Sales show signs of life for real estate
May 7, 2002
The Aspen-area real estate market showed enough signs of life in the first quarter that some agents predicted a recovery from the sluggish sales of 2001.
Single-family home sales increased modestly, but the dollar volume from those sales shot up dramatically during the first quarter of 2002 compared to the same period last year, according to statistics tracked by the Aspen Board of Realtors.
Single-family home sales increased from 67 in the first quarter of last year to 74 this year.
The dollar volume from those sales skyrocketed 67 percent from $80.76 million last year to $134.96 million this year. The average sales price increased from $1.34 million to $1.82 million for sales throughout the area.
Sales in Aspen led the surge. Aspen Board of Realtors members closed on 19 sales in Aspen for $78.3 million during the first quarter of the year, according to the organization’s data. Members completed 14 sales for about $40 million last year.
The average sales price for single-family homes in Aspen jumped from $3 million to $4.1 million.
Recommended Stories For You
Those statistics suggested to Aspen real estate firm owner Rich Wagar that the slump of 2001 is over. He said Aspen real estate slumps have never lasted more than two years, and often less, since he started tracking data in 1970.
“August will be the end of our two-year cycle,” Wagar said.
Aspen real estate agent Bob Ritchie shared cautious optimism about the first-quarter statistics.
“It’s good news,” he said. “Is it significant? No.”
He noted first-quarter sales are usually slow, even in a good year, so their value in establishing a trend for the year is limited. The end of the third quarter is the critical period for the health of the market.
On the other hand, it would be demoralizing to have first-quarter statistics sink below last year’s level, Ritchie said. The number of sales by Aspen Board of Realtors members fell 33 percent last year, making it one of the worst declines in Aspen’s modern era.
“This is a good harbinger for summer,” said Ritchie of the first-quarter improvement.
He is also encouraged by signs he saw of new high-end real estate activity on the coasts of Florida and Southern California. Aspen’s real estate market is tied to activity in those places, he said.
The Aspen market’s recovery could be hampered by a lack of specific inventory and ongoing trouble with the national economy, according to Ritchie.
He said the Aspen area lacks inventory in the $10 million to $15 million range. “That should be our bread-and-butter high-end market,” he said.
Instead there are few excellent choices in that market segment. Ritchie blamed much of the shortage on Pitkin County’s 5,750-square-foot house-size cap. It’s gutted speculators’ development of homes, he said.
Sales of single-family home lots didn’t keep pace with the home-sale surge during the first quarter. There were 35 sales for $14.55 million through the first quarter of this year, compared to 43 sales for nearly $29 million for the same period last year, according to the Aspen Board of Realtors.
Most of the single-family home lot sales have occurred downvalley.
Ritchie said midmarket sales remain weak in Aspen because buyers in that segment continue to be haunted by stock market losses. He defined the midmarket buyers as those shopping for between $2.5 million and $5.5 million.
“When the stock market went back to where it was three years ago, it hit them right square in the pocketbook,” he said.
Aspen’s lower-end buyers have adjusted to tough financial times by spending less, but they still spend, Ritchie said. And high-end buyers don’t need to adjust their lifestyle regardless of recent losses.
He said he sees enough encouraging signs to predict that 2002 will be better for the real estate market than 2001.
“I don’t think it’s going to be hugely better,” he said.
Wagar is optimistic due to a trend he saw developing at the end of the ski season. He said his firm worked with 31 potential buyers who were new to the Aspen market in the last 30 days of the ski season.
“There are a lot of people looking at Aspen now that weren’t previously,” Wagar said.