Snowmass fuels real estate frenzy | AspenTimes.com

Snowmass fuels real estate frenzy

Real estate is selling at such a frenzied pace in Pitkin County that only a lack of inventory threatens to put the brakes on the surge, according to analysts.Activity in Snowmass Village is playing a big part in what’s shaping up to be a record-setting pace through the first five months of the year. Real estate agent Steve LaMar says the “Base Village syndrome” has dominated the market for the last few years.Potential buyers and sellers waited for a few years to see if the residential and commercial mix at the base of the ski area would be approved, first by the Town Council, then by voters in a hard-fought election.”Once Base Village got passed everything just exploded,” said LaMar, a longtime real estate agent with Coates, Reid and Waldron. “We sold more in about 70 days than we did in [the prior] six months.”So far this year, there have been 201 sales in Snowmass Village, an increase of 40 percent over the first five months of 2004. The dollar volume of those sales is $93.18 million, more than double the pace of last year, according to statistics tracked by Land Title Guarantee Co. of Aspen.”It’s just been out of control,” said Jim Pomeroy, marketing director for the title insurance firm. “It’s not just condos. It’s high-end properties as well.”And it’s not just the Snowmass Village market that is sizzling. So far in Pitkin County, there have been 713 real estate transactions recorded with the county clerk’s office, according to Pomeroy’s report. That compares to 492 transactions at the same point last year.The dollar volume through the first five months is up from $140.34 million last year to $242.77 million this year.The record for real estate sales was shattered last year at $1.6 billion in Pitkin County. The pace set so far this year, if continued, would set a record topping $2 billion in sales, Pomeroy said.Some national analysts have warned that the real estate bubble could burst in some parts of the country and that rapidly appreciating prices cannot be sustained. Federal Reserve Chairman Alan Greenspan has referred to “froth” in some markets.But Craig Morris, a partner in Morris and Fyrwald Real Estate in Aspen, said the high desire for property in the Aspen area coupled with the limited supply safeguards the market.”There’s been zero discussion about a bubble,” Morris said. “It just boils down to we’re a unique, small market.”He said the residential market between $2 million and $5 million is the strongest category in Pitkin County. High land costs and increasing construction costs have drastically increased the supply of properties in the $8 million and up segment – one that is relatively untested.In 2003, there were eight homes sold for $8 million or more in Aspen and Snowmass Village. Last year the number increased to 16. This year six have sold in that category and three more are under contract, Morris said. That’s emerging as a growing strength in the market.Timberline Bank President Mike Taets cited a different statistic to show the depth of the market. He said there have been 118 sales of homes for $3 million or more in Aspen since Jan. 1, 2004. That shows the immense popularity of Aspen among wealthy buyers, particularly baby boomers.”How many people in the country can afford second homes over $3 million?” Taets said.Brent Waldron, a partner in Coates, Reid and Waldron, said an interesting phenomenon has been spurred by sales of fractional ownership units, in which a buyer acquires ownership of a unit for a specific number of weeks per year.When fractionals, also known as intervals, became popular a couple of years ago, the fear was the trend would eat into other real estate sales. Instead, people buying fractionals are enjoying Aspen so much they are buying condos and keeping their fractionals, Waldron said.”The intervals are bringing new buyers into the market,” Waldron said.Taets sounded a minor note of caution about what appears to be an infallible market. His perspective on the “speculation” in Snowmass Village was different from some other observers.”You’re talking to a banker now and to a banker there is no such thing as safe speculation,” he said.In the bigger picture, Taets said, it’s always difficult to imagine an end to a red-hot market. But some unexpected event or factor always pops up to slow activity down. However, the real estate market in the upper Roaring Fork Valley only hits an occasional plateau rather than a valley when sales slow, Taets noted.Scott Condon’s e-mail address is scondon@aspentimes.com