Aspen worker housing sales slow in 2011
The Aspen Times
Aspen, CO Colorado
ASPEN – Whether to move forward with the construction of more worker housing at Aspen’s Burlingame Ranch subdivision is a decision that will come to the City Council this spring against the backdrop of a sluggish market for homes and condos set aside for the local workforce.
The Aspen/Pitkin County Housing Authority closed the books on one of the slower years in recent memory for the community’s employee housing program in 2011, when the office recorded 60 sales worth $13.1 million. In the past five years, only 2008, was slower, with 43 sales worth $9.3 million.
In addition last year, there were nine sales of units by their owners, totaling $5.1 million. Those homes were in the Resident Occupied category, generally the most expensive of units restricted to ownership by local workers.
Worker housing makes up a unique segment of the local real estate market. Transactions are driven by an owner’s decision to sell or the construction of new units that are offered for the first time. If neither occurs, there is little activity. Buyers must meet certain qualifications as a local worker. Sale prices are divided into categories that correlate to income/asset categories for buyers.
While the number of housing sales were down in 2011, more notable was the number of prospective buyers – often fewer than a dozen takers for units that, in the booming days of the employee housing program – attracted larger numbers of lottery participants hoping to win a shot at buying a residence.
In 2011, one-bedroom units remained the hottest commodity in the market. At Alpine Cottages, a $165,844 one-bedroom condo attracted 49 bidders, while a Benedict Commons one-bedroom unit priced at $159,177 drew 39 interested buyers. A one-bedroom condo at Obermeyer Place, priced at $101,333, attracted 44 bidders.
The interest in two- and three-bedroom units, however, was substantially lower. Workers vying for a $186,820 two-bedroom, two-bath unit at the Bavarian Inn had a one-in-five chance of winning the lottery for that residence if they met the qualifications as a priority bidder (someone with at least a four-year work history). Another four buyers without priority status also entered the lottery.
A three-bedroom, three-bath residence priced at $229,559 at the base of Aspen Highlands drew seven lottery participants, only four of whom had priority status based on their work history. Only if all four turned it down would any of the three remaining bidders have a shot.
Of late, the housing office has seen units go to someone who wasn’t a priority bidder and higher priced units don’t always fetch their full price, as determined by the caps on appreciation imposed by the housing program, said Cindy Christensen, housing operations manager. Such was the situation when she started working in the housing office 20 years ago.
“I never thought we’d come back to this,” she said. “Things were going so gung-ho for so long.”
At Burlingame Ranch, a 3-bedroom, two-bath unit priced at $284,000 attracted 20 bidders when it was sold for the first time in 2007. Last year, the unit came up for sale for $309,542. There were two interested buyers, one of whom had priority status.
The city is now considering construction of a second phase at Burlingame, but has asked interested buyers to not only pre-qualify with the housing authority, but also with a lender. Of roughly 240 buyers who have expressed interest, the housing office has so far determined at least 50 could get a loan, Christensen said. Housing officials are still whittling through the list; the City Council’s goal was to confirm at least 60 prequalified buyers before moving forward.
Mayor Mick Ireland believes there will be sufficient buyers for a second phase at Burlingame.
“Once you actually start doing infrastructure out there, more people are going to be inclined to go through the process with a lender,” he said. “I think people are looking to see if we’re going to commit, we’re looking to see if they’re going to commit. It’s kind of in that limbo.”
Another phase of Burlingame is key to giving families a place to live in Aspen and keeping the next generation of the workforce here, Ireland believes. Potential buyers include those living in cramped quarters in some of the community’s other worker housing complexes.
“Burlingame meets the need of people who want to have a family and have the room to do it,” the mayor said. “You can’t continue to run your community with people who are over 60.”
Lower participation in lotteries for existing units doesn’t dissuade Ireland of the need for more housing at Burlingame. A one-in-100 chance of winning a housing lottery during the program’s boom days meant a worker had a 1 percent chance at gaining a foothold in the community, he noted.
“That means you weren’t anywhere close to meeting the need,” Ireland said.
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