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Real estate market on record pace

The Aspen real estate market has been on fire for the past 12 months and is probably on pace for a record-setting performance in 2004, say some longtime real estate agents.The first half of the year is usually a quiet time for the local real estate industry but sales have sizzled so far. Transactions in the Roaring Fork Valley through the Aspen Board of Realtors Multiple Listing Service have topped $652 million already in 2004. The record of $1.2 billion in sales was established in 2000.With the traditionally busiest months of the year still to come, real estate agents expect the record to fall.”We’re definitely on a record pace. There’s no way around it,” said Bob Ritchie, a partner in Coates, Reid and Waldron.Ritchie said he had a gut feeling that sales have been on a torrid pace since last July so he had his assistant crunch some numbers to compare. For the 12-month period ending June 2004, sales through the Aspen MLS hit $1.31 billion. That’s up 69 percent from the 12-month period that ended June 2003, according to Ritchie’s data.He labeled the 12 months between July 2002 and June 2003 “the deadest period” ever for Aspen real estate in recent times.”This is one of the most significant market turnarounds we have ever experienced,” he said.So what has changed? “I think people are feeling better about the economy and worse about living in the city,” said Rich Wagar, the owner of the Aspen real estate company bearing his name.He said the real estate industry slump started back in August 2000 and lasted until August 2003. That three-year slump is the longest he has ever witnessed in his 34 years of assessing the local market.Chuck Frias, owner of Frias Properties, said there are all sorts of glowing ways the statistics can be examined. “The bottom line is the market has shown a definite upswing since last July,” he said.It should come as no surprise. Slumps in the local market are usually brief and often end with a bang, according to Frias. “It’s a trend we’ve seen many times in Aspen,” he said of the strong recovery.The latest surge in activity will send prices soaring, predicted Ritchie. Over the last year, the average sale price of 105 single-family homes sold in Aspen was $3.65 million – an increase of just 4 percent from the prior 12-month period, he said.But now that property is moving again, sellers are starting to jack up their asking price. A “significant” price appreciation that is a normal part of the cycle is yet to come, he said.Luxury homes were selling for $850 to $900 per square foot until recently, according to Ritchie. Now prices are “moving toward” $1,200 to $1,300 per square foot, he said.”It’s really sticker shock for the luxury home buyer right now,” said Ritchie.Frias agreed that appreciation will probably be strong, especially among the best and newest products. But only those buyers who are “uneducated” about the Aspen market will suffer sticker shock, he said.Wagar said prices haven’t reflected the surge in sales yet. He believes it’s still a buyer’s market and will remain so through the summer. By winter, as the inventory really starts to disappear, it will become a seller’s market, he said.Ritchie’s data indicates that the inventory has shrunk from a 4.7-year supply a year ago to a 2.25-year supply. That means that if no new property came on the market, the current inventory would disappear in 2.25 years at the current sales pace.The properties that sold over the past year were those at a price that offered the best value, regardless of their market segment, he said. In other words, properly priced product moved.”I think the easiest deals are gone,” Ritchie said.Now that the market is hot, the sales and appreciation will soon move into the higher-priced half of the market, he predicted.The downvalley real estate market also bounced back over the past year, but not as strong as the Aspen area. There were 538 sales of homes, condos and land in the Basalt, Missouri Heights and Carbondale markets for the 12 months ending June 2004, according to Ritchie’s data. That was up 19 percent from the prior 12-month period.Sales of property in those areas hit $258.65 million for that period, up 48 percent.Scott Condon’s e-mail address is scondon@aspentimes.com.


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