Market Update – “Just a Gut Feeling?”
Over the past few weeks and months I’ve read and heard all kinds of things about the local real estate market, “Worst month for resort real estate in years”, or “2011 ends the year flat”, and “Buyers better make a move now because the market has turned”, and so on. How can a buyer or seller in the market these days possibly know what information is correct and what is just “broker” talk or irresponsible news reporting?
In the spirit of full disclosure, I am a “broker” so I encourage you to use that context to evaluate anything I put forth. I am also a data freak and fanatical about understanding exactly what trends are taking place, and what trends are about to start taking place in the Aspen/Snowmass real estate market. I regularly ask people, “Would you invest $1 million, or even $5-10 million or more with an investment advisor you didn’t absolutely trust?” Real estate prices in Aspen/Snowmass make this question directly relevant to my business.
So, with that preface in mind here we go. I gather all sorts of real estate information, and when it comes to answering the most basic question of “how the Aspen/Snowmass real estate market is faring” I have found the most relevant markers to pay attention to are Condo/Townhome, Single Family and Residential Land market activity. Fractional ownership and Commercial real estate have their own behaviors and market dynamics that often diverge from the pulse of the residential real estate market for various reasons.
In very simple terms, the overall Number of Sales for Aspen, Snowmass Village and Basalt was up 30% between 2010 and 2011. That is a significant increase. And digging a little deeper, the Number of Sales was up about half that jump in Aspen (15%), but more than double that increase in Basalt (65%); Snowmass Village saw a solid increase in sales as well (32%). Can you already see how a broad-based headline could be misleading? Although real estate sales were up 30% across the three towns, the increase varied from 15% to 65%!
Another trend people like to follow is Sales Dollar Volume. The Total Sales Dollar Volume for Condo/Townhouse, Single Family and Land sales was up 13% from 2010 to 2011 in Aspen, Snowmass Village and Basalt. Again, this doesn’t tell the whole story, Dollar Volume was up in Aspen (15%), down in Snowmass Village (-9.3%) and up in Basalt (64%). It gets better, even though Sales Dollar Volume was down in Snowmass Village, it was up for Snowmass Village Condos by 67% – it’s just that Single Family and Land sales in Snowmass Village were down by enough to bring the total to a level below 2010.
At the risk of delving too far into the numbers, I’m going to stop here. If you need to take one piece of information away from this column, let it be the fact that the local real estate market is unquestionably recovering. Certain property types and neighborhoods are outperforming others, and I expect prices to start rising in the short term in some areas, while others will take another 12-24 months before some strength returns to the market. All this and more is included in my annual real estate report, The Big Red Book (www.AspenUpdate.com). While others may assemble data or report on the local real estate market without all the facts, I certainly don’t rely just on a “gut feeling”.
Note: this column appeared in the Aspen Times “Inside Business” section on January 23, 2012.
