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Bob Ritchie

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Aspen Ski Company Aquires Mammoth Resorts

by Bob Ritchie

Mammoth Resorts has entered into a definitive agreement to be acquired by a newly formed entity controlled by affiliates of the Aspen Skiing Company, L.L.C. and KSL Capital Partners, LLC. A Starwood Capital Group controlled affiliate owns a majority interest in Mammoth Resorts.

Mammoth Resorts is a great operator with a large California footprint. They operate Mammoth Mountain, June Mountain, Snow Summit, Bear Mountain and several hospitality properties as well as two golf courses. Mammoth Lakes is a vibrant community on a year round basis, offering alpine and freestyle on-snow camps well into June. Their extensive mountain biking trail system attracts visitors all summer and their close proximity to Yosemite National Park is also a big draw. Just as importantly, these resorts have distinct personalities stemming from their early days as fledgling resorts, creating a strong sense of place that is alive and well.

Considering these attributes in the context of the Intrawest deal, the strength of this overall combination is clear. While the details of how Aspen Skiing Company will collaborate with this collection of amazing resorts will be worked out over the coming months, they share a common passion for the mountains and for our communities. 

Aspen Ski Company Aquires Intrawest Resort Holdings

by Bob Ritchie

Aspen Skiing Company (Skico) has been announced that they have partnered with an affiliate of KSL Capital Partners, LLC (KSL) to acquire Intrawest Resort Holdings. Together, they are forming a new entity to acquire an incredible collection of resorts.  Intrawest, headquartered in Denver, owns Steamboat and operates Winter Park in Colorado. The company also has several resorts in the East, including Snowshoe, WV, Stratton Mountain, VT, Mont Tremblant, Quebec, Blue Mountain, Ontario, as well as Canadian Mountain Holidays, British Columbia, and the management of several condominium hotel properties.

Aspen Skiing Company will continue to be operated separately from Intrawest and Squaw, but will work together in areas that make sense.

2016 Real Estate Market Analysis

by Bob Ritchie

2016 Real Estate Market Analysis

Aspen’s beautiful and busy Summer was followed by a fantastic start to the ski season with early total snowfall reaching 200% of normal. Aspen’s Total Real Estate Sales Dollar Volume recovered from down about 50% in the Spring of 2016 to end the year down just 32%.  The town’s activity, retail sales tax collections, restaurants, hotels, cultural venues, long and short term rentals, etc.,  are at record levels. The Ski Company, Ideas Fest, Fortune Forum, Aspen Music Festival, the Art Museum, Non-Profits…. across the board all had a great year, and Aspen hosts the World Cup Finals March 17th.

The sale of the Monarch Penthouse set a new record of $4,250/sf in February 2016.

The sale of the Dancing Bear Penthouse late in the year at $5,000/sf unfinished, set a new record high,

it is now listed at $10,000/sf finished.

After the election, every month’s total Real Estate Sales have exceeded the previous year’s. 

All this great news from a 4 Mountain Ski and Cultural mecca that does not make you wait in lift lines.

 

Current Market Forces

1. From 2014 through 2016, several well healed developers purchased, repositioned, remodeled, and rebuilt a significant percentage of Aspens’ prime residential and commercial building sites, tear downs, and fix and flips. These redevelopment projects focused first on the prime West End, Red Mountain, and Core locations with activity in 2016 moving into adjacent neighborhoods. Due to Aspens, higher price structure Buyers are beginning to look into areas in which prices have not recovered from their 2008 highs such as some surrounding neighborhoods, Starwood, Down Valley and parts of Snowmass.

​Snowmass Real Estate will experience a boost as Base Village sold to a partnership which includes Aspen Ski Company and East West Partners. They are planning starts of three projects this year which will break the ice of a 8-year halt to the million-square foot project that dominates Snowmass. The first crane is to go up this April.

Aspen’s prices jumped ahead from 2014-2016. Buyers who also faced disruptive US elections, news of terror attacks, and shifting geopolitics took a break in the first half of 2016. After the election, the Trump Effect took hold of the stock markets and Buyers became very active, we had a near record 4th quarter, a great January, and currently under contract properties total $320,000,000.

2. Aspens’ Downtown Downzoning will eliminate residential uses, lower building heights to 28’ add employee housing requirements… in all there are 8 ways Aspen City Council is saying “no more downtown development”. After the 17 currently approved and exempt projects are built there will be nothing new built downtown until the codes change.

Aspen Home Sales in 2016 vs 2015

Total # of homes sold were 55 (2016) vs 109 in (2015)

Homes under $5.0M = 24 properties (2016) vs 40 properties in (2015)
Homes from $5.0M to $10.0M = 19 properties (2016) vs 43 properties in (2015)

Homes over $10.0M = 12 properties (2016) vs 26 properties in (2015)

Snowmass 2016 home and condominium average sales prices were up a few % and the number of sales were down slightly. The down valley markets were slightly stronger than last year.

2017 Forecast

Aspen’s fantastic world class amenities are driving a sales recovery, we will likely look back on 2016's lull as a missed buying opportunity.

Reasons to buy now are;

1. Lifestyle, there is no better community in which to safely live, raise your family, visit or vacation. No other place has the combination of Aspen’s accessibility, natural beauty, cultural, educational, and recreational amenities.

2. Inventory is still very high, we are in a Buyers’ Market for properties 5 years old and older, with many options and motivated Sellers

3. Historically values in Aspen do not drop in recessions (the 2008 recession was the first decrease since at least the 1960s) making Aspen a historically excellent place to store and accumulate wealth.

4. Worldwide upheavals will continue driving tourism and more Buyers to Aspen.

5. Interest rates are extremely low.

6. With the average 2016 Aspen home sale at $6.6M, and the average lot sale at $5M, as a backdrop, the additional new much higher permit fees, new very high employee mitigation fees, and high hard and soft construction costs, will force New Product asking prices much higher.

7. Many older properties are priced well below replacement value.​

Expect the high end of the Aspen Real Estate Market to improve in the near future driven by Aspen’s unique amenities, popularity, Buyers’ high levels of liquidity, their aversion to the risks and fluctuations of the stock and bond markets, the $3 Billion post-election jump in stock market value, and Buyers’ acceptance of the fact that new product will be at prices higher than the current inventory.

Please feel free to contact me to discuss any and all Real Estate matters, I look forward to assisting you.

Sincerely,

Robert Ritchie

Broker, Aspen Snowmass Sotheby’s International Realty

bob@rdritchie.com, 970-379-1500

The statistics used in this document are from the Aspen Glenwood MLS, Land Title Guarantee, and the Aspen Times. The opinions are my own. Buyers and Sellers should do their own research to validate their thoughts and decisions. 

Aspen retailers haul in more than $700 million in 2016!

by Bob Ritchie

Aspen retailers in 2016 outperformed the previous year's sales volume by 6 percent, accounting for nearly $15 million in sales tax proceeds pumped into city coffers.

That's according to the city Finance Department's Consumption Tax Report for 2016 that was releasedTuesday.

Led by the lodging industry, which rang up nearly $209 million in sales last year, retailers registered nearly $714 million in sales in 2016 (see factbox).

December sales helped buoy that figure with almost $108 million in revenue, a 3 percent improvement over December 2015, according to the report.

"December generally accounts for roughly 15 percent of the entire year's sales and collections," noted Finance Director Don Taylor in the report.

The city sales tax collections last year were 4 percent higher than the $14.3 million that was budgeted. The figure also extended the trend of continued increases in sales tax collections, which were $14 million in 2015, $13.1 million in 2014, $11.8 million in 2013, $11.1 million in 2012, $10.5 million in 2011 and $9.8 million in 2010, the report shows.

The city's 2 percent lodging tax collections were higher as well, finishing the year 9 percent better than 2015.

The 1.5 percent lodging tax, which benefits the city's marketing efforts, hauled in $2.6 million last year, compared with $2.4 million in 2015, $2.2 million in 2014, $1.9 million in 2013, $1.8 million in 2012, and $1.6 million in 2011.

The 0.5 percent portion of the tax, which helps support the city's Transportation Department, brought in $878,776 last year, compared with $797,432 in 2015, $721,296 in 2014, $638,832 in 2013, $592,071 in 2012, and $533,228 in 2011, according to the report.

2016 Mid Year Real Estate Market Analysis

by Robert Ritchie

2016 Mid Year Real Estate Market Analysis

It has been a beautiful and busy Summer thus far in Aspen, the only cloud is that Aspens’ Market wide YTD Total Sales Dollar Volume is down about 50% from 2015s'.  The Buyers are here, the town is full, from the streets, to the restaurants, to the hotels, the Cultural and recreational venues, to the long and short term rentals.  The Ideas Fest, the Fortune Forum, the Aspen Music Festival, across the board all are having great years.

Sales Tax Revenues are at all-time highs for nearly every month and for the year to date.  

The sale of the Monarch Penthouse set a new sales record of $4,250/sf in February 2016.

Home and Condominium Sold Prices per Square Foot are up 10%-13% in 2016  


As of July 31, 2016 YTD Total # of homes sold in Aspen were 17 (2016) vs 49 (2015)

Home and Condominium Sold Prices per Square Foot are up 10%-13% in 2016

In Aspen as of July 31, 2016 YTD;

Sold homes under $5.0M = 4 properties (2016) vs. 23 properties (2015)
Sold homes from $5.0M to $10.0M = 8 properties (2016) vs 16 properties (2015)

Sold homes over $10.0M = 5 properties (2016) vs 10 properties (2015) 

 

Snowmass home and condominium average sales prices are up about 10% and the number of sales are down slightly. The down valley markets are stronger than last year.


A number of factors are driving our market to this atypical condition;

  1. In 2014 and 2015, two parties purchased and repositioned a significant percentage of Aspens’ prime residential and commercial building sites, tear downs, and fix and flips. These purchases accelerated Aspens recovery cycle causing our price structure to jump ahead by probably two years.   We skipped the normal dispersed, orderly progression of absorption, construction, inventory adjustment, and gradual price increases.
  2. Macro issues are impacting our buyers and sellers, they are uneasy about the ramifications of the November US elections, terror attacks, geopolitics, and recent worldwide elections which rejected the status quo in numerous countries. 
  3. Prices jumped and inventory grew from late 2014 into 2016. New and older inventory came on the market at prices higher than anticipated. Sellers have always liked to set their prices above their neighbors as they like their own property more, and recently they are additionally more aggressive due to the recent jump to higher listing and sales prices. The Sellers are ignoring the lack of sales volume.
  4. The new developments built during the recession were absorbed by the market in 2015. 
  5. The remaining new and older product that were listed too high and passed over by 2015 buyers does not look any better this year. 
  6. Many potential Buyers are renting or staying with friends instead of buying
  7. The new under construction inventory is significant, but higher land costs, much higher permit fees, new very high employee mitigation fees, and high hard construction costs, have driven asking prices much higher. New product will be priced higher.
  8. Many Sellers are not very motivated as they do not know what they would do with the funds if they sold.
  9. Aspen’s Luxury feeder markets in New York, Miami, Los Angeles, Texas and London are experiencing sales slowdowns at the high end of their markets.

Aspen’s fantastic world class amenities will drive a sales volume recovery in the future, we may look back on 2016's lull as a missed buying opportunity.

Reasons to buy now are;

  1. Lifestyle, as most Aspenites have more money than time, and there is no better community in which to safely live, raise your family, visit or vacation. No other place has the combination of accessability, natural beauty, cultural, educational, and recreational amenities.
  2. Inventory is still very high yielding many options and those interested in selling are often more negotiable after the Summer high season.
  3. Historically values in Aspen do not drop in recessions (the 2008 recession was the first decrease since at least the 1960s) making Aspen an excellent place to store wealth.
  4. European terror attacks are driving tourism to the US, we expect this to yield more worldwide Buyers.
  5. Interest rates are extremely low.

We expect the high end of the Aspen Real Estate Market to improve in the near future driven by Aspen’s unique amenities, popularity, Buyers’ high levels of liquidity, their aversion to the risks and fluctuations of the stock and bond markets, and Buyers’ acceptance of the fact that new product will be at prices higher than the current inventory.

Displaying blog entries 1-5 of 5

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Robert Ritchie
Aspen Snowmass Sotheby's International Realty
300 South Spring Street
Aspen CO 81611
970-379-1500
Sotheby’s International Realty® is a registered trademark licensed to
Sotheby’s International Realty Affiliates LLC.
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