Scott Bayens: The spectacle, speculation and obsession that is the Aspen real estate market
Full disclosure: I am a closet fan of the Bravo cable series, “Million Dollar Listing.” I won’t comment if I’ve ever tuned into “Real Housewives,” but why wouldn’t I watch a show about luxury real estate? That’s my business, it’s what I’m selling, and I’m always eager to gain new insight and perspective. But when I first tuned in, as fascinating and engaging as I found the subject matter, I was curious as to why anyone else would be interested.
In hindsight, the answer is as obvious as the ridiculousness of the question. For the most part, the rest of the world doesn’t get to see what’s behind those gilded doors high on the hill. Not to mention, viewers get a glimpse of where the 1% of the 1% kick off their shoes, crash and use the bathroom. At its core, it’s a harmless escape and as entertaining as it is addictive.
But here in the rarified air of Aspen Snowmass, where dirt goes for millions and a home can set you back eight figures, that kind of attention can spawn inaccurate speculation and confusion.
Case in point; a recent article by Hugo Cox that appeared in last month’s issue of Financial Times entitled, “A chill wind blows through Aspen’s property market,” indicated local values are “cooling” and in a “tumble.” Needless to say, the missive got more than a few views and shares around here after painting a grim picture of “unsold homes piling up.”
Local agents Andrew Ernemann and Chris Klug, colleagues of mine at Aspen Snowmass Sotheby’s, and both of whom recently bought ownership stakes in the firm, were aligned in their criticism of what they saw as the author’s myopic view.
“Safely in my top three worst articles of all time when it comes to an accurate portrayal,” Ernemann wrote to his clients. The 2019 market “has continued to thrive, with strong sales at all price points, and particularly in areas where sales have lagged over the past several years. East Aspen, West Aspen and areas further outside of town are posting solid stats. Snowmass Village is finally full steam ahead with impressive price gains this year,” he continued.
The forward-looking Klug put it this way: “I think we’re all a little apprehensive about the upcoming election year, but the economy remains strong and I’m very optimistic.”
For those keeping score at home, real estate sales in Pitkin County are on pace to meet or exceed the $1.8 billion mark set in 2018. In some cases recorded transactions simply defy reason; a tear-down on Lake Avenue in the West End closed last fall for nearly $16 million, two townhomes near Lift 1A sold just shy of $2,500 a square foot and a fully entitled lot on Red Mountain broke all previous records at $5 million an acre.
That said, both experts acknowledge a bloated inventory of homes in the upper strata of the market as an emerging problem. According to the MLS, there are currently 34 homes priced over $20M with at least 10 more under construction.
“The challenge is that the Aspen real estate market has pushed up and up for several years and now there are too many high-end spec homes and other sellers trying to cash in at prices that attract only a handful of buyers a year,” observes Ernemann.
Klug sees the picture in terms of expectations and value: “Not all sellers are realistic and not all homes check all the boxes. But those properties that do — in terms of location, floor plan, finishes, views, convenience and amenity — are moving.”
The data clearly present a bit of a conundrum for developers and recently has resulted in some significant price reductions. There now exists a bit of a race to the finish line for these experienced players who bet on the market years ago, with the anticipation of big returns down the road. The good news is, if you are active in this arena, it might be good time to negotiate.
The coming year is sure to be a bit of an amalgam; presidential election, China, stocks and who knows what else (i.e. North Korea). Any crystal ball predictions are sure to remain elusive. But for those who have had their run in Aspen and are considering cashing in their chips, the market remains favorable. And similarly, those who have dreamed of owning a second home here might be hard-pressed to find any reason to delay reaping the rewards of securing their little corner of mountain paradise and be certain they have the next decade or two to enjoy it.
Scott Bayens (GRI, ABR, CNE) is a realtor and top producer with Aspen Snowmass Sotheby’s International Realty. Learn more by visiting his website at http://www.aspendreamhome.com.