The real estate winds are shifting
By Mike Russo
Real estate figures released by Land Title for the first quarter of 2008 in Pitkin County show that we are experiencing a new trend in the Aspen/Snowmass market. Transactions through the first quarter were down 33 percent from last year and sales volume was down 52 percent.
Given that volume has seen a greater decline than transactions, we conclude that current purchases are at a lower aver­age sales price than last year.
The average purchase price in Pitkin County for the first quarter of 2007 was $2.44 million versus $1.73 million for the first quarter of 2008. Compare that to the first quarter of 2006 when the average pur­chase price in Pitkin County was $926,505. Also worth noting is that during the record sales year of 2006, the market experienced five times the amount of closed transactions in the fractional con­dominium market. During the first quarter of 2006, fractional sales accounted for 16 percent of the total volume versus a paltry 3 percent in the first quarter of 2007.
Although sales volume is off, compared to a record first quarter of 2007, it is off to a lesser degree compared to 2005 and 2006. The volume difference is -17 percent and -23 percent, respectively.
The blaze of sales volume that occurred in the first quarter of 2007 represented 30 percent of the sales volume reported for the entire year. Going back to 2003, the average percentage of yearly sales volume has been 19 percent in the first quarter.
Although the year did not finish like a lion, 2007 was still the second best year on record, finishing the year at $2.5 billion, about 4.5 percent less than 2006.
So what does it all mean? The real estate market in our valley is still vibrant and not in the dire straits that some observers suggest. We are still seeing a large number of consumers looking to purchase property in the Aspen/Snowmass market.
The challenge in the marketplace today is the disparity between buyers and sell­ers. With news of the threatening reces­sion, a credit crisis that remains tenuous at best, followed by a national housing crisis and inflationary fears, among other con­cerns, the Aspen valley market continues to hold its ground in pricing.
A recent seller of a home in Wildcat Ridge exemplified the Aspen real estate market when he was quoted nearly two years ago in the Wall Street Journal as say­ing,“ If we don’t get the right price, we won’t sell.”
So how has the wind shifted? Of the 207 consumers that chose to purchase in Pitkin County this year, they decided they still wanted a property in our county, but on average decided to spend less than the buyers of last year.
(Michael S. Russo is president of Aspen Sotheby’s International Realty He can be reached at mike.russo@sothebysrealty.com.)

THE SKY IS FALLING, THE SKY IS FALLING…….This has been the battle cry we have been hearing due to the national housing markets. Everyone is trying to peer into our numbers and say the Aspen/Roaring Fork Valley market is declining. What has been falling is snow. We have had over 100 inches in December which has made for a very strong holiday season.

Pitkin County/Aspen have posted numbers through November of $2.32 billion, which is $60mm short of the sales volume through November of 2006. We are expecting December to come in with about $180 mm in sales which will bring our year to about $2.5 billion and about $130 mm less than 2006 overall.

The newspapers have been talking about the decline in transactions by about 30%. This number counts fractional sales which is a moving target in our market. The sales in Pitkin County for whole ownership are down about 12%. While the numbers would suggest a steep decline in fractional sales, I believe that is another anomaly.

Fractional sales showed record volumes in 2006 based on years of pre-sales with the Hyatt. We have had a number of transactions go under contract for the Residence at Little Nell and the Dancing Bear that will not show in our transaction numbers or sales volume until the projects are complete and the contracts closed. When the contracts of The Residence at Little Nell close they alone will represent over $300 mm in sales volume. The amount of sales from that project alone would represent 11.5% of the sales volume of our best year ever in 2006.

Our market has seen the highest number of $10 mm plus sales in 2007 with 19 transactions. We have also experienced appreciation on a sq. foot basis ranging from 13% in the Central Core of Aspen to 17% in Snowmass Village.

While 2007 represented a 12% decline in whole ownership transactions and a slight decline in sales volume it still represented the second best year in Aspen real estate history. There is a lot of buzz in the Aspen market with a large influx of international money and we are expecting another solid year of price appreciation in our market.

“Video provided by Plum TV”

Mike Russo, president of Aspen Land & Homes/Sotheby’s International Realty, stopped by the MNN set to talk about Aspen’s unique real estate market.

We have a multitude of numbers to discuss in this real estate report. The June numbers from Land Title have just arrived. The reports are consistent with what we have discussed all year.

Through June, Pitkin County has a sales volume of $1.46 billion, representing a 13.8% increase over last year. After the first quarter transactions were down versus the prior year by 40%. The market has seen some increase in transactions, but Pitkin County is still off by 32% versus 2006 through June. It will take until the end of the 3rd quarter to see if the transaction numbers start to even out.

Garfield County is still showing an increase in volume of 30% over the prior year, with an increase in transactions of 15% and a total sales volume of $565 mm. The majority of transactions and sales volume is still supported primarily by Carbondale, Glenwood Springs, and Rifle.

We have developed a comprehensive set of statistical data to help any buyer and seller. For more detailed information please contact one of our brokers or send an e-mail to mike.russo@sothebysrealty.com.

Aspen Land & Homes Sotheby’s International Realty announced its exclusive sponsorship of The Buddy Program’s annual fundraising gala “Boogie’s Bash for the Buddies” to be held July 5. Sponsorship also includes underwriting the upcoming “Be an Artist for an Afternoon” event on May 10. In addition, its brokers will also participate in the Buddy Program Community Partnership.

The Buddy Program Community Partnership pairs big and little buddies throughout the school year. The Aspen Land & Homes brokers will be paired with elementary or middle-school children, and will meet every week for an hour at the children’s schools.

Additionally, Aspen Land & Homes is underwriting the cost of materials to the “Be an Artist for an Afternoon” event, another buddy-pair activity, hosted by artist Elisa Ahmers at The Red Brick Center for the Arts on May 10. Aspen Land & Homes will create souvenir decks of playing cards, using the artwork from the activity for the annual fundraising gala.

For more information about Aspen Land & Homes Sotheby’s International Realty, call (970) 925-1730 or visit www.aspenlandandhomes.com.

IS FRACTIONAL OWNERSHIP FOR YOU?

Fractional Ownership is the fastest growing segment in resort real estate and makes sense for most people. The following are a few key reasons fractional ownership is the fastest growing segment in resort real estate.

• Your investment is balanced with usage.
• It’s hassle-free ownership.
• Luxury services & modern amenities.
• Reciprocity to other club & hotel locations.
• Fractional ownership is an investment.

Here are just a few of the very important discovery questions we ask each client through their decision making process:

1. How often do you vacation every year? Do you consistently vacation at least 2-4 weeks a year?
2. Do you tend to come back to Aspen year after year? If so, how many years have you been coming to Aspen?
3. Do you plan to continue to vacation in Aspen?
4. Where do you typically stay? Are you always satisfied with your accommodations?
5. Do you travel with family and friends? How many people are usually in your party?
6. Do you typically vacation the same time or week(s) each year?
7. Do you have children in school? What are their vacation schedules
8. Do you enjoy the services and amenities whenever you stay at a fine hotel?
9. When you vacation, would you enjoy having all the creature comforts of home?

Lisa Hatem has assisted over 500 families purchase their fractional real estate homes here in Aspen. There are many fractional real estate opportunities in Aspen/Snowmass, and they’re all very different. Let Lisa put her 10 years of valuable experience and extensive knowledge in fractional real estate to work for you. We will find the best fit for your family’s present and future vacation needs. For more information contact Lisa at 970.948.8370 or e-mail at lisa.hatem@sothebysrealty.com.

Your vacation time is the most valuable time in life. It’s what you work hard for all year! Memories of vacation time with family will be cherished forever. Assure that each and every vacation is the best it can be with fractional ownership.

Our focus at Aspen Land & Homes Sotheby’s International Realty is to help our customers make informed decisions. Over the last few months we have been reporting market statistics on Pitkin and Garfield Counties. In this post we are providing a further breakdown of what is happening in the market. If you would like further detailed information please contact one of our brokers or e-mail at contact.us@aspenlandandhomes.com.

The Central Core of Aspen has experienced staggering growth over the last few years. The market is being driven by basic supply and demand economics. In 2006, the Central Core experienced a 31% price appreciation. Year-to-Date through June 1st the market has already had price appreciation of 14%. The Compound Average Growth Rate since 2002 is 14%.

Basalt, the one time bedroom community of Aspen, has experienced phenomenal growth over the last few years. Last year the Basalt market had a 22% growth in price appreciation. This year the market has already surpassed this number with price appreciation of 23% YTD. The Compound Average Growth Rate since 2002 for Basalt is a steady 15%.

The oil and gas business had definetly helped the numbers in Rifle, CO. There market is experiencing a severe home shortage on the I-70 corridor. In 2006, Rifle’s price appreciation was a negative 12%. This year it has recovered with a remarkable 28% YTD appreciation. The Compound Average Growth Rate since 2003 is 9%.

Compound Average Growth Rate (CAGR) - The year-over-year growth rate of an investment over a specified period of time. CAGR isn’t the actual return in reality. It’s an imaginary number that describes the rate at which an investment would have grown if it grew at a steady rate. You can think of CAGR as a way to smooth out the returns.

Our company is representing one of the most discussed developments in the mid-valley. Below is a brief overview of the Shadowrock development. We will be providing more detailed information about the development in upcoming posts. Contact Jennifer Neary at 970-471-6200 or Tom Banner at 970-390-9708 for additional information.

Shadowrock

An exciting new development is well underway in the heart of the Roaring Fork Valley. The first foundations have been poured and framing is in progress on the first luxury townhomes of Shadowrock. Sales have been exceptionally strong with over two-thirds of Phase I already sold out.

Four distinct floor plans are offered at Shadowrock which range in size from 1,664 to 2,596 square feet and range from 3 to 4 bedrooms. Select residences also include media/family rooms that are pre-wired for the latest technology and will be complete with wet bars. The interior finishes for the residences have been selected by the renowned design firm, Slifer Designs. Standard finishes include solid oak hardwood flooring and 100% wool carpet, knotty alder solid-core interior doors, base & case and cabinetry, slab granite kitchen countertops with slate or travertine backsplashes, stainless steel appliances, slab marble master bath countertops and euro-glass shower enclosures. The residences will be climate controlled with gas-forced air heating and multi-zone air-conditioning. In addition to the exceptional standard finish options, a number of upgrade options will also be available. The exteriors of the residences at Shadowrock will be comprised of natural dry-stack stone, Hardie siding and cedar board and batten.

Shadowrock is located in El Jebel and primary access to the development will be from Highway 82 at the Willits Lane intersection where the fourth leg of the stoplight will be added. Secondary access will be off of El Jebel Road.

The April numbers for Pitkin and Garfield Counties are hot off the press from Land Title.

The April sales volume from Pitkin County showed a decline of 4.8%. We had our first monthly increase in the number of transactions at 3.5% over last year. The cumulative sales volume through April is still very strong. The market has already reached almost a billion dollars in sales, which is a 41.99% increase over last year. Aspen had the largest volume of sales representing 51% of the sales for the county.

Garfield County is holding strong with a sales volume increase of 47% over April of last year. Through April the sales volume and number of transactions is up 35.4% and 18.7% respectively. The sales volume of Garfield County was lead by Carbondale, Glenwood Springs, New Castle, and Rifle. The four towns represented 84% of the sales volume for Garfield County.

If you would like more detailed statistics please feel free to send me an e-mail at mike.russo@sothebysrealty.com