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.