Roger Marolt: Roger This
The Aspen Times
Aspen, CO Colorado
An old friend was in town last week, and we had lunch at Bad Billy’s. We tried to find a city of Aspen employee to take us out on a roll or two of taxpayers’ dimes, reasoning that they could play shuffle board and call it business while we talked, but we couldn’t find one. It was a drizzly, miserable day, and we figured most of them had already settled in at Montagna for cozy meals by the fireplace.
It didn’t matter. My buddy is good company, picked up the tab, and told me a little bit about our town that hadn’t occurred to me before, so a burger and fries with the ordinary folks was good enough.
I am an opinionated guy who likes to talk, but I can be a good listener, too, if you are buying me lunch. This is especially true when I am certain that you are not trying to convince me of anything. And, while honesty may not be typical, I believe that when somebody speaks honestly their sentiments oftentimes are. I mention this because what my friend told me over lunch was related to his personal circumstances, but I believe it might be applicable to a lot of people.
Before I tell you what he said, there is one thing you need to know. My friend loves this town. He loves this town so much that he has been considering buying a place here for the past five years, even during that insane time back in 2006 when timeshares were hot and people were buying duplexes for $6 million a side! If there is anything he loves more than this town, it is looking for houses in this town. He’s seen them all, inside and out.
I tell you this so that you can be as shocked as I was when I asked him, now that the real estate market is showing signs of cracking, whether or not he was finally getting ready to pull the trigger and put in some lowball offers. I expected his eyes to light up as he imagined 30 to 50 percent discounts from where prices were 12 months ago, the reward for his patience and persistence. Instead, he said, “I don’t think we’re in the market anymore.”
He was calm. He was sincere. There wasn’t a hint of regret in his voice. I asked him why.
His answer made more sense than two decades of broker spiel that nearly sucked him in last summer. He assured me that his family’s affection for the town has never been stronger. It was only that they loved Aspen in different ways during the different seasons. In the summer they couldn’t imagine not being in the West End. In the winter they wanted to be within walking distance of the slopes. Renting gave them far more options than owning, at a fraction of the cost.
Of course I thought the same thing that you are thinking ” the poor bastard’s portfolio must have taken a royal beating. He can’t afford this town anymore!
I put it to him straight and asked if that was the reason. He convinced me that his lack of money wasn’t the key. What was it then that had changed his mind so completely in such a short period of time?
“Appreciation,” he said. “It was the rose-colored lens that we had been looking through over the past five years and didn’t realize it. Now that it’s gone, we see this place as it truly is.”
Of course it was financial appreciation he was referring to and not his own personal admiration of this special place. The former has evaporated; the latter is stronger than ever.
He went on to explain that his vision of Aspen had been tainted by property increasing in value at 15 percent annually. Under those circumstances it is easy to convince yourself that a house in a part of town that is not your first choice will be fine. It is easier to justify pouring $5 million into a house you might not even use some years if it perpetually goes up in value anyway.
He and his wife had been contemplating spending millions of dollars here without realizing that it would, in effect, chain them to this town and make them feel guilty for not coming here all the time. For a fraction of the cost of buying a home, maintaining it, and potentially even losing money on it when they sell, they now plan to slum it at The Little Nell in the winter and rent a mansion for a few weeks in the summer, and sometime, if they feel like chartering a yacht in the Greek isles, they can do that instead.
He went on to say that if you look at things around the valley without the taint of expected appreciation Aspen is still an awfully nice place, but paradoxically more of a hassle to visit when you have to maintain a vacation house here. Basalt is cute, but it’s really a bedroom community that is still 15 miles and oftentimes a horrendous commute from Aspen. Carbondale is a small town with a good golf course and fishing, just like thousands of other places in the world. Of course, you might pay a premium if you want to live or spend most of your time in these places, but if you’re simply visiting you can enjoy them much more if your not spending your time maintaining an investment with dubious returns.
“The most ironic thing,” he added, “is that for us, buying a second home in Aspen, now that prices are lower, is far less attractive than when the market was going nuts. We see it completely differently. While the town is appreciating less, we have freed ourselves to appreciate it more.”
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