2013 was a transitional year for the upper Roaring Fork Valley real estate market — a year of stabilization and balance in some areas, and clear growth in others. We’re still finalizing our analyses (look for the comprehensive big picture in our 2013 ASPEN REPORT, out in February) — but here are some of our initial findings…
In a nutshell, there are now 9% fewer sellers and 6% more buyers, who are spending 5% less money in Aspen, Snowmass Village, and Basalt than they were a year ago. So how does that speak to the strength of the market?
“It puts upward pressure on prices,” says Michael Adams , of our company and senior number cruncher. More buyers than sellers makes prices rise over time, Michael explains, “and in general, rising prices are a positive market force.” In fact, we found that the average price per square foot stabilized and turned upward in 2013. Rising 7.5%, it was the largest growth in prices since 2007.
In addition, discounts off of list prices have been the lowest since 2008, ranging between 5-9% in all three communities. Key resort indicators also trended upward last year. In Aspen and Snowmass Village combined, the number of sales, dollar volume, and average price per square foot were all trending in the right direction. (Even though there was a slight dip in total dollar volume, it was focused in the luxury segment of the market, and it wasn’t enough to turn down the trendline, explains Michael.)
The biggest winners of 2013, in terms of transaction volume, dollar volume, and/or price per square foot were condominiums in Aspen’s core and in Snowmass Village, and somewhat surprisingly, Snowmass off-mountain homes (meaning not ski-accessible…ski-accessible homes in Snowmass Village actually fell in all these indicators, an anomaly that really doesn’t concern us, but requires more explanation than is the intention of this blog).
Even so, the 5% drop in spending that we mentioned should be clarified. Because of the huge prices involved, the luxury market — defined as over $7.5 million — can greatly skew statistics. For example, in 2013, a $44 million sale in the Snowmass area, if included with the other 26 home sales there, raises the average home sale price by $1.6 million! This is one reason we’re reporting the luxury market separately, and it’s also one example of the danger of hastily gathered statistics. It’s what led Mark Twain to pen that there were “lies, damned lies, and statistics.”
Separating out the upper end of the market “reveals some healthy growth in the overall market,” says Michael. So while market indicators appear to be down for single-family homes in general last year, homes under $7.5 million actually showed 7% more sales, 12% drops in average discount, 9% fewer days on the market, and a 2% rise in price per square foot.
“It’s a better look at what the market is really doing,” says Michael.
To show how much the upper tier of the market can distort the picture, there were 389 sales under $7.5 million in Aspen last year (up 28%), for a total dollar volume of $673 million (up 9%). The over-$7.5 million segment included just 22 sales (down 27%), but a whopping $291 million in dollar volume (down $85 million, or 23%). Note that those 22 sales accounted for nearly a third of the total home sales volume in 2013.
Gary Feldman, one of our company’s brokers who specializes in luxury properties, agrees that the high end of the market is its own animal. ”The ultra-luxury market sets its own pace,” says Gary, who discussed this segment in more detail in one of our December posts. “When they feel it’s time to buy, they buy. They’re more market leaders than market lemmings.”
There were 14 home sales over $10 million in 2013, compared to 17 in 2012, says Gary, although “you have to put an asterisk on that.” While the luxury market was technically down in 2013, changes in the present tax code, anticipated in 2012, led to a flurry of high-dollar sales at the end of that year. “Without that, many more deals would have closed in 2013,” he noted.
According to Gary, 2013 was essentially a continuation of Aspen’s luxury market rebound, and the gap continues to narrow between what buyers in that range are willing to pay versus what sellers are willing to take. ”When the gap is fairly small, then you have an active marketplace,” he says. It’s a market worth watching. Although inventory is going down, there remain 67 properties for sale over $10 million, with 25 of those listed at $20 million or more.
[Source: http://theaspenskinny.com/2014/01/31/aspen2013-by-the-numbers-2/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+TheAspenSkinny+%28the+Aspen+skinny%29 - Photo by BJ Adams and Company]
Posted by Brooke on
February 03, 2014 in