Real estate market in Basalt, El Jebel, Carbondale slowly improving
MIXED SIGNS FOR COMMERCIAL PROPERTY
Numerous vacancies in Basalt’s downtown commercial core haven’t chased away investors.
A company called 255 Gold Rivers Court Holdings, which is affiliated with CW Capital Asset Management of West Bethesda, Maryland, acquired about 20,000 square feet of vacant space in the second and third floors of the Riverside Plaza Building, Lot A, in a foreclosure sale last fall.
The vacant space was formerly occupied by Total Merchant Services, a credit card processing company that employed about 140 people before it closed its Basalt office and relocated. The company’s departure dented the town’s economy during the recession.
The property owner is interested in leasing rather than selling the space, said Bennett Bramson, a real estate agent with Aspen Snowmass Sotheby’s International Realty. His clients want to gold onto their investment, he said.
U.S. Bank National Association made the successful bid of $3.2 million for the property in an Eagle County Public Trustee’s sale in September, according to public records. The bank assigned the certificate of purchase to 255 Gold River Court Holdings, which shares an address with CW Capital Asset Management.
Bramson said the firm’s direction is indicative of the assessment that Basalt property is a good investment despite current vacancies.
He said commercial rents range from $15 to $30 per square foot, triple net, downtown. The gross lease rate at Willits Town Center is about $45 to $50 per square foot.
He said he believes the vacancies at Willits will be filled because of the traffic generated by Whole Foods Market and other destinations. There are several large spaces available for rent downtown, but most people who are shopping for space want smaller footprints.
“There aren’t a lot of vacancies that meet people’s needs,” he said.
The midvalley real estate market has had a choppy recovery from the recession but has the potential this year to top a strong 2014 performance, according to veteran real estate agents.
The combined Basalt, El Jebel and Carbondale markets are no longer being influenced by foreclosures and bank sales. That has allowed prices to stabilize and even recover some of the losses from the recession. However, factors such as a relatively low inventory, almost no new product, uncertainty over interest rates and determination by sellers to stick to higher listing prices make it tough to determine how the market will fare during the second half of 2015.
“There’s a lot of hype about the real estate market being hot,” said Darryl Grosjean, owner and managing broker of Basalt Realty. Segments of the market in Basalt are hot, he said, but it’s not across the board.
Entry-level condominiums and townhouses in Basalt are selling well so far this year, Grosjean said. Single-family home sales are flat.
There have been 25 sales of condos and townhouses in Basalt through May this year compared with 15 over the same period last year, Grosjean said, citing data from the Colorado Association of Realtors. Prices are averaging in the mid-$400,000s.
There have been 14 sales of single-family homes in Basalt through May this year compared with 15 last year through May. Part of the reason for the flat activity is higher single-family home prices, Grosjean said. Prices are running from the mid-$600,000s to mid-$900,000s.
“June had a huge jump in listing prices,” he said. “Sellers are jumping in, but buyers are being cautious.”
Bennett Bramson, a real estate agent with Aspen Snowmass Sotheby’s International Realty, said the midvalley market is moving to a more “neutral” place. It’s been a buyers’ market since 2008. Buyers still have a slight advantage, but it’s shifting, he said.
Sellers are gaining confidence for a number of reasons, increasing sales and climbing prices chief among them. The midvalley market registered strong growth in 2014 over the prior year. There were 517 transactions in Basalt, El Jebel and Carbondale in 2014, an increase of nearly 9 percent, according to a report by Land Title Guarantee Co.
The dollar volume of the sales soared 37.6 percent to $329.69 million in 2014, the report said.
Through April this year, which are the latest statistics compiled, transactions are running slightly ahead of the same period last year, according to Land Title Guarantee Co. Dollar volume is up a healthy 15.75 percent to $80.78 million through April, the title company’s latest report said.
Grosjean said buyers are definitely shopping in Basalt. His firm is the busiest it has been in seven years because of more buyers walking through the doors, he said. Grosjean has been a midvalley real estate agent for 38 years.
The interest among buyers is affecting the market. Last year, residential properties were selling for 94 percent of the listing price, on average. This year the selling price has climbed to 96 percent of listing price, on average, Grosjean said.
“The sellers are holding tough,” he said.
Nevertheless, prices haven’t bounced back to pre-recession levels. Bramson said upper-end homes that were selling in excess of $1 million at Willits prior to the economic downturn dropped significantly in value but now have recovered to the high-$800,000s.
Both Grosjean and Bramson said they feel the Basalt market’s performance will be strong enough during the second half of 2015 for the year in total to top 2014. Interest rates remain low, but the industry expectation is that they will rise, Grosjean said. That diminishes the buying power of buyers in the midvalley, Bramson said.
Both real estate agents also said the strong surge in segments of the Aspen real estate market will benefit downvalley. Aspen recovers first; downvalley follows.
Grosjean said there are numerous pending sales, which, if completed, would push performance in 2015 above 2014.
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American Whitewater, Conservation Colorado and Western Resource Advocates are proposing an amendment to Colorado legislation that would allow natural river features such as waves and rapids to get a water right.