Local Economy

Market Overview - 2010 in Review
By Stephen Cieciuch

Overall dollar volume in the months of November and December of 2010 fell off the pace compared to the same months in 2009 by 63% and 64% respectively; however, this was primarily due to three large sales in those particular months of 2009; The Peaks Hotel sold in November of 2009 for a price of $17,000,000 which boosted November 2009 dollar volume dramatically. In December of 2009, six bank owned Coucheval units closed in addition to the sale of Historic Alta at $16,000,000 which accounted for 33% of that month's overall dollar volume. The number of transactions in November and December of 2010 were down 8% and 7% respectively versus the same months in 2009. If you compare apples to apples and take into consideration the two big sales (which were very specific in nature), the months of November and December were only slightly down compared to 2009.

The total dollar volume for San Miguel County sales in 2010 was $317.6M comprised of 327 sales versus $265.7M based on 276 sales in 2009. Total dollar volume in 2010 was up 20% versus 2009 and the number of transactions in 2010 was up 18% versus 2009.

Notable active sectors in November included four condominium units in the Town of Telluride which accounted for $3,045,000 in dollar volume.  One such residence located at 571 West Pacific Avenue closed for $969 per square foot for new construction. One home located in the Town of Telluride closed for $2,700,000. This well finished four level home built in 2006 closed for $802 per square foot.

Two Mountain Village condominiums sold for a total of $2,423,100 comprised predominantly of Elkstone Unit 3 which closed for $2,100,000 based on 4,183 s.f or $502 per s.f.  One, small 1,785 s.f. Mountain Village home situated on a .4 acre lot with ski access closed for $1,340,206 or $751 per s.f.  A 5 bedroom, 4.5 bath Ski Ranches home closed for $1,500,000 or $303 per s.f.

In December of 2010, sectors of activity included three sales of condominiums in the Town of Telluride, most notably a three bedroom Element 52 Unit which closed for $2,156,450 or $1,113 per square foot based on 1,938 square feet.  Three Mountain Village condominiums closed for a total of $3,867,100. A four bedroom, 4.5 bath Elkstone half duplex closed for $1,850,000 or $516 per s.f based on 3,588 s.f.  Two four bedroom, stand alone cabins located at Lodge at Mountain Village closed for $1,097,000 ($497 per/s.f) and $1,020,000 ($465 per/s.f.) respectively.  One, 4 bedroom, 4.5 bath single family home located in Aldasoro Ranch closed for $2,000,000 or $408 per s.f. based on 4,901 square feet.

The market continues to demonstrate sales at the opposite ends of the spectrum ranging from highly motivated sellers parting with properties in the $400 to $500 per s.f. price range while unique, newly constructed product has garnered over $1,100 per s.f as evidenced by the Element 52 sale.  More sales at similar price points of Element 52 are scheduled to close throughout 2011. Good inventory is steadily being absorbed at very attractive prices and it continues to be a buyer’s market. There are now enough sold comparables for properties to be priced accurately and the properties that have been priced accordingly are selling. 

I believe 2011 will continue to produce more of the same; great buys for properties that are well priced and sporadic high-end sales for one of a kind properties offering the best locations and services.  Foreclosures still represent a small percentage of the overall market yet numbers have been creeping up steadily since 2008 with 65 properties county wide currently slated for Public Trustee Sale.  

As always, please feel free to contact me directly to discuss the market in greater detail. If you are interested in buying a property in the region, please inquire with me to find out what I consider to be the best buys in the market today.  Thank you and best wishes for a healthy, happy and prosperous 2011! 

Despite the Uncertain Economy, Winter Exceeded Expectations in Telluride
by Karen James
Mar 31, 2010

Summer Shaping Up for Improvement

TELLURIDE – As the 2009/2010 winter tourist season draws to a close, it looks like Telluride pulled through the challenging recessionary economy better than anyone would have dared to imagine just six months ago.

And although no one is willing to declare the region’s economic woes a thing of the past just yet, the sound of a collective exhale has become audible as lodgers, restaurateurs and the Telluride Ski Resort report a stronger-than-expected season.

“We performed much better than I expected,” said Telluride Tourism Board/Marketing Telluride Inc. Chief Executive Officer Scott McQuade, who last fall tracked occupancy rates in Telluride and Mountain Village running 30 to 50 percent behind last year – which itself came in at 22 percent behind the record 2007/2008 season.

“Those were scary numbers we had never seen before,” said McQuade.

“It was really a brave new world, if you will, in terms of staring down a winter that essentially wasn’t going to happen.”

But thanks to Telluride’s superior snowfall compared to its competitors and what may also be an indicator of increased optimism about the nation’s economic picture, “People did book their vacations,” said McQuade, who estimated that the season’s occupancy will end up about 8 to 10 percent over last year.

“Other of our competitors didn’t see the uptick,” he said. “They’re still behind last year.”

Lodgers reported success beyond anything they had hoped.

“We had some surprisingly very strong months,” said Frank Ruggieri, Director of Marketing for Telluride Alpine Lodging, which handles reservations on 350 hotel units, condominiums and private homes.

“We’re happy to see people traveling again.”

And unlike last winter when people were looking almost exclusively for bargains, Ruggieri said, this season, while remaining somewhat price conscious, “They were more interested in the winter experience and they were wiling to pay for it.”

“The beginning of the season did not look very good,” said Ice House and Camel’s Garden owner Michael Zivian. “It was amazing how it filled in,” he continued.

At the Hotel Columbia, the almost unthinkable happed, reported Columbia Telluride LLC manager Dirk DePagter.

“It’s been a record winter for us,” he said, noting that the property didn’t just see a 50 percent increase over last winter’s reduced revenue, but is actually tracking 20 percent ahead of its record 2007/2008 season while remaining even for occupancy.

“Because of the remodel and being newer and fresher we ended up higher rate,” he accounted for the growth.

DePagter also cited the snowfall and a hardworking staff for the property’s strong performance in the touch-and-go season.

“They really stepped it up a notch on service,” he said of the staff, noting an increase in return visitors to the hotel.

“I wouldn’t have anticipated that we were going to be as strong as we have been,” said Hotel Telluride General Manager Mark Murphy. “Obviously, though, I’m very pleased that we have,” he continued, noting that the condo-hotel is approaching a 30 percent increase in revenue over last season although it is not yet back to its pre-recession numbers.

“Occupancy has been strong because we’ve lowered room rates,” he said.

At the recently renovated New Sheridan where occupancy increased 15 to 20 percent over last year, General Manger Ray Farnsworth told a similar story.

“We had to give a little on the rate side,” he said, calling it an “effective strategy” to secure bookings.

Still, with a higher occupancy albeit at a lower rate, “The net result is a strong winter with stronger than anticipated revenue,” he said.

In Mountain Village, “It’s been a fairly good season,” said Capella General Manager John Volponi, noting “some nice pickup” in February.

Additionally, “We were busy on all the major weeks, I was pretty pleased with that.”

Like lodgers, the restaurants also seem to have fared the season in reasonably good stead.

“Last spring, summer and fall were about as terrible as it could get,” said Cosmopolitan restaurant chef and owner Chad Scothorn.

“Up until mid-December, we were scared,” he continued, noting that the restaurant made “a tremendous amount of cutbacks” in response to the economic downturn.

Then the restaurant saw a reversal of fortune, turning last year’s double digit decreases into increases to return to “almost even from two years ago,” Scothorn said.

“A lot of people were willing to have fun and let loose with their money a little bit,” he said. “I still think people are watching their money but compared to the year before it’s much better.”

At La Cocina de Luz, chef and owner Lucas Price reported increases over last year – in part because the restaurant’s moderate prices kept diners coming and in part because of its expansion.

At the New Sheridan’s Chophouse, Farnsworth noted, although the restaurant did slower breakfast and lunch business than expected, it made up the difference at dinner.

Although a number of Chophouse guests were interested in the $21 steak and glass of wine bar special, others were “going big, not afraid to spend money” on wine ranging from $200-500 a bottle, for example, he said.

Overall, combined food and beverage sales increased 10 percent over last year.

“There are certainly no complaints,” said Farnsworth. “We’re very pleased and pleasantly surprised.”

At the Telluride Ski Resort Chief Executive Officer Dave Riley declined to give numbers, but confirmed a higher number of skier days than last year.

“We’re up,” he said. “I think we did well considering the economy,” he said, speculating that the cause was “a reflection of some of the momentum that Telluride has in the marketplace…and the great snow we’ve gotten.”

Skiers and snowboarders were also more inclined to pay for lessons than they were last year, but “it’s not where it was in 2007,” Riley said.

Although occupancy, skier days and restaurant covers indicate that people are here and spending to a certain degree, if there’s one area where they continue to hold back it may be on purely discretionary purchases.

“That’s probably a really fair summary,” said retailer Christine Reich when posed with the hypothesis.

“Retail hasn’t come back as strong.”

Murphy, of the Hotel Telluride, agreed, noting that while his occupancy and restaurant revenues are better than last year, revenues from spa treatments are not as strong as he’d like to see.

“Hey, you’re going to dine and ski, but maybe buying that spa treatment or new jacket – we’re not back to that yet,” he said.

At Telluride Trappings and Toggery, co-owner Todd Tice said the store “did fine” this winter. “We’re not backwards from 2009,” he said, adding lightly, “There wasn’t any room to go backwards.

“It did turn out better than we anticipated.”

Picaya owner Lisa Horlick has noticed a change in buyer behavior.

“I think it’s looking up,” she said.

While many people continue to look for discounts, others are spending more freely.

“I’m seeing more spontaneous purchases,” said Horlick.

There is also a sense that people with more income to spare are beginning to spend a little more freely than they have in the recent past, but those with less are continuing to rein in their purchasing.

“Our results are mixed,” said Reich, noting that sales at her higher-end Lustre Gallery, are up compared to last season, while at Zia Sun, where prices are lower, they’re down compared to last year.

At Schilling Studio Gallery, jewelry artist and gallery owner Amy Schilling was encouraged by the season.

“It went really well,” she said. “It’s been really fun, very successful.”

Last year, “I think people were really afraid; they had no idea what was going to happen,” she continued.

“People are more relaxed this year.”

“Well thank God for that,” said Telluride Gallery of Fine Art owner Will Thompson when asked if people bought art this season.

The summer season looks like it is shaping up for substantial improvement over last year as well, with advance reservations down against 2008 numbers, they’re well over the 40 to 60 percent deficit this time last year.

In August when the jam band Phish will play two shows in Town Park, occupancy is already booking 20 percent ahead of 2008 numbers, according to TTB/MTI’s McQuade,

“I’m not by any means saying we’re out of the bad economy,” he said. But “there are a lot of positive indicators that would tell us that Telluride is fairing well in comparison [to last year] and there is cause for optimism.”

“I’m optimistic and main reason for that is because we’re climbing out of winter with some momentum,” he continued. “It’s a testament that the Telluride brand is alive and well and continues to be desired.”