What is happening in the Upper Roaring Fork Valley Real Estate Market today? As the majority of our country experiences appreciation in real estate, and decreasing inventory, Aspen and Snowmass’s resort real estate markets are bouncing back <!--more-->slower, but are picking up, and primed for the strongest year since the economic downturn began in 2008. At the peak of the market in 2007 real estate sales topped 2.5 billion in Pitkin County, compared to about 1.5 billion in total dollar sales last year, a 40% decrease. This report analyzes the current state of the Aspen and Snowmass real estate markets in the fourth quarter of 2013 in anticipation of a strong finish to 2013.
The Aspen real estate market continues to improve, while Snowmass is still lagging behind. Historically the resort markets in general trail our primary feeder markets by a couple of years. As our primary, feeder markets take off, the resort markets follow. This past summer I experienced the busiest period of showing activity of my six year career, but it wasn’t translating to contracts initially; that all changed this fall with a flurry of sales activity. I sold 59 Maroon Drive last week and am closing on a vacant downtown lot this week. I am experiencing my best year of real estate sales activity since 2008. In certain price brackets there is very little or no inventory, while other price ranges or neighborhoods remain soft. Location and supply and demand still rule the market. The Aspen downtown core, West End and Red Mountain markets remain our strongest sectors with the one to three million-price bracket the most active, followed by the 3-5 million category.
According to Land Title Guarantee Company’s September Pitkin County Market Analysis year to date total dollar volume is $987,721,443. I anticipate that we will close the gap before the end of the year, and exceed the 1.5 billion mark this year. The Land Title report points out that “September was the strongest dollar and transaction month of the year!”
One interesting fact highlighted in Land Title’s report is that there were “409 total transactions for September, an increase of 438% from 2012,” and “Year to date, transactions totaled 1,321, an increase of 156% from same period in 2012.” However the average single family home sold price through September is $3,669,187, a decrease of 13% from full year 2012 and the median single family home sold price thru September is $2,350,000, a decrease of 16% from full year 2012.
Calculating the absorption rate, the pace at which homes sell, is a helpful tool to determine supply and demand, and health of our market. There are currently 332 residential whole ownership properties for sale in Aspen, Colorado. 242 properties have sold in the past year. To calculate the absorption rate simply divide the number of homes sold in a particular time frame, in this case a year, by the number of months 242/12 = 20.1 homes sold per month, the absorption rate. Now if we divide the current supply of active listings, 332, by 20.1 months we arrive at 16.51. Which means it will take about sixteen and a half months to sell off the current inventory, not accounting for any new inventory entering the market place.
There are currently 332 listings for sale of all property types in the Aspen market today. The Aspen Board of Realtors Local Market Update for Quarter 3-2013, a research tool provided by CAR, shows that there is a 22.4 month supply of single family homes in Aspen, down from 33 months, a 32.1% decrease. Townhouse-Condo inventory is down to 13.9 months in 2013 from 21.2, a 34.4% decrease.
Inventory is decreasing while sales prices are down, supply and demand will dictate pricing and appreciation. Interest rates remain at historic lows probably until springtime. Buyer’s are more selective today; sellers must be priced right, staged correctly and marketed aggressively to sell today. Aspen remains one of the most special places in the world with it’s world class cultural, culinary, outdoor activities and access. Because of this unique combination of intellectual and athletic endeavors in a spectacular alpine setting and a limited supply of residential properties, the real estate market will remain one of the most exclusive in the world. Buyers continue to fall in love with Aspen, which will continue to drive sales and a strong finish to 2013.
Aspen is off to a great start to winter with one of our strongest openings in years. We received a few more inches of new snow again last night. The skiing and riding are super fun now. I hope to see you back in the mountains again soon. Happy Thanksgiving!