Written by Brian O’Neill, Director
Year-end figures show Telluride’s dollar volume of sales equaling 2008 and lagging behind 2012 by only 6%, a result of brisk sales at the end of 2012 due to impending tax law changes. This stability in our market mirrored other ski towns such as Vail, Aspen and Jackson Hole. Bolstering the market were sales of Mountain Village condos, Town condos and homes in Telluride. All three categories have recovered to near pre-recession numbers in terms of transaction volume with homes in Town also nearing 2006/2007 prices. Holding the market back were the sales of MV homes with only 8 sales in 2013 versus 23 in 2012.
Home sales in Town and MV tend to be cyclical and right now buyers prefer Town. MV home sales may have suffered due to low snow years but other forces may have had a greater impact. The average age of a home in MV is 12 years while many MV condos are much newer with a more mountain modern style and lower prices due to high inventories. The average price of homes on the market in MV is 30% higher than the average price of the 8 homes sold in 2013. The lesson here is that the most desirable location will not sell a home at the wrong price. Location affects the value of a home, but it is price that sells a home. As these homeowners tire of waiting for the market to come to them, prices may be lowered and these big-ticket items will have a dramatic effect on the market.
This slowdown in the upper end of the market is not limited to Telluride. Aspen reports that product over $10m dropped 36% in dollar volume from 2013 to 2012 and the mid range luxury market of $3-7.5m dropped 17%. Jackson Hole’s over $3m product fell 18% in dollar volume while Vail’s over $4m product fell 15%. All of these markets total sales volume lagged slightly from last year also likely due to impending tax law changes and the slowdown of the upper end market.
What is also notable in all four ski resort markets is that inventories have shrunk, some dramatically. This has led to some gentle appreciation in select market segments such as homes in the Town of Telluride and the lower end of the Aspen, Vail and Jackson Hole markets. Yet the selling process remains challenging and competitive despite shrinking inventories because there still remains quite a bit of inventory and competition between listings. There is an expectation that overall prices will rise because inventories have fallen but exactly when that happens is still a mystery. This is probably making the process of selling more difficult due to a standoff between seller’s expectations of rising prices and buyer’s recognition that the reality does not indicate otherwise. As this plays out buyers will continue to hold out.
As luxury real estate demand continues to rise in markets such as New York, Miami and London, ski resort markets will soon follow. A potential tipping point will be the continued sale of newer built inventory at premium prices and those comps will begin to affect the market by slowly increasing prices. Until then, value will continue to rule the day as buyers flock to properties priced well in the best locations.
Telluride has cause for optimism with over 130″ of snow this year, an increase in air service passengers of 11% during the Holidays, a 10% lodging increase and general sense of optimism from locals and guests as snow continues to fall and the economy continues to stabilize and improve. This feeling is continually reinforced as Telluride is constantly recognized as one of the top ski resorts and towns by numerous publications including Conde Nast, Outside, Powder, Men’s Fitness, Ski and more.
Telluride Properties has maintained its goal of “being the best, not the biggest” in 2013 with 9% of the of the brokerage community garnering 25% of the market share. Here are some of our 2013 highlights:
- Highest Residential Home Sale in the Town- Brian O’Neill & Steve Cieciuch
- Highest Priced Home Sale in Aldasoro- Mike Shimkonis
- Highest Price Per Square Foot for a Home in Town- Jesse DiFiore
- Highest Priced Condo Sale in Town- Brian O’Neill
- Highest Price per Square Foot Home & Condo Sale in Mountain Village- Brian O’Neill
- Highest Priced Land Sale in Idarado Legacy- Brian O’Neill & Steve Cieciuch
- Highest Priced Residential Land Sale in Town- Brian O’Neill
- Second Highest Priced Single Family Land Sale in MV- Brian O’Neill
- Second Highest Priced Home Sold in the Region- Brian O’Neill & Steve Cieciuch
- Third Highest Priced Home in MV- Steve Cieciuch
- Third Highest Priced Condo Sale in Town- Damon Demas
- Fourth Highest Priced Home in MV- Aric Maloy
- Fourth Highest Priced Home in Town- Kiki Froberg
- Most Developer Sales in Region- Brian O’Neill