Steve Cieciuch's Telluride Real Estate Market Overview
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4th Quarter, Year End 2011
2011 is behind us and year end totals were lower than anticipated, however, December activity was on the rise with $29M worth of real estate going under contract. Currently there is $68.6M worth of property under contract which equates to 27% of the entire year of sales production in 2011, which should bode well for 2012.
The overall dollar volume of $247.4M for 2011 was down 22% versus 2010, while overall transaction volume was up 17%. The biggest drop in dollar volume occurred in Mountain Village with sales volume down 40%; however transaction volume was up 22% primarily because of the significant number of Peaks Hotel sales. Telluride experienced a 7% decrease in sales volume, while the number of transactions was up 7%. Overall sales volume for the balance of San Miguel County real estate was down 5%, while transaction volume was up 22%. Interestingly, the number of overall transactions at 383 was the highest since 2007, while dollar volume was the lowest in the last 4 years. 2011 experienced a preponderance of lower priced transactions while buyers in the high-end of the marketplace continued to demonstrate hesitancy.
Fourth quarter sales started out fairly strong with $21.2M in sales for October which ranked as the 5th best month of the year while November and December ranked as the 1st and 3rd poorest months of the year. This makes sense as market activity dropped significantly in late August and September due to the US debt downgrade, debt ceiling gridlock and continuing European sovereign debt concerns. As transactions typically close 45 to 60 days after upticks in activity, November and December bore the brunt of the decrease of late summer and fall showing activity. Telluride real estate was very headline sensitive all year long and these underperforming numbers paralleled the uneasiness in global markets across the board.
Notable sales in October included Rivercrown Unit 1, a 3 bedroom 3.5 bath condominium along the banks of the San Miguel River which closed for $3,006,000 or $1,075.91 per s.f. Six Mountain Village condominiums closed in October totaling $2,551,240 with a 2 bedroom Granita Unit closing for $995,000 or $677 per s.f. An older Mountain Village home in the Hood Park neighborhood closed for $2,950,000 or $475 per s.f., also a log and stone home built in 1988 in Elk Run closed for $2,150,000 or $367 per s.f. A bank-owned sale of a spec home in the Idarado subdivision, located several minutes to the east of Telluride, closed for $3,225,000. This was the last sale for a spec home near the Town of Telluride, as all new developer inventory has been absorbed. October ended up down 1% in overall sales volume compared to October 2010 and down 7% in transaction volume.
During November, a 4-bedroom, 4.5-bath home located on Tomboy Road in Telluride closed for $3,410,000 or $860 per s.f. One of the notable sales for 2011 closed for $4,475,000 in Mountain Village. This slopeside 7-bedroom, 7.5-bath residence for $615/ s.f. ended the month up 12% in overall dollar volume and down 4% in number of transaction compared to November 2010.
December experienced 6 sales of Mountain Village condominiums totaling $6,371,500, with a notable short sale of a See Forever 4 bedroom unit at $1,650,000. In addition, a significant bank sale occurred; the Cortina project closed for $3M and included 4 lots with 15 partially completed townhomes which began construction in 2007. Vacant land in the County experienced an uptick with 4 sales totaling $1,534,060. Overall, December ended up 11% in dollar volume versus 2010 and up 36% in transaction volume.
In December two significant homes went under contract listed at $14.9M and $7.9M respectively, Sound of Music Ranch Parcels B and C listed at $11.4M and $7.4M on Wilson Mesa contracted, as well as a 42-acre parcel with guest home at the Preserve listed for $5,850,000. Assuming these properties close, this could start a resurgence for the high-end market which was on hiatus in 2011. Anecdotally, I am getting the sense of pent up demand. If there is any sustained stretch of predictability in world markets, combined with the lack of new developer inventory being added to the market place, I believe 2012 will show significant improvement over 2011.
3rd Quarter 2011 & "Abundant Inventory Perception" - Steve's Telluride Properties Blog
August was the bright spot of the third quarter posting a 75% gain in dollar volume and 48% increase in transactions versus the same month in 2010. These solid gains helped offset the slower months of July and September in the third quarter. July was down 49% in dollar volume and 60% in transactions while September dropped 15% in dollar volume but rose 21% in transaction volume. Overall, the topsy turvey market has trended towards the downside in sales volume at - 28% while transaction volume is up 20% versus the third quarter in 2010. The upswing in transaction volume can be attributed to more activity in the lower priced sectors of the market while the high-end continues to struggle.
Contrary to the big upswing in August, Telluride condominiums had their biggest dollar volume in the slower months of July and September with $3,510,000 and $2,959,366 in dollar volume respectively. A 3 bedroom, 3.5 bath Rivercrown unit closed for $1,067 per s.f. in July reinforcing that premium product and locations in Telluride are holding value. Two high-end homes in Telluride also closed in July for $2,600,000 and $3,600,000 respectively. The first was a bank owned sale of a developer spec home and the other was an owner occupied residence that was built to high standards with excellent material selections. A bank owned sale at 229 N. Spruce for $1,485,200 marked the lowest price per s.f in July at $366/s.f. although this home will need an extensive remodel in order to be brought up to speed.
August experienced two Telluride home sales at $2,850,000 and $2,050,000 respectively. The former may prove to be the last bank owned sale of a spec home for the foreseeable future as this particular sector of inventory has been absorbed. There is no new spec product currently for sale and no spec homes currently under construction in the Town of Telluride. With no new construction being added to the market place, I anticipate inventory slowly dwindling in this specific market sector as there appears to be less shadow inventory in the Town of Telluride. Currently, there is only one spec home available in Mountain Village.
135 West Galena Avenue closed for $5,500,000 in September and this represented the highest price paid for a single family home in the Town of Telluride in 2011. Other notable sales were Unit C202 at Element 52 which closed for $2,671,866 or $1,154/s.f. (sales at Element 52 continue to exceed $1,000 per s.f. for this beautifully finished, rare, ski-in/ski-out product). A newly platted, 30' x 102' vacant lot in the East Depot II subdivision closed for $1,450,000 marking the highest price paid for a single family/duplex lot in the Town of Telluride in 2011.
The market continues to be headline sensitive and buyers are demonstrating hesitancy based on continuing European sovereign debt concerns, unemployment hovering at 9.1%, and the threat of a second recession. Anecdotally, based on the amount of quality showings this summer for a variety of different product, it appears that buyers are hovering and seriously looking to purchase. If Europe stabilizes and the economy shows any predictability, I anticipate sales to occur with more frequency for properties that have been adjusted in price accordingly and demonstrate value.
Abundant Inventory Perceptions
In a buyer’s market such as this, it’s easy for buyers to put off a buying decision based on the perception that there is sufficient inventory to continually wait for the “right time to buy”. Anecdotally I find the opposite to be true. Virtually every buyer in the Telluride region has a list of criteria of which they would like to adhere. For example, a buyer will make a broad market decision: do they want to own a home, condo or land in The Town of Telluride, Mountain Village, and outlying subdivision or perhaps a ranch? Within those broad parameters, subsets of criteria come into play such as location within the town or subdivision, view preferences, light preferences, number of bedrooms and baths, floor plan and most significantly price point and the value of the property within its given market sector.
Once a buyer has expressed their detailed criteria, it gives a broker the opportunity to fine-tune their search. My experience is that this provides a broker on average three to six properties in any given market sector that may qualify for their prospect. Of the properties that make the cut, often only one or two really fits the bill for a buyer’s needs. In a market such as this where there is no new construction to provide alternative choices, there are not many fall back options. In a situation where there are several buyers who have similar criteria and are looking at the same properties, it does not take more than one or two sales in any given market sector to change a buyer’s future options significantly.
In addition, due to current economic conditions some sellers have had no choice but to list their properties, which they ordinarily would not sell. For instance, there are ranches now on the market that have not been offered for sale for generations or direct slopeside residences and superbly located homes in Telluride that have been held by families for over a decade or more. This presents unique opportunities for buyers to buy the best locations at excellent value. Interestingly, some buyers strictly pursue bank owned or short sale properties in lesser locations believing that these are the best values when in reality they may not be.
There is usually a reason why a property is bank owned or a short sale. Although the acquisition price may seem fantastic, the better locations at slightly higher prices are typically the better deals because they will rebound first. The old adage of “location, location, location” is still the cardinal rule and to pay up slightly for this inventory (of which there is very little) may prove to be the best purchase a buyer could make. Certain high quality locations throughout the region are currently being absorbed by existing property owners in San Miguel County. This provides credence that experienced buyers of real estate in this region realize this is an opportune time to purchase quality locations and they are starting to add these properties to their portfolios.
I believe that there is pent up demand in certain market sectors, and in a small market like Telluride’s a few sales can dramatically change a buyers purchase options. It may not translate to an immediate uptick in prices but it may translate to limited quality options in a particular market sector. For buyers, the perception of limitless inventory may be an inaccurate perception.
2nd Quarter 2011
Overall dollar volume in the second quarter continued to lack pace versus the same three month period in 2010 with results showing an overall sales volume decline of 33%. Like much of the nation, San Miguel County has experienced a double dip to date in overall sales volume in 2011, however on a positive note; numbers of transactions were up 32% through the second quarter. Overall dollar volume in April was down 54% compared to April 2010 yet overall transaction volume was up 130%.
This increase in transaction volume can be attributed in part to 30 Peaks Hotel units closing in April for a total of $5,244,237 in total sales. These newly renovated hotel rooms were attractively priced, provided all the amenities of the Peaks Resort and Spa and sold between $321 and $404 per square foot.
Other factors that may be contributing to higher transaction volume are that there is more affordable inventory available than in years past providing opportunities for first time home buyers and buyers searching for value for lower priced condominiums. In April, five condominiums in the Town of Telluride sold for a total dollar volume of $2,178,000.
May showed a similar trend with overall sales volume down 36% while transaction volume was up 18%. A notable sale was a contemporary slopeside home located in Mountain Village which closed for $5,200,000. This unfurnished home offered 6 bedrooms, 6.5 baths among 8,170 square feet and closed for $636 per square foot. Four Mountain Village condominiums closed for a total dollar volume of $3,824,000 with prices per square foot ranging from $392/s.f to $487/s.f. Two of the closed units were built in 1995 and 1999 while the unit built in 2007 commanded a higher price per of $487. Four Telluride condominiums closed for a total dollar volume of $2,225,000 with prices per square foot ranging from $411 to $545. A slight trend emerged over the last two months where older, lower priced product was more popular than newer, more expensive inventory.
June numbers may have been a reflection of the past winter ski season in Telluride which did not provide the bounty of snow that other northern ski resorts experienced. With less skier traffic in 2011 compared to 2010 (when significant sales took place in Mountain Village for condominiums and homes) June may have suffered the brunt of less snow. As sales typically close 60 to 90 days after the usually busy months of February and March, overall sales volume may have reflected this lack of traffic with overall sales volume down 43% and transaction volume down 23%.
On a positive note, single family homes in Telluride experienced two sales of well located properties that commanded $728 and $858 per square foot respectively. The latter home was located in the Depot subdivision, one and a half blocks from the gondola and chair 8. In addition to this sale the buyer acquired the adjacent vacant lot in the Depot subdivision for $1,000,000. In addition, a 40 acre parcel located on Sunshine Mesa closed for $1,000,000 or $25,000 per acre. Of the sales that have occurred on Sunshine Mesa and Wilson Mesa for 35 acres parcels or greater in the last two years, values have held steady ranging from $19,800 to $25,000 per acre.
An interesting anecdote, I have been noticing a recent trend that existing property owners in San Miguel County have steadily been acquiring additional property or upgrading their existing properties. This indicates to me that these buyers (who have extensive local market knowledge) are seeing opportunity that they perceive may not last.
Opportunities continue to exist and Telluride which often follows suit behind markets such as Vail and Aspen might be poised for an increase in buyer activity as these two markets have experienced excellent gains in their dollar volume to date in 2011. Time will tell but history often repeats itself. As buyers look for value, Telluride usually gains market share Vail and Aspen experience absorption of inventory. Please feel free to call or email me to discuss what I consider to be the buys in our market today.
1ST QUARTER 2011
The first quarter of 2011 showed mixed results versus the same three months in 2010, as overall dollar volume was down 19% while the numbers of transactions were up 2%. January held its own with dollar volume up 2% and number of transactions up 38%. However, February stumbled significantly with overall sales dollar volume down 48% and number of transactions up 8%. February in Telluride echoed much of the nation’s woes as the Standard & Poors/Case Shiller 20 city index showed home prices declined from January to February and 11 markets experienced faster declines compared with the previous month. March rallied with overall dollar volume up 2% and number of transactions up 19%.
A significant transaction of a single family residence in Aldasoro Ranch took place in January of 2011 which closed at $7,250,000 or $702 s.f. based on 9,538 s.f. The closed price represented a 27% decline in value based on the purchase price of $10,000,000 in 2006. Additionally, a single family home located on Oak St. in Telluride closed for $2,140,000 or $590 per s.f. Five condominiums in Mountain Village closed in January for a total of $7,019,348. Most notably two units at Heritage Crossing closed for $2,225,000 and $2,300,000 or $638 and $705 per s.f. respectively. The $705 represented the highest price per square foot paid in January and the second overall highest price per square foot year-to-date for a condominium in Mountain Village.
Three deed restricted homes located in the Gold Run subdivision of Telluride closed for a total of $1,047,000 in January. A 6,231 square foot Ski Ranches residence closed for $1,600,000 or $257 per s.f. and six homes in San Miguel County closed for a total of $3,217,325.
Although February took a big hit in overall sales volume, the condominium market in Telluride showed significant resilience with four sales totaling $10,685,825. Most notably two Element 52 units closed for $4,970,000 or $1,131 per s.f. and $3,453,325 or $1,104 respectively. A three bedroom Hampton Court unit located on Pacific Ave. closed for $1,600,000 or $776 per s.f. A 5,508 square foot Mountain Village home on Double Eagle Drive closed for $2,500,000 or $454 per s.f. and a bank sale of a Lodge at Mountain Village free standing cabin closed for $990,000 or $448 per s.f.
March bounced back, evidenced by strong results in the condominium sector of Telluride and Mountain Village. Six sales in the Town of Telluride totaled $8,563,007 and 5 sales in Mountain Village totaled $5,325,000. Most notewrothy, a Bear Creek Loft unit closed for $1,800,000 or $1,071 per s.f., an Element 52 closed for $2,145,507 or $1,149 per s.f. and a new West Pacific Campus unit closed for $2,200,000 or $937 per s.f. in the Town of Telluride.
In Mountain Village, a new Trails Edge unit closed for $1,535,000 or $710 per s.f. which represents the highest price per square foot paid to date since 2009 for a Mountain Village Condominium. Vacant land in Mountain Village showed significant activity based on five sales for a total of $2,470,000.
Volatile activity throughout the first quarter demonstrates that the regional real estate market continues to find its footing. New, well-located product in the Town of Telluride demonstrates resilience evidenced by sales of several different projects, which closed over or near $1,000 per s.f. On the flipside, there is tremendous value with certain product, especially in outlying subdivisions where price per square foot is less than replacement cost.
I have catalogued that the best buys (whether driven by value or location) continue to be absorbed. Although the overall appearance is that inventory is abundant, for buyers wishing to fulfill a specific set of criteria and price point in any given market sector, the opposite is true. When buyers break down their needs for location, price etc. (whether it be for condominiums, homes, or land) there are typically only four to six properties that may suit their needs. Most often, only one or two properties ultimately make the cut. Often times there are no other suitable options to choose from in the event the property a buyer has identified is purchased.
If you are a buyer that has been tracking a property that fits your criteria, there may not be a better time than now to pull the trigger. Please feel free to call me so that I can help you identify which market sectors demonstrate the best values and which ones may have less quality inventory than you think.
NOVEMBER & DECEMBER 2010
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!
3RD QUARTER 2010 PLUS FIRST MONTH OF 4TH QUARTER
The third quarter for 2010 showed early gains over the third quarter in 2009 starting with a 95% increase in overall dollar amount and a 119% increase in number of transactions in the month of July,2010. Total Dollar volume in July was $29,461,279. Mountain Village single family homes led all sectors in respect to dollar volume with 3 sales totalling $12,440,000. An older residence built in 1997 constructed on a superb lot in the Hood Park area closed for $5,250,000 and represented a price of $764 per s.f. Originally listed at $7,500,000 in 2007 the home closed at 30% below its original list price. A new spec home closed for $4,240,000 or $620 per s.f. for new construction.
Other sectors that showed productivity in July were single family homes in Telluride totalling $5,500,000 among four sales. Prices per square foot for quality residences ranged from $601 to $1,087 for a well located guest home on Oak St. Lastly Mountain Village Condominiums totalled $4,130,000 among three sales. Two bank owned Tristant units closed at $414 per s.f. and $453 per s.f. respectively with a non bank owned new Townhome on the Creek at Tristant closing for $1,700,000 or $513 per s.f
August was the only other month of the thrird quarter to show a decline from 2009 numbers. Total dollar volume was $13,367,820. This down month was most likely a response to shaken consumer confidence emphasized by poor unemployment numbers throughout the summer, continued strain on the housing market across the country plus stock market declines. August finished minus 18% in dollar volume and down 22% in the number of transactions compared to August 2009.
September rebounded with a 76% increase in dollar volume and a 4% increase in the number of transactions compared to September 2009. Total Dollar volume in September was $28,968,951. The most notable sale was for a spec home in Mountain Village that closed for $9,500,000. The ski-in/ski-out residence was built to very high standards and offered multi-directional views plus southern light. Originally listed at $15.1M the home closed at 37% below its original list price. Five sales for condominiums in Telluride totalling $5,234,900 were highlighted by the sale of Riverwatch Unit 8 at $3,100,000 . An exquisitely remodeled river front unit located across from the gondola closed for $1,039 per s.f.
The start of the fourth quarter started lower than a year ago as October showed a decline in overall dollar volume of 35% plus a decline in the number of transactions of 22%. Total Dollar volume in October was $21,187,150 versus $33,565,563 in 2009. Telluride single family homes led market sectors with 3 sales totalling $5,775,000. Most notably, 673 East Pandora closed at $3,425,000 or $938 per s.f.
This downturn most likely mirrored a delay of confidence robbing events throughout the summer (most closings occurring 30 to 60 days after properties go under contract). As, August suffered from prior events such as the flash crash in May and turbulent stock market of June and July, October real estate sales most likely mirrored the malaise of consumer confidence throughout the summer which was bolstered by anxiety over mid term elections and potential elimination of the Bush tax cuts plus continued high unemployment.
Despite the poor performing months of June, August and October, overall dollar volume is is up 57% and the number of transactions is up 25% in 2010 versus 2009. Total Dollar Volume year to date through October is $287,308,527. Overall dollar volume lags 2008 by 8%. Sales such as 673 Pandora and Unit 8 Riverwatch illustrate that the highest quality finished homes and condominiums featuring the best locations in the Town of Telluride are holding value better than other market sectors.
The Telluride real estate market offers many opportunities with vacant land and condominiums leading the pack with discounts as much as 50% off the highs of 2007. Beautifully finished condominiums that can be purchased in the low to mid $500 per s.f. range are on my radar as excellent opportunities as well as ski-in/ski-out lots that have been severely discounted. Recent positive gains in the stock market and the results of mid term elections which seem to have elevated confidence in the business sector, may bode well for the balance of 2010.
SECOND QUARTER 2010
The second quarter showed two strong months for overall sales (April, May) and one slightly weaker month compared to the second quarter of 2009. April was a very big month ending at $45.9 million in total sales - up by a whopping 350% over the same month in 2009. In addition, the number of sales was up 23%. This month nearly matched April's numbers in 2006 which was our second highest April on record. The biggest categories were single family homes in Telluride, Aldasoro Ranch and Mountain Village which totaled $14,735,000, $10,000,000 and $8,000,000 respectively. The Town of Telluride home sales were anchored by two significant sales of $5,995,000 and $4,500,000 which reflected prices per square foot of $952 and $1,075 respectively. These are important figures as it demonstrates that quality product in good locations continue to hold value in the Town of Telluride.
The Mountain Village sale of $8,000,000 was for a spec home located slopeside on Butch Cassidy Dr. This sale represented a price per square foot of $800. The $10M sale In Aldasoro Ranch was allocated in trade for Boot Jack Ranch which represented the largest sale of a residential property to date in the United State at $46,000,000 in April of 2010. The buyer of Boot Jack Ranch conveyed this significant home on three lots in Aldasoro Ranch to the seller as partial consideration of the overall purchase price.
Mountain Village condominiums also demonstrated a solid month with $5,215,000 in total sales distributed over six units. Prices per square foot ranged from a low of $370 per s.f. for a one bedroom/loft Lodge at Mountain Village unit to $703 per s.f. for a new 2 bedroom Trails Edge Unit which closed for $1,120,000. A significant sale for an outlying property took place for a 120 acre parcel on Sunshine Mesa. The purchase price of $3,000,000 reflected a price per acre of $25,000 which also demonstrates resiliency for high quality property on the mesas that provides access to, or borders National Forest land. All in all, April showed strength in the high-end of the market and illustrated that high quality; well located properties in their respective market sectors are holding value.
May showed another solid month with overall sales volume of $33.7 million among 28 sales which reflected a 165% increase above 2009 in dollar volume and a 155% in the number of transactions. Mountain Village homes led all sectors with $17,021,000 divided among 4 sales. An elegant 4 bedroom, 4.5 bath spec home closed for $5,090,000 which reflected a price per square foot of $811. Located across Palmyra Drive from Bridges ski trail this home offered unique architecture and a high level of finish. Another significant home closed for $5,800,000 on Benchmark Drive. This new log home closed for $505 per square foot which represented excellent value for 7 bedrooms and 7.5 baths spread among 11,493 square feet.
Mountain Village Condominiums had another good showing with 5 sales totaling $4,480,000. Of these five sales, two were banked owned Tristant units which closed at $1,175,000 for 4 bedrooms and $1,025,000 for 3 bedrooms or $482 and $430 per square foot respectively.
June was the first month in 2010 not to show double digit gains in a month to month comparison of 2009, in fact total sales volume edged backwards by -4%. Total dollar volume of sales was $25.7 million and the number of transactions were identical to June of 2009 at 26 sales. The most active market sectors were Mountain Village Single family homes with $8,252,500 in dollar volume divided among 2 sales, single family homes in the Town of Telluride totalled $6,032,900 among 4 sales and Mountain Village Condominiums had 3 sales for $5,310,000. A log and stone slopeside residence in Mountain Village built in 2001 closed for $6,280,000 or $708 per s.f. and an older 4 bedroom residence located across for the Peaks closed for $1,972,000 or $654 per square foot. A bank owned residence on Colorado Avenue closed in the Town of Telluride for $1,185,000 or $332 per square foot and a remodeled home on Pacific Street closed for $2,200,000 or $641 per s.f. A bank owned Tristant 3 bedroom condominium closed for $960,000 ($490 per s.f.) and a 3 bedroom Lumiere unit closed for $2,000,000 or $693 per square foot. A single family vacant lot closed in the Town of Telluride for $1.3M and signified one of just a few vacant land sales this year, however at a price that reflects resiliency for good locations. A large stand alone condominium unit in Lodges at Sundance of 6,517 s.f. closed for $2,350,000 or $360 per s.f.
In retrospect, the second quarter showed some real signs of recovery in April and May and then hit the brakes in June. I believe a correlation to the rise of the stock market in the first quarter equated to some significant sales in April, however as consumer confidence started to dwindle in May compiled by the declining stock market and the flash crash it put buyers on edge and reflected in a slower June.
A trend however is becoming evident in 2010 that high quality well located inventory in addition to bank owned, seller distressed property are being absorbed at a consistent pace. These types of sales have contributed to an overall increase in total sales volume in the second quarter of 89% and a 45% increase in the number of transactions.
FIRST QUARTER 2010
The first quarter of 2010 has shown a considerable increase in dollar volume and increase in number of sales compared to the first three months of 2009. The month of January was up 68% in Dollar volume from $16M in 09’ to $26.9M in 2010 and the number of sales went from 13 to 51 sales, an increase of 131%. February posted a 51% increase in dollar volume from $24.7M in 09’ to $37.4M in 2010 with a 52% increase in the number of sales from 16 to 24. March showed the most impressive gain in dollar volume with a 120% increase from $12.2M in 09’ to $26.8M in 2010 and the number of sales increased by 68% from 23 to 32. Overall the first quarter ended up 68% in dollar volume and 68% in number of sales compared to the 1st quarter of last year.
In January, condominiums in the Town of Telluride started the year off strong with seven sales totaling $9,147,450. The most significant sale was for a new 4 bedroom 4.5 bath, 4,269 s.f. penthouse located above Telluride Sports. This beautifully appointed penthouse closed for $4,100,000 or $960 per s.f. Another newer 3 bedroom 3.5 bath condominium at Bear Creek Lofts closed for $1,750,000 or $959 per s.f. The lowest price per square foot transaction took place for Pacific Street Townhomes Unit 524A which closed for $850,000 or $457 per s.f.
The Mountain Village also experienced good activity for condominiums with five sales totaling $6,697,657. Prices per square foot varied from a low of $417 per square foot to a high of $900 per s.f. The latter sale was an in-partnership transaction which may have exceeded current market value. Also, a high-end 5 bedroom 5.5 bath Ski Ranch home closed for $1,975,000 on Lot 66 which represented $407 per square foot.
In February, Single Family Homes in Mountain Village made a strong rebound with four sales totaling $20,245,000. The most significant sale was for a new 8 bedroom 11.5 bath, 12,401 s.f. spec home located on Lot 405R which closed for $10,100,000 or $814/s.f. This fully furnished home represented the first sale over $10M in Mountain Village since 2008 and seemed to break the ice for sales and the contracting of other high-end homes in ski accessible locations. Also in February a 7 bedroom, 7 bath log and stone home with direct slope-side access closed for $5,250,000 or $682/s.f. An older log home built in 1994 closed for $2,300,000 on 129 Yellow Brick Rd which represented $544 per s.f. A Mountain Village home located near the golf course on 130 Arizona St. closed for $2,595,000 or $611 per square foot.
March showed strong activity in Telluride Condominiums with seven sales transacting for $13,761,000. The most notable sale was for the historic building once known as the Oak Street Inn. The property was completely gutted and remodeled into two spectacular condominiums that shared a common rec room, home theatre and wine room in addition to a guest apartment. The sale represented the highest price ever paid for an improved property in the Town of Telluride at $9,900,000 or $1,056 per s.f.
As you can see the prices per square foot have fluctuated dramatically from mid $400’s per s.f to over $1,000 per s.f. I believe this indicates that buyers who seek value can find it in a multitude of sectors in the market and are slowly absorbing what are considered to be the best deals in the market place. On the flipside, certain buyers are very specific in their criteria and are purchasing the best properties in the market that otherwise would not be available if not for the economic downturn. These upper end properties continue to hold their value and I believe buyers are realizing that this is the most advantageous time to secure a signature property in the Telluride region.
As the numbers show, the market is improving steadily. There will be opportunities this spring and summer for distressed properties, however these deals are being absorbed at a rate significantly quicker than 2009.
As of the 26th of April, five residences have closed and five are under contract and scheduled to close before month’s end. I anticipate the second quarter to be active with continuing absorption of the best values. I also anticipate a continuation of purchases of select high-end properties. The upper end of the market has received a significant amount of attention and I believe these showings will convert to sales this year as opposed to last year when this sector of the market was stagnant.
December & 2009 Year End Market Update
When reviewing the San Miguel County real estate market over the last ten years, “The Great Recession” of 2008/2009 has put a significant dent in annual growth evidenced by an 8% decline in dollar volume and 13% decline in number of sales. Keep in mind that there were significant spikes and declines throughout the last decade created by major economic and world-wide events. This was evidenced in 2001 through 2003 due to the tech crash and events of September 11th, which contributed to major declines in dollar volume; however, the number of sales started to rise because the lower priced inventory was more attractive and sold at a better pace than higher priced inventory. Impressive gains in dollar volume followed between the years of 2004 through 2007, however the number of sales started to decline as the value of properties started to rise. Fewer buyers could afford to participate in the market which contributed to the lower number of sales. Unfortunately, 2008 and 2009 were like nothing the market has ever experienced and were more similar to the low dollar volume and number of sales experienced in the early 1980s. All in all it was a rollercoaster ride throughout the last decade.
Regarding the last month of 2009, December posted another solid month of sales with $47.2M in total dollar volume based on 27 sales not including foreclosure sales. This represented a 94% gain over the same month in 2008 including an 8% increase in the number of sales. Including foreclosure sales, the total dollar volume was $49.3M based on 31 sales.
The overall change in dollar volume in 2009 for San Miguel County versus 2008 was negative 8% and negative 13% for the number of sales; however, dollar volume at the end of September was negative 44% not including foreclosure sales. In the last quarter of 2009 several large sales helped close the negative dollar volume gap by 36%, the most notable sales being the Peaks hotel at $20,000,000 (of which $17M was real estate) and the historic Town of Alta which closed for $16,000,000 on the last day of the year. The number of sales dropped 4% in the last quarter, which indicates that buyers continue to exercise caution.
During the month of December 2009, three condominiums closed in the Town of Telluride for a total of $1,996,000. Most notably Gold Dust Crossing Unit 5 closed for $1,250,000 or $870 per s.f. for a 2 bedroom, 2 bath unit. Two single family homes closed in the Town of Telluride for a total of $4,299,016; one being a foreclosure at $511 per square foot, and the other an in-family transaction at $1,011 per square foot.
Seven Mountain Village condominiums closed in Mountain Village for $11,162,000 primarily comprised of 5 Courcheval units that sold between $1,550,000 and $2,160,000. The six unit Courcheval project was purchased out of foreclosure in March of 2009, interior and exterior repairs were conducted to bring the units to saleable condition and five units were resold in December at significant discounts, averaging $458 per square foot. These new unfurnished units have a central Mountain Village core location with direct ski access.
Two Mountain Village homes closed for a total of $6,000,000 in December of which both were located in the golf course area of Mountain Village. These residences closed at $407 and $574 per square foot which reflects an 8% and 35% increase in value in the same neighborhood compared to the lowest price per square foot recorded in September of 2009 at $373 per square foot. I went out on a limb in my September Market Overview stating that I believed several sales around the $375 per s.f. range marked the bottom of the Mountain Village market. Three months later this statement continues to hold true.
To date, 18 properties have gone under contract in San Miguel County since January 1, 2010 comprised of 6 residences, 7 condominiums, 2 fractional condominiums and 3 vacant parcels. There are a significant number of properties (48) scheduled to close between now and March 31st. A good number of these properties are comprised of individual condominium/hotel rooms at the Peaks Resort and Spa. In the 31 days of January 2009, fifteen properties closed; so it appears that 2010 will start significantly better than one year ago.
November Market update
November posted huge gains over the same month in 2008 showing a 477% increase in dollar volume and a 150% increase in the number of transactions. The total dollar volume not including foreclosure sales was $35.2 million and the total dollar volume including foreclosure sales was $41.7 million versus $6.1 million in November of 2008. This significant month of sales helped bridge the overall gap in sales volume between 2009 and 2008 by 10% not including foreclosure sales.
The most prominent sale to take place was for the Peaks Resort and Spa which totaled $17,300,671 for the real estate only. There was also an additional $2,699,329 paid for furnishings, fixtures and proration’s for a total transaction value of $20,000,000. A group of local investors raised the capital which I believe bodes well for the region as these locals are dedicated to providing a superior hotel experience through a higher level service and greatly enhanced restaurants throughout the hotel. Local pride of ownership may bring this superb location the status it finally deserves.
Other areas that showed good activity were: Town of Telluride Single Family homes, two residences closed for a total $2,687,000. Five single family homes in San Miguel County closed for $7,399,079 including a prominent home in the Sunnyside Subdivision which closed for $4,500,000. Located on 35 acres, this newer 4 bedroom, 4.5 bath 5,568 square foot square log residence closed for $808 per square foot. Two vacant Mountain Village lots closed for a total of $3,055,500. Most significantly, Lot 413 closed for $1,892,500. Adjacent to Hood Park open space with private ski access to Galloping Goose ski trail, this sale enforces that areas of limited supply with quality locations in Mountain Village are holding value.
As real estate sales improved nationally in the fourth quarter, San Miguel County followed suit and as predicted by leading economists, we as a nation are slowly crawling out of this deep recession. I do believe that there is significant value yet to be realized in this market on all levels for buyers who purchase in the next 6 to 12 months. However, every month my list of great buys gets a little shorter and I hope that I can pass these opportunities on to the buyers who continually follow this market update. As you can see there is a developing trend that the best values are being snapped up with greater regularity.
October Market update
October proved to be a break-out month with $32.5 million in total sales comprised of 38 transactions. This was the highest producing month in 2009 (not including foreclosure sales). The total number of sales in October including foreclosure sales was $33.6 million. The month of October in 2009 improved 73% in overall sales volume and 6% in number of transactions compared to the same 31 days in October, 2008. The month of October helped bridge a 7% gap in overall dollar volume in year to date statistics compared to 2008. Through October 2009, the overall sales volume in San Miguel County was down 22% and the number of transactions was down 20% compared to 2008.
Individual market segments that showed improvement were: Town of Telluride condominiums/half duplex with 9 sales totaling $10,510,000. Two Town of Telluride single family homes closed for $810,000 and $3,400,000 with prices per square foot of $625 and $970 respectively. The latter residence closed in the Depot subdivision which is an excellent neighborhood in a prime location in Historic Telluride only one block from the gondola and chair 8. Again the old credo (as cliché as it may sound), location, location, location… providing proof that prime real estate in the best locations in the region continues to hold value.
Two three bedroom Mountain Village condominiums closed for $1,050,000 (Tristant Unit 106) and $2,225,000 (Dakota Place Unit 7) at $431 and $943 per square foot. Again, the unit closest to the core of Mountain Village with ski-in/ski-out access held its value best, selling at nearly $1,000 per square foot. Three Mountain Village homes closed for a total of $6,510,000 comprised of a $1,800,000 ($522 per s.f.) for a ski-in ski-out residence at Cabins on Gold Hill Subdivision; $2,310,000 ($576 per s.f.) for a home at 295 Adams Ranch Rd; and $2,400,000 ($451 per s.f.) for a residence located at 118 Rocky Rd. Interestingly, all three of these residences were spec homes that had moderate to distressed sellers. As I stated in my September report, I believed the sale of several spec residences in the golf course area of Mountain Village at approximately $375 per s.f. marked the bottom of the market. So far, through October $451 per s.f. is the lowest priced per square foot to sell in the same area of Mountain Village which is an increase of 16% over the lowest sales recorded in September. Time will tell if my September prediction of having hit bottom in this segment of the market holds true.
The economy is improving, especially in luxury sectors. Do I believe we are out of the woods? Not at all; however, there are fewer great deals as there were earlier this summer and this market has historically rebounded quickly from down markets once it gains momentum. If there is a great deal you have your eye on, don’t wait too long as the best inventory is being absorbed.
September Market update
September out-performed August of 2009 by 26% in overall sold dollar volume including foreclosure sales. The month ended at $22.2 million in sales of which there were four foreclosure sales totaling $5,700,000. A large portion of that number was made up of one particular sale on 159 Benchmark Drive which closed in the amount of $3,848,097. Backing out the foreclosure sales in September, the month ended at $16.5 million which was slightly ahead of overall dollar volume versus one month ago which had no foreclosure sales. There were a total of 32 sales in September which represented a 9% decline in number of sales versus September 2008. Through September 2009, the overall dollar volume year-to-date of $150.8 million was down 29% from $293.4 million in the same time period in 2008. The number of transactions year-to-date of 204 in 2009 was down 24% from 268 transactions that closed through September 2008.
As I mentioned in my July and August report, properties that offer ski access; in Mountain Village are typically holding value much better than those without ski access as evidenced again by a sale located in the Ridge Development of Mountain Village which closed for $3,436,135 or $874 per s.f. based on 3,930 s.f. This 4 bedroom 4.5 bath home was recently built with high-end finishes and superb views to the south and west of Wilson Peak and the La Sal Mountains in Utah.
Conversely, a new residence located on 249 Adams Ranch Road closed at $1,700,000 for 4,561 square feet which represents a sold price per square foot of $373. It does appear that the majority of significantly distressed real estate has been absorbed in this particular area of Mountain Village. I anticipate that if demand stays consistent throughout the upcoming winter months, prices per square foot in this area will rebound from these lows. Other significant sales that took place in the month of September included a residence in Aldasoro Ranch which closed for $2,873,000 for 5,218 square feet or $551 per square foot. A four bedroom Lodges on Sundance condominium closed for $1,550,000 or $435 per square foot based on 3,560 square feet. In addition, vacant land in Mountain village showed positive signs of activity with 4 sales totaling $2,782,296.
One factor that must be recognized when comparing overall sales volume and number of transactions in 2009 to 2008 in San Miguel County is the fact that the Telluride airport has been closed since April. Although it has significantly reduced the amount of tourists and potential buyers throughout the summer, I believe in the long run it was good for the region to take its medicine all at once. The airport is scheduled to open on November 4th, 2009 and by 2011 it may be cleared by the FAA to land a 76 passenger Bombardier Q400 twin engine aircraft. With more direct flights to Telluride this winter in combination with the newly opened Capella Hotel which offers the highest level of service to date in the region, I anticipate a steady influx of new buyers to Telluride over the next one to two years who may contribute to an increase in overall sales volume.
July and August Market Update
Typically I prefer to write my market updates once per month during the primary summer and winter selling seasons however, this July our family was blessed with the arrival of our second daughter near the end of the month, so needless to say it’s been a wonderful yet hectic summer. Due to our new addition, I have combined July with August plus I have added some preliminary news about September although the final sales numbers have not been posted.
July’s numbers did lag a bit as could be expected following the much improved month of June, however, August proved to be a very active month for showings and offers tendered. July closed the month with 19 sales including three foreclosures (comprised of $400,000) for a total dollar volume of $15.5M. This number represents a 38% decline from last July with the overall sales volume down 25% from 2008. Unlike other resort markets, foreclosures have and still represent a small fraction of San Miguel County’s overall market since the big downturn year one year ago.
Significant sales in the month of July included a vacant 35 acre lot in the exclusive subdivision of Sunnyside Ranch for $2,750,000. The sector of “county vacant Residential” showed a big increase in dollar volume closing the month at $3,217,400. Outlying properties often referred to as “Mesa” properties have fared well over the last year. I believe this is due to the fact that there was very little speculation in this aspect of the market place as the vast majority of buyers “purchased the dream”. Typically buyers hold mesa properties much longer and in many instances, pass these properties on to their children. Steady supply and demand economics have prevented this market from escalating too quickly or falling dramatically in value as some other areas in the region have experienced which were exposed to more speculative development.
A notable sale in July included the $6,750,000 sale of the original developer of the Telluride Ski Area’s personal residence in Mountain Village. This ranch style residence is situated on a 4 acre lot offering ski access, a private trout pond, meticulous landscaping and superb privacy yet a short walk to the core of Mountain Village. Originally contracted as a lease option in 2007, the tenants did a partial remodel in the interim before closing. Internal sources informed me that the original option price was re-negotiated to reflect the market downturn, yet at $1,269 per square foot, this sale still represents one of the three highest prices per square foot prices ever paid in Mountain Village. I believe this sale provides evidence that unique, un-replaceable properties will sell in even the most difficult conditions.
On the flip side a 4,501 square foot residence in the Adams Ranch area of Mountain Village (near the golf course) closed for $1,650,000 or $367 per square foot. This sale is a dichotomy of the aforementioned sale indicating that areas with abundance of supply, combined with highly motivated sellers, can be the effectuating cause of significantly discounted transactions.
The month of August was the first month since March to show a real up-tick in buyer interest with multiple showings of properties in all price categories. Regarding the August sales numbers (which are a reflection of early summer activity based on the length of time it takes to close transactions) 32 properties closed which was identical to August of 2008. Dollar volume was down in the amount of 39%. Overall dollar volume showed a 47% decline through the same time period last year and there were no foreclosure sales in August of 2009.
Significant sales in the month of August included a See Forever Penthouse in Mountain Village that closed for over $1,000 per s.f. See Forever Penthouses are arguably the best condominium product Mountain Village has to offer with unobstructed views, exquisite finishes plus the amenities of the Peaks Hotel and Golden Door Spa. The purchase price reflected a 23% discount off the asking price of $3,900,000. Again, quality product of a rare nature is showing evidence of holding value better than properties in locations that have significant amounts of inventory or do not offer ski slope access. In August, two residences located in the Adams Ranch area of Mountain Village closed at $383 per s.f and $389 per s.f. respectively with an additional sale in September of a 4,561 s.f. spec home at $373 per s.f. A ski access residence on San Joaquin closed in August at $633 per s.f. or $2,225,000, again reinforcing aforementioned statements made in relation to location and supply.
I am going to go out on a limb and predict that the sales in the Adams Ranch area could very well mark the bottom of the market in Mountain Village on a price per square foot basis. Unique selling conditions in this area of Mountain Village allowed for astute buyers to take advantage of prices per square foot that were well below replacement cost. Time will tell if this is an accurate prediction.
The town of Telluride experienced two residential sales in August, one of which was considered a land sale ($985,000) based on the condition of the older home that can be leveled in the future plus a sale in the amount of $2,000,000 for a remodeled residence on Colorado Ave. that closed at $818 per square foot. Two condominiums in the town of Telluride closed at $609 and $681 per square foot respectively which are solid sales for a one bedroom Muscatel unit at $392,500 and Columbine Unit C at $850,000.
Interestingly, the fractional market had a strong month with 9 sales at Club Telluride (Franz Klammer Lodge) totaling $1,112,000. Sales ranged in price from $80,000 for a 1/20th membership to $275,000 for a 1/5th membership.
Although the numbers are not posted for September, 23 MLS properties went under contract including 12 properties priced between $1,100,000 and $3,250,000. A listing of mine, River Ranch located on the West Fork of the Dolores River (which was reduced in price from $12,500,000 to $9,500,000) also went under contract further reinforcing that one-of-a-kind properties are garnering significant attention.
June Market Update
In my March Market overview I ended the segment by stating “Overall the market is showing some positive signs, the phones are ringing and Buyers are scheduling showings in this off-season, yet the numbers are lagging behind. It is my belief that the numbers will start to catch up and summer activity could be a catalyst for significant improvement.” That statement is proving to be somewhat prescient as June was up in Dollar Volume by 198% over June 2008 including foreclosure sales and 154% not including foreclosure sales. The number of transactions was up 21% over June 2008 including foreclosure sales and up 8% not including foreclosure sales. Year to date sales are off 23 % from 2008 including foreclosure sales and 49% from 2008, excluding foreclosure sales. This is a significant improvement over May which was down 41% including foreclosure sales so overall sale volume has closed the gap by 18%.
As always I believe it is important to dissect the sales information in order to identify what is selling. After looking closely at what made up the $26.9 million of June sales, $9.4 million in sales (all arms length) were made up of Mountain Village Non-residential sales that were predominantly commercial spaces and public use spaces such as the ice rink, plazas and corridors etc., purchased by the Town of Mountain Village from RAL Corp., owners of the new Capella Hotel project. There was also a $7,061,000 sale of mining claims located in the Ophir area to the Public Land Trust. This is a significant purchase that benefits the public as the environmentally sensitive area of Swamp Canyon is now protected in perpetuity from development. The Swamp Canyon area is one of the most popular hiking and back country use areas in San Miguel County. Although relevant because they are real sales, in my opinion these are not the type of sales that signify an upward trend in demand for single family homes, ranches, condominiums and land which have historically made up the bulk of transactions. In my opinion, it is these types of sales that will ultimately indicate a true recovery.
For an apples to apples comparison, the sales that are most relevant are as follows: An 1,818 acre ranch sold in the Norwood area for $2.6 million which was predominantly grazing land that sold for an average of $1,528 per acre. Two Mountain Village homes closed for a total of $5,550,000. Again a savvy purchaser took advantage of a very motivated seller that sold his slopeside residence at 29% off the asking price of $3,700,000 which closed for $2,650,000 or $572 per square foot. Another Mountain Village home was purchased out of foreclosure for $2.9 million. This is the first significant ski access home purchased by an individual out of foreclosure in Mountain Village in 2009.
Three Telluride Condominiums/half duplexes accounted for $2,650,000 in sales in June and four vacant residential sales in San Miguel County accounted for $2,810,000 of sales. Although this is positive news the most positive sign is that two Mountain Village homes contracted in the last week and the number of showings for all types of properties has increased dramatically. The level of interest and the number of buyers getting off the fence making offers and contracting properties is what I believe signifies a real upward trend and it is my opinion that August and September will be the months that will ultimately prove this.
If you are considering making a buying decision, you may not want to read about what transacted in the third and fourth quarters but participate as there are deals to be made that I have not seen since the late 1990’s. Why not take advantage of what may be the most affordable prices for many years to come?
April/May Market Update
Due to the shoulder season following the Telluride Ski Area season closure on April 12th, I have combined the months of April and May in this latest edition of my market overview.
As in March, April and May reported similar sold dollar volumes of $12,806,728 and $12,719,100 per month respectively. It should be noted that I have not added a $45,000,000 foreclosure sale in the month of March. That said, the numbers reflect an 81% and 34% decline in dollar volume respectively, compared to April and May in 2008 and a 19% and 50% decline in the number of transactions compared to the same months last year.
A number of small sales in addition to the first home sale in Aldasoro Ranch in 15 months made up the bulk of dollar volume in April. The Aldasoro home purchase was an exceptional buy for the purchasers who bought this fully furnished, superbly executed 4,985 s.f. 4 bedroom residence for $3,100,000 or $622 per square foot. An interesting FYI, three offers were tendered on this property within seven days after it was listed at $3,695,000. The home originally sold for $4,876,000 (unfurnished) in June of 2004. This proves that there are buyers waiting in the wings for the right opportunities. I was fortunate to be the listing and selling broker of the aforementioned transaction, and I believe it is prudent to be either on my or your favorite broker’s call list to inform you when the best opportunities arise.
If value is driving your buying decision, it is important to know that foreclosures don’t always represent the best opportunities. The amount of equity an owner has invested varies greatly from property to property in addition to the method of financing, either via traditional or unconventional lending sources. To date, major banks have been hesitant to discount the face value of their notes in this region, so short sales are not prevalent. If a distressed property is brought to your attention where the owner has more equity than usual or the lender has greater flexibility due to the nature of their portfolio, you may have a greater advantage in securing a significant discount. Your broker will know these nuances so stay in touch! As of today there are 44 properties in foreclosure of which only three are homes in Mountain Village. There are currently no homes in foreclosure in the Town of Telluride.
The month of May saw two notable home sales in Mountain Village, one directly slope side and one with ski access. The sale of 232 Benchmark was a superb buy as this newly constructed 5 bedroom spec home afforded all the bells and whistles on a slope side lot. Purchased for $4,650,000 this sale represented a price per square foot of $783 compared to $950 to over $1,000 per s.f range of similar sized, slope side homes in 2007. The second sale of a home on 304 Benchmark Drive is unique because I view this as a true retail sale not driven by distress or significant discounting. This newly constructed home sold for $4,200,000 on a .66 acre lot with excellent views but average ski access. This sale indicates that this buyer had a significant set of criteria in mind, most likely driven by the view and style of the home. At $788 per square foot I believe this property sold for what it should sell for in normal market conditions. This further indicates that this buyer chose to live the lifestyle now, in a quality home in Mountain Village and it appears their decision to stick with their specific criteria took precedence over finding the best deal.
This is a good example of finding the property most suited to your needs and striking the best deal possible in a buyer’s market, even if it’s not a distress sale.
March Market Update
March’s numbers are in a little late and at first blush, I thought wow, what an improvement, with overall dollar volume for the month at $57.6 million, a 150% increase over March of 2008. However after further scrutiny, the majority of that overall number is dominated by a $45,000,000 foreclosure sale of a group of significant development parcels in Mountain Village. Lots 126AR, 152R, OSP-118 Parcel B, Parcel C which were the future site of the Rosewood Hotel / Condominium project in addition to lot 129 which is an existing 6 unit Mountain Village condominium complex called Courcheval. A sale is a sale, however I believe in order for buyers and sellers who are using this overview to evaluate the overall health of the market, this sale should be put to the side. The total volume of sales in March 2009, less this aforementioned sale equals $12,573,651 which represents a 45% decline in dollar volume compared to March of the same time period in 2008 and the number of transactions was down 31% in the same time period.
Some good news is that Mountain Village condominiums had a strong month with $6,353,750 in sales. A new Townhome on the Creek at Tristant closed for $3,288,750 which represented a 21% discount from the asking price of $4,165,750 and two Belvedere Units closed at $1.3M and $1.35M respectively. These purchases were 24% - 32% off their respective asking prices of $1,695,000 and $1,985,000. A home located in the Trails Edge subdivision in Mountain Village closed at $2.1M which represented a 32% discount off the asking price of $3.1M. Again, 30% to 35% discounts are excellent, and if history repeats itself and the market rebounds, the buyers who have made the decisions to purchase now may prove to have made very prudent financial decisions.
As of this writing there are 35 properties county wide under contract for a total of $78,102,098 (asking prices). A condominium project in the Town of Telluride by the name of Element 52 makes up a large portion of this number with 16 units under contract representing $49M in pre sales based on asking prices. The project is about halfway completed, the majority of contracts are hard (non-refundable deposits) and the sold prices per foot should prove to be in excess of $1,000 per foot.
Single Family residences are starting to contract again with a notable property listed at $5.2M in Mountain Village scheduled to close in May. There are still many excellent values throughout San Miguel County. The seller’s that have demonstrated the best value within their market segment have been the one’s to sell their properties during these challenging times. Foreclosures of single family residences and condominiums continue to remain low with the total properties foreclosed in these categories representing less than 5% of the marketplace. Overall, the market is showing some positive signs, the phones are ringing and Buyers are scheduling showings in this off-season, yet the numbers are lagging behind. It is my belief that the numbers will start to catch up and summer activity could prove to be a catalyst for significant improvement.
February Market Update
The market is improving, albeit slowly, it is improving. February, 2009 sales in San Miguel County totaled $24.7 million based on 16 transactions compared to 12 transactions in January of 2009 totaling $16 million. Although the dollar volume compared to February 2008 was down 52% and the number of transactions were down 56% the activity in regards to amount of showings and offers tendered were significantly higher than the 30 days prior.
Buyers are still making very aggressive offers with very few takers. As I stated in my year end market overview “50% off asking price deals are not realistic, 30% to 35% deals are extraordinary (and should be taken advantage of) and 20% to 25% may reflect the true bottom line number of motivated sellers.” is proving to be an accurate statement. Of the 16 sales that occurred in March, 10 were free market properties actively listed in the Telluride MLS. Of those 10 properties (in which asking prices and selling prices can be tracked), the average discount from the original asking price to the selling price was 24%. The average discount from properties that already had been reduced in price compared to the eventual sold price was only 7.5%. The deepest discount was 41% for a 3 bedroom Rivercrown unit originally listed at $3,599,000 which closed for $2,120,000 and the shallowest discount was 8% for an $11.1M dollar residence located in the Gray Head Subdivision which closed for $10.1M.
March has already shown an uptick over February in the amount of showings and tendered offers with 13 properties under contract to date. A home in trails edge listed at $3.1M went under contract and there are offers swirling around the properties considered to be the best values in their market segments. Significant interest is evident in a variety of market segments ranging from low to mid priced condos, well priced ski-in/ski-out homes to the most exclusive properties in the region. I may not be writing about properties such as these going under contract in April but I surmise that by June, there will be a fair amount more to report on as far as significant deals going under contract are concerned.
There are quite a few buyers waiting in the wings and I believe if there is an uptick in confidence around the country, the best properties will get cherry picked. This month the stock market has responded favorably to the government’s unveiling of a concrete plan to offer private sector/government participation in purchasing toxic assets. This could be the first sign that the stimulus plan is gaining traction, and I hope that I can refer back to this month as one where things started to truly change for the better.
January Market Update
It surely is a new world that reveals itself in profound ways on a daily basis. Despite the continuing dismal economic news the beauty of the Telluride region keeps our spirits high. The ski season rolls forward with excellent snow conditions and our reservations have held within 10% of last year. In regards to real estate statistics, January has shown more of the same in terms of a decline in number of transactions and overall sales volume. January of 2009 resulted in 12 transactions throughout San Miguel County for a total of $16,000,000 in dollar volume. This equates to a 47% decline in dollar volume and a 59% decline in number of transactions versus the same 31 days in 2008.
The good news is that February has shown significant improvement marked by a $10,100,000 sale in the Gray Head subdivision for a 9,770 square foot home on 35 acres which sold for $1,034 per square foot. This is one of the most expensive homes to ever sell on a price per square foot basis in an outlying subdivision in the Telluride region. The list price of the home was $11,100,000 and the home sold at an 8% discount. Such a sale provides real evidence that Telluride is truly unique and buyers should gain confidence that a deal made now could prove to be a very fiscally sound decision in the future.
In regards to market segments with significant amounts of inventory, there are pockets of serious motivation and buyers have many options from a classic Victorian in town to a ski-in/ski-out condominium or residence in Mountain Village. Currently there are 67 homes for sale in the Town of Telluride priced between $995,000 and $8,900,000. Of those 67 homes, 51% have undergone a price reduction. In 2008, seventeen homes sold and assuming the same pace of sales in 2009 with no additional inventory added to the marketplace, this equates to 4 years of inventory.
Currently there are 70 homes for sale in Mountain Village ranging in price from to $995,000 to $14,900,000 with 10 sales in 2008. Assuming the same pace of sales in 2009 with no additional inventory, this equates to 7 years of inventory. Of these 70 listings, 34 have been reduced in price, equating to 49% of the marketplace. In a typical year, 35 to 40 homes will sell in Mountain Village, however early indications are that those levels of activity may not return until 2010 or later. Due to the difficulty in obtaining loans through traditional lending sources, a number of sellers have started to offer seller financing with excellent interest rates as many have significant equity in their homes.
In the nearby subdivisions of Aldasoro Ranch, Sunnyside Ranch, Ski Ranches, Elk Run, Preserve and Raspberry Patch, which represent a significant portion of the Telluride Real Estate market, there are 37 homes for sale ranging in price for $695,000 to $11,500,000 with eight sales in 2008. Of the 37 available properties for sale, 13 have undergone price reductions or 36% of the marketplace. Based on the same sales pace as 2008, this equates to 5 years of inventory.
Showing activity has picked up dramatically since President’s weekend and I anticipate seeing some of the better deals go under contract prior to the end of ski season. However, the aforementioned numbers enforce the fact that buyers are experiencing the most unique window of opportunity to purchase the best Telluride has to offer in a very long time.
As I always, I encourage you to contact me to help you find the best opportunities in your price point. Please feel free to peruse the rest of the web site for current important news in and around Telluride and special events.
Year End 2008 Market Update
Well 2008 is over, thank goodness and December’s numbers are in. If this were the stock market we would have an up day because although low, December beat expectations. December’s totals came in at $24,303,100 with 2008 finishing at $343,215,629 in dollar volume based on 339 sales. The overall dollar volume was slightly better than 2002 ($319,200,000) which was a very difficult year because of 9/11 concerns combined with the tech crash of 2001.
2009 has already shown some positive signs based on very busy Christmas Holiday that included numerous property showings and the contracting of an $11.1M dollar home in the Gray Head subdivision. Many low contracts were submitted and buyers are getting the signal that 50% off deals are not going to fly, however there are serious pockets of motivation and transactions in the range of 30% to 35% off the asking price for select properties are possible.
It seems popular of late for interested buyers to equate our real estate market with the stock market. As you know, the stock market has priced-in an incredible amount of bad news. In many ways so has the Telluride Real Estate market. There have been price reductions occurring well before the big stock market downturn in October and some properties are reflecting price per square foot numbers on par with 2002. The stock market is still incredibly volatile and if the market does rise you don’t have to chase stocks because there is always a good one around the corner. The same can’t be said for quality real estate. Some of our best listings in the region have been reduced quite far and once they sell, it’s an opportunity lost.
Other buyer sentiment of late is "I’ll wait until there is extreme bank pressure or the property goes into foreclosure". Currently there are only 21 foreclosures on the books right now and out of those 21, five are properties that the majority of clientele reading this overview may express an interest in. These low numbers of foreclosures indicate that a high majority of sellers in this region can withstand the current negative economic pressures. On an interesting foreclosure note, Bank of America recently rejected short sale bids for a very prominent piece of vacant property in the Telluride Region and is only interested in bids that reflect the face value of the note. This indicates that the most prominent bank in the United States is bullish enough on quality Telluride real estate to refuse a short sale bid, will sell only at face value of the note or they will wait to market the property at a higher price at a future date. As it turns out, this particular property has gone under contract today for the face value of the note which is 11% off what the original purchase price was in 2001 and 28% off what is considered fair market value. Although this is one sale, it does lend credence that 50% off asking price deals are not realistic, 30% to 35% deals are extraordinary (and should be taken advantage of) and 20% to 25% may reflect the true bottom line number of motivated sellers.
What does this mean for you if you a prospective buyer? It means that there is an open window right now but that window may start to close sooner than you think. After the inauguration, all indications are that President Obama will outline a concise plan to improve the economy in addition to implementing the biggest stimulation package yet. This should create a new found confidence in this country which should start to move our economy in a positive direction. Economists predict a third quarter turn-around and if this is the case, those who anticipate this turn-around now will most likely be rewarded in the future.
Unlike main street America, Telluride can take a turn for the better quicker than other markets because of the unique nature of its real estate. On an ending note I recently spoke with a client who told me "regardless of what my property is worth today, spending Christmas in the snow with my 5 year old was worth every penny". I hope you are able to take advantage of one the best opportunities to buy in a long, long time and I look forward to directing you to the best values currently available within our marketplace. As always, I welcome your questions and comments.
November Market Update
As always, I strive to provide you an accurate picture of the Telluride Real Estate market. As the nation is entrenched in this economic downturn, Telluride (which historically has been insulated during difficult economic downturns over the last 20 years) is feeling the same ill effects. Our current situation is somewhat compounded because of our unique location. Our out of the way location is a double edge sword, it’s why so many love this place however it takes a greater amount of time money and effort to get here. Because of this we experience longer shoulder seasons which create longer stretches of inactivity. The question we as brokers are trying to answer: Is this lengthy period a naturally slow time or is business slower than we think? I think it is a combination of both and the lack of activity weighs more heavily towards a dismal economy.
Lack of volume provides a cloudy picture of the market because we don’t have enough comparable sales information to prove if property values across the board have declined and if so, at what percentage. I would venture to say that yes, values have dropped. However, it is not possible to place an accurate percentage of how much decline has taken place. Just as I would not use a comparable sale that is perceived as an anomaly on the high-end of a property that a buyer “had to have” I don’t believe it is accurate to use a distressed sale as an indicator on the low-end either. There will be distress sales that will reflect a 30% or more discount, however there will be sales that will be within 10 to 15% off list price. My recommendation is; be the buyer who acted on a 30% reduction.
This segues into: How important is purchasing the property you want versus getting a great deal on something you will settle for? You can buy a stock on any given day but you can’t always buy the piece of real estate you want on any given day. The property you want in Telluride may not have undergone a significant price reduction but you may be able to negotiate the best deal for yourself similar to values 5 years ago.
I truly believe that fear blocks one’s ability to manifest opportunity. Fear has crept into everyone’s psyche. How could you not be fearful when money markets were in danger of not returning par in early October? However, government intervention has helped stabilize that fear and the stock market has experienced some positive days of late. As fear wanes and there is a reversal towards cautious optimism, your psyche should open up to what’s possible. What’s possible is a lifestyle that rewards you physically, mentally and spiritually. Times like these are good for us because they make us re-evaluate what is important. Without drought we can’t appreciate moisture.
When I started my real estate career in 1986 the majority of buyers bought mountain property to enhance their lifestyles. The attitude for many was “if it appreciates great, but my life is appreciating and that’s more important”. The majority of those buyers continue to live in the mountains part time, some full time and all have enhanced their lives greatly from partaking in such a unique lifestyle. Organically, monetary appreciation followed but the purchase decisions were life based, not investment based. The paradigm started to shift as monetary appreciation began to over-shadow life appreciation. Buyers’ psyches started to shift towards a higher emphasis on making money rather than enjoying the mountains for what they have to offer.
I believe what is currently happening helps us focus on placing life appreciation ahead of monetary appreciation. It helps us focus on what is truly important; good health, mental clarity and a full spirit. I am so glad I live in Telluride during these slow times because to get some perspective all I have to do is take my daughter for a stroll or go skiing. When I take in the immense beauty that surrounds me, I know that I live in a special place that provides my spirit so much more than monetary appreciation could ever provide. I invested in life appreciation when I moved to the Rocky Mountains in 1979 and it is the greatest investment I have ever made. Now might be the time to invest in your life and let the fear of trying to time the bottom prevent you from realizing a great opportunity. Maybe this is the paradigm shift you have been waiting for.
I will ski tomorrow morning for a couple of hours, Telluride’s new lift accessing Revelation opened with 17” of new snow! Being in an environment like that makes me feel right about every real estate investment I have ever made in Telluride, no matter if I bought in a seller’s market or a buyer’s market. It’s about enjoying life every available moment; the rest of it has always taken care of itself.
See our Black Bar menu above for Current Market Statistics for Telluride, Mountain Village, Remaining County and San Miguel County.
Market Report statistics are driven by information from Telluride Consulting.
237 S. OAK ST. • P.O. BOX 37 • TELLURIDE, CO 81435 • (970) 369-5322 DIRECT • STEVEC@TELLURIDEPROPERTIES.COM