Aspen real estate market’s first half best since 2007
SURGE IN FIRST-HALF SALES
Pitkin County real estate dollar volume, January through June
2007 $1.43 billion
Sources: Land Title Guarantee Co; Pitkin County Clerk and Recorder
The Aspen-area real estate market surged to its best first half this year since prerecession days.
All real estate transactions in Pitkin County totaled $929.24 million from January through June, according to statistics through April that were compiled by Land Title Guarantee Co. and from the Pitkin County Clerk and Recorder’s Office for May and June.
The dollar volume includes sales of everything from employee housing to commercial buildings in Aspen’s downtown core.
That tops the first-half performance every year back to 2007, when sales from January through June hit $1.43 billion, according to records kept by Land Title Guarantee Co.
Last year, the Pitkin County real estate market hit $662.80 million during the first half. This year is up 40 percent from that time.
Andrew Ernemann, a real estate agent with Aspen-Snowmass Sotheby’s International Realty, said there is no doubt total dollar volume this year will exceed 2014’s. However, dollar volume is still well behind levels set in the mid-2000s.
“We are seeing prices back at that level — not everywhere,” he said.
The high end of the luxury residential market — homes greater than $10 million — is faring particularly well right now, Ernemann said.
Even back in 2009, when overall activity was low, the luxury market was healthy, he said. The segment retreated a bit in 2013 but bounced back in 2014 and is on track for a stronger year this year.
A report prepared by Ernemann shows there have been eight sales in the Aspen area of homes more expensive than $10 million, and another five sales are pending through June. Last year, there were 17 sales of homes at $10 million or greater.
There are 28 homes listed at prices exceeding $15 million. There are 14 active listings between $12.5 million and $15 million and eight between $10 million and $12.5 million, according to Ernemann’s report.
In addition to exceeding last year’s dollar volume, Ernemann said he believes the number of transactions this year to last will be up, though not by a huge amount.
Carrie Wells, a real estate broker with Coldwell Banker Mason Morse, said price per square foot is exceeding prerecession levels for prime properties. That was a trend that started last year, she said.
Markets segments such as the downtown core, West End and Red Mountain are leading the current surge, as they often did in the past, said Wells, who is a previews properties specialist with Coldwell Banker, meaning she specializes in more expensive homes.
“We’re seeing a continuation of how important location is and the lifestyle of our buyers,” Wells said. Many buyers want to be close to the core. That’s resulted in a lack of inventory in those areas. Lower inventory means higher prices.
Aspen-area single-family homes prices are up 18 percent from last year, she said. The average single-family home price for all areas in and around Aspen is $6.3 million, according to Wells.
The 2015 market also has been strong for speculative builders.
“The developers are back in full form, buying and selling,” Wells said. And with good reason, she noted. “New construction is always attractive.”
The strong sales activity has got advantages and disadvantages. Sellers are getting closer to their asking prices. Single-family homes in Aspen are selling for about 91 percent of listing price, Ernemann said, and Aspen condos are going for about 95 percent of listing price.
On the other hand, the sales surge has gobbled up the inventory. Listings are down by about 50 percent in the Aspen area over the past five years, Ernemann said.
In Aspen, the listing inventory is down 9.4 percent from last year at this time in single-family homes and condominiums, while it’s about the same in Snowmass Village, according to Ernemann’s report.
He said he sees two factors contributing to a “glass ceiling” in the Aspen-area estate market. The drop in oil and gas prices could affect the activity in the market from buyers from Texas and other oil-rich places, he said.
Also, the “widespread buzz” about the strength of the market could drive up sellers’ listing prices, even if not warranted.
Ernemann, like most real estate agents who work extensively with statistics for reports, looks at market segments rather than total dollar volume of all sales. His research shows there are some areas that are performing “great” in terms of transactions and prices. Other areas are experiencing strong performance but not great, he said.
However, sellers are getting bullish, regardless of where their property is located.
“They’re hearing that the market is doing well and they don’t want to leave money on the table,” Ernemann said.
In fact, it’s been an “uneven recovery,” he said. Property in and close to the core is doing well. Condos have soared 20 percent in prices since 2012, he said, while single-family homes in the neighborhoods closest to the core are up 20 to 25 percent over that period.
Wells said she expects the first half trends to continue during the second half. About 60 percent of business is during the summer months, she said, and August is particularly robust. Nothing short of a “global catastrophe” could derail the strong performance this year, she said.
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