Realtors see some signs of hope in Aspen market
November 1, 2009
ASPEN – The Aspen real estate market might be rebounding after a rough period, real estate agents said Friday.
While no one claims the market is strong or anywhere near its glory days earlier this decade, at least it is showing signs of renewed interest among buyers.
“The general mood in the valley is that things are improving, and the numbers are starting to confirm this,” B.J. Adams, co-owner of B.J. Adams and Co., said in a newsletter e-mailed this week. “Historically, the second quarter is our best and each successive quarter softens, but not this year, indicating a market turn.”
Michael Adams, president and co-owner of the firm, believes the market hit the trough sometime in the first quarter of this year. During the third quarter, the number of sales increased by a healthy margin in Aspen and Basalt compared to the second quarter, and activity edged up in Snowmass Village.
From the peak in early 2007 to the trough in the first quarter of this year, sales activity fell 69 percent in Aspen, Michael Adams said. It’s bounced back 23 percent.
Snowmass fell 82 percent peak to trough and has regained 16 percent of the loss. Basalt activity plummeted 90 percent but has nosed back 10 percent, according to Adams research.
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Cumulatively, activity nose-dived 78 percent from peak to trough and now it has rebounded 21 percent from that apparent trough, Michael Adams said.
Brian Hazen, a real estate agent with Mason and Morse in Aspen, said there was a definitive increase in activity during August and September. “There’s been a lot of activity – more than people think,” he said.
Hazen agreed that the worst is probably behind the upper valley market.
“This summer we’ve been tumbling along the bottom and now we’re sort of coming out of it,” he said.
Hazen believes some buyers regained confidence in the third quarter thanks to some encouraging national economic news: the stock market climbed above 10,000 for a while; the gross domestic product, a broad measure of economic health, grew during the quarter; and home prices climbed in some markets.
Buyers in the Aspen market include some of the wealthiest people in the country. They still have discretionary dollars and now that the economy is showing signs of recovering, they are ready to act.
Hazen observed that the mid-range of Aspen’s market, properties priced between $3 million to $6 million, didn’t seem as hard hit as the upper part of the market and the properties under $3 million range. The recession stung the super-wealthy and the lower end of Aspen buyers.
Adams credited some of the increase in activity to buyers and sellers getting more realistic about conditions. Sellers realized they could no longer price property like it was 2007. Buyers realized “this isn’t Detroit” and that values weren’t going to collapse, he said. The average and median prices are increasing, signaling that buyers are shifting into higher end properties, he said.
Adams said a “price adjustment” was probably necessary in the upper valley market. The double digit annual increases from earlier in the decade weren’t sustainable. Even with the adjustment, prices didn’t fall nearly as much in the upper valley as they did in most places in the country.
“We’re going to find that value held pretty well,” Adams said.
Hazen expects activity will be slow this winter, but he’s already looking forward to next year.
“Next summer we’re going to start moving,” he said.
Statistics compiled by Adams show the dollar volume of sales continues to send mixed messages. Aspen eked out a 1 percent increase in dollar volume during the third quarter compared to the same period last year. Sales hit $177.24 million.
Snowmass, on the other hand, was down 67 percent in dollar volume for the quarter at $36.83 million.
Basalt’s dollar volume climbed 7 percent for the quarter to $16.59 million.