Aspen real estate sales picking up a bit
October 3, 2013
Many involved in the local real estate industry viewed sales in the first half of 2013, both commercial and residential, as modest.
However, since early July, activity has been on the rise in both markets, providing hope that by the end of the year the overall sales volume will be on par with last year's totals, area real-estate sources say.
According to Andrew Ernemann, broker associate for B.J. Adams and Co. Real Estate, the final week of August and the first two weeks of September have been especially productive. He specialized in residential markets.
"The trend over the last couple of years has been that we see more buyers waiting until the end of the summer to make offers," he said. "More and more, we are finding that people are being patient, saying, 'I think I'll wait to see what shakes out with the market, see if there is any movement on prices, see if there are any other opportunities that come up.'"
Though the offseason is setting in and there aren't nearly as many people in town as there were from mid-June to mid-August, the pace of residential real estate offerings and closings has quickened over the past three weeks, he said.
"There aren't as many people in town right now looking at real estate, but the number of properties going under contract is a lot," he said.
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Included in the recent activity is one big sale: $27 million for the 800-plus-acre Aspen Valley Ranch on Sept. 3, sold by Alpine Bank, Ernemann said. The price ties the previous high for the year, $27 million for one of two sales involving Jigsaw Ranch near Castle Creek during the spring.
There isn't as much inventory in the Pitkin County residential market this year, he said. Listing inventory is down 9 percent through August compared with the first eight months of last year. But there is a 13 percent increase in properties under contract, Ernemann said.
"What I told people earlier in the year was, 'Don't be surprised as the year goes on if we start in a bit of a hole, compared with last year, but by the end of the year we end up finishing on track or even better than 2012,'" he said. "I do expect that by the end of September we'll be ahead of last year in terms of dollar volume and certainly ahead in number of sales, and we'll also see prices going up."
Condominium and single-family-home values, in terms of the price per square foot, are up about 5 percent through August compared with the same period last year, he said.
"You can expect that trend to continue," he said. By the end of the year, "prices per square foot will be up somewhere in the 5 to 10 percent range."
Ernemann said he would characterize the Aspen residential market as stable, a term that applies across the board to all neighborhoods. In recent years, some neighborhoods outperformed others.
"It's not a market that's going on a tear and going crazy, but it's fundamentally solid, and you have lower inventory and higher sales, putting pressure on prices," he said. "It's in a good place right now."
As for the commercial market, it's relatively quiet this year, mainly because several large properties downtown sold at the end of last year, including the Mountain Plaza and Volk Plaza properties, both at South Galena Street and East Cooper Avenue. They sold for $22 million and $17.25 million, respectively, in December.
Still, it's a healthy sector, Ernemann said, noting that he keeps his eye on commercial activity even though his main focus is on the residential market.
"Retail rents continue to rise in downtown Aspen, and vacancies are at very low levels for retail, and they are dropping for office," he said. "The leasing activity is healthy. There aren't many large commercial buildings or properties that are for sale right now. But there are buyers that have so much confidence and faith in the downtown Aspen core that it continues to drive the commercial market in a positive direction."
Karen Setterfield, commercial real estate broker with Setterfield & Bright, echoed that evaluation. She noted that she handles only Aspen, where sales and offers under contract have been on the rise as of late.
On Aug. 26, she represented the buyer in a $1 million transaction for a 2,600-square-foot unit in the Paragon Building at 419 E. Hyman Ave., a space that formerly was the home of the Speakeasy Club.
Setterfield said she has a second-floor Durant Mall property under contract that closes next month. It was listed for $4 million, but she said she could not reveal the amount in the contract. She's representing both the buyer and the seller in the transaction. Durant Mall is next door to City Market.
One of the more prominent commercial properties currently listed for sale is the building at 410 E. Hyman Ave., the home of the Buffalo Collection. It's listed for nearly $10 million.
"We've had offers, but it's not under contract," she said.
Currently, few downtown commercial properties are available, Setterfield said, noting that she set a personal record in 2012 by brokering six sales, whereas so far this year she has closed on two.
"Because there is not much inventory, people have had to go out and find sales that aren't listed," she added.