Stone: Sooo-eee! This little piggy went to market
“Bulls make money. Bears make money. Hogs get slaughtered.”
That’s a little bit of investment advice that stockbrokers like to trot out when they’re trying for the folksy touch.
Oh yeah, that’s where I go for investment tips: the folksy Wall Street banker in his three-piece suit and straw cowboy hat, chewing on a stalk of hay.
Anyway, the point is that you can make money betting the market will go up, and you can make money betting the market will go down —but if you get too greedy, you’re going to get killed in the end.
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That bit of advice — particularly the “hogs get slaughtered” part — came to mind when I read the story last week about an Aspen house that sold at auction for $15 million.
And that’s the sad part.
Sure, 15 million bucks might seem like a lot of money to some of us, but the sad truth behind that big number is that the house had been listed for sale at just under $44 million — so it sold for one-third the listing price.
And the point about hogs at the slaughterhouse was hammered home by the news that the owner of that charming little place had rejected offers in the “upper-$20 million range.”
Certainly one hates to take joy in someone else’s misfortune … well, actually, no, not this time. This time I am simply flat out gleeful about the misfortune of this particular slaughtered hog.
And, to continue my unseemly schadenfreude-fest, the same story reported that another house sold at auction the same day for $9.75 million — less than half its $20 million listing price.
Hoggery loves company.
Some people are pitching this story as evidence that the Aspen real estate market still has not come back from the Great Recession.
They wait, desperately, for the Second Coming of the Real Estate Boom.
They should remember this: That other eagerly anticipated Second Coming is scheduled to be accompanied by an apocalypse — well, actually, The Apocalypse. And if you thought the plunging real estate market was apocalyptic, just wait until you see what the Battle of Armageddon does to the price of a nice little condo out at Snowmass.
Bear in mind, the first Book of Enoch promised that the mountains will “melt like wax,” and that has to be a bad indicator for ski-area real estate.
OK. Let’s pause and get a grip on what passes for reality (as distinct from realty).
One obvious reality-based conclusion here is that the Aspen real estate market was wildly over-inflated back in 2007, when that supposedly $44 million house was built — and immediately put on the market
Is there really any excuse for a $44 million house at the base of Buttermilk — a ski area where nothing’s extreme, except the greed. (I offer, free of charge, that to the Skico as a marketing slogan for our delightful beginners’ mountain.)
The answer is that the only excuse for that expensive a house is the conviction that someone will be foolish enough to pay that much for a second (or third or fourth or fifth) house.
That’s the Greater Fool Theory (as applied in the Aspen Greater Metropolitan/Greater Fool District) and, as far as I’m concerned, those who want to play that game are more than welcome to amuse themselves — and, of course, get slaughtered, as appropriate.
I really don’t care. Sure, houses like that one represent a blatant waste of resources. But, really, people: Ski resorts are industrial operations in the middle of the mountains, and the people who own those houses fly in on their private jets. So, in the greater scheme of things, the difference between a cheerful $5 million shack and a $44 million obscenity is relatively minor.
But my real point (and, yes, I do have one) is that the fate of the ORE (Obscene Real Estate) market should be irrelevant to the future of Aspen.
I guess we could be concerned about the cut-rate market — say, $5 million and less.
But those Mega-Million Mammoth Mansions might as well sink into the mud and disappear, just like the mammoths up at Snowmass did back in the Pleistocene epoch. (“A History of Aspen: From the Pleistocene Epoch to the Silicon Implant.”)
At least the fossilized mammoths gave Snowmass tourism a little boost. The new bizarre beasties — the mega-mansions — don’t contribute much at all to our local economy.
Oh sure, a few real estate sales sharks get rich on the commissions. Good for them. But for the community as a whole, those houses are a liability.
The construction bucks mostly go out of town (to those cranky workmen in pickup trucks who clog the highway year-round). Downtown retail spaces are taken over by handbag museums and diamond merchants. A few restaurants smirk and list $50 entrees on their menus. (Again, the Bigger Fool Theory at work.)
What part of that is good for Aspen?
None of it, that’s what.
Aspen is a beautiful town. A wonderful community. A great place to visit (if you don’t mind the handbag museums, the highway clogged with construction trucks and the smirking restaurateurs with their $50 entrees).
And for a lucky few of us (and I use the word “lucky” even though for most of us a whole lot of hard work was involved), it’s a glorious place to live.
No matter how big or small your home may be.
And, really, if you’re going to stay, what your home is worth doesn’t matter. Because you’re not planning on selling, are you?
You’re not that big a fool.
Or that big a hog.
Andy Stone is former editor of The Aspen Times. His email address is email@example.com.
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