Snowmass Village is preparing for a giant psychological boost in the form of Base Village seeing the first new construction since before the last recession."
The single-family market in Snowmass in 2016 actually outperformed 2015, based on numbers from Benvenuto and Houston.
Last year, 38 single-family residences combined to sell for just less than $150 million, compared with 35 homes selling for nearly $145 million in 2015.
The average single-family home sold for $3.9 million in 2016, according to Benvenuto and Houston, who also noted that Base Village activity likely stirred interest in Snowmass.
"Your dollar just goes a lot further in Snowmass and buyers continued to purchase homes there, and there was not the drop off that we saw in Aspen," their newsletter said. "The Aspen Skiing Co. stepped up to purchase an interest in developing the base area at Snowmass and I expect that Snowmass will continue to see sales rise as anticipation of a completed Base Village at Snowmass nears."