About $39.4 million worth of real estate changed hands in Pitkin County in July, according to a report released Friday by Land Title Guarantee Company. That’s nearly half of the $74 million that changed hands in July 2010, and well shy of the 2007 peak of $162 million. July’s 43 transactions were two more than were concluded the same month the previous year, and also well shy of the peak in the most recent real estate cycle, which was 118 transactions in 2005.
Most industry watchers say it’s far too soon to discern any sort of trend from these numbers, but 2011 has been anything but predictable. Dollar volume has been as high as 136 percent above the same month in 2010, and now as low as 47 percent under.
Year-to-date statistics for Pitkin County are a little steadier: dollar volume is up 16 percent over 2010, while the number of transactions is up 12 percent. But while the average single-family home price in Pitkin County in July, at $4.7 million, was up 7 percent, the median single-family home price, $3.1 million, was down 3 percent.
The first half of the year was characterized by numerous high-end sales, a trend that began in early 2010—but June, without the two largest sales, would have been about even with last year. In July, the highest-dollar sale was $4.7 million; there were a total of 32 sales above $5 million, and 14 sales over $10 million, in the first half of the year. And other than the fact that there happened to be a lot of them in the last year or so, it’s almost impossible to slot those extreme luxury transactions into any trends because the buyers and sellers seem impervious to most market forces.
“Properties that were selling at $5, $10, $15 million were previously on the market for $15, $20, $30 million, so those owners can afford to drop the price by 30 percent,” noted Bennett Bramson, a broker with the Fleisher Company and incoming President of the Aspen Board of Realtors.
July’s slowdown can also be attributed in part to the debt-ceiling debate, which reached a fevered pitch that month before it was resolved in early August.
“People were on hold again with real estate,” said Bramson, who added that while the debt ceiling debate itself may not have had a completely adverse affect on its own, “it was compounded immediately by what happened in the stock market,” which tanked in early August. “So the polarizing effect of politics does have an effect on the real estate market.”
Bramson is one of those people who doesn’t believe the local real estate market is on an upswing quite yet, partially because it’s been such a roller coaster. Using his own experience as an example, he said he would feel an upswing for about two months in which he’d close four or five deals, but then hardly get a phone call for the next month.
“I’m leaning toward not so much a further drop, but just kind of rolling along the bottom before seeing some kind of substantive movement,” Bramson said.
Due to the traditionally slower fall and winter showing seasons, Bramson doesn’t see a recovery until the spring of 2012, “and part of that had to do with the primaries.”
Valleywide, the real estate market is still seeing a lot of deep discounting, said Bramson. While the average discount might be in the 10-15 percent range, it’s not unusual to see discounts of 40-50 percent, upvalley and down. Bramson cited one example of an Old Snowmass home that once changed hands for $10.9 million and is now under $4 million. Those types of anomalies show what people were willing to pay at the height of the market, but also show that the local market is still subject to wild fluctuations.
But because sales are all over the map, there’s still quite a bit of uncertainty on the part of some sellers how to price properties. Some brokers encourage their clients to list their desired sales price, but Bramson said he’s turned down half a dozen listings recently. With an unrealistic sales price, he said, he would have to spend substantial time and money marketing the properties with little chance of movement.
“It used to take two months to sell a property; many brokers were simply order-takers,” he said. “But the inventory that was going off the shelf in 60 days in 2008 is now more than a year on the market.”
Meanwhile, both transaction volume and dollar volume continues to rise in Garfield County, with bank sales continuing to be the dominant influence in that market.
At $27.4 million in 83 transactions, Garfield County saw its highest dollar volume of the year in July—nearly 11 percent higher than July 2010. The number of transactions was 20 percent higher than the same month last year.
Garfield County’s year-to-date dollar volume from real estate sales is up 16 percent, while the number of sales is up 26 percent.
More than one-third of the sales in July, however, were bank sales—representing about one-fifth of the dollar volume. That’s about even with the number and dollar volume of bank sales year to date.
“We’re seeing the market leveling a bit because we’re trying to get rid of so much of the distressed inventory,” said Bramson.
The large number of bank sales is having a compound effect on the downvalley market. On the one hand, it’s resulting in a large number of transactions. On the other hand, it’s driving prices down even among non-bank transactions. Bramson gave the example of a home in Aspen Equestrian Estates that closed in July for $490,000. The last time it changed hands, at the height of the boom, it did so for $1,575,000. So far this year, 82 percent of Garfield County sales have been under $400,000.
Garfield County’s average and median single-family home price are both down 19 percent down from 2010—the average is $314,000 while the median price is $240,000. Parachute has seen the largest drop—$144,000 this year compared to $250,000 in 2010, a 43 percent decrease. Glenwood has been the closest to steady—homes are selling on average for $371,000 this year, compared to $403,000 last year (an 8 percent dip).
To put that into perspective, the average single-family home price in Garfield County at the peak of the real estate boom was $455,800, in 2007.
Finally, Garfield County saw an uptick in commercial activity in July, with eight total sales totaling $9 million. Of note was a $2.275 million sale for a commercial building in West Glenwood.
But there’s a dearth of prime commercial space in Garfield County, and commercial rates throughout the valley are at historic lows—meaning that an uptick one month may not spell any kind of trend. In Aspen, commercial leases that were going for $180 per square foot are now as low as $60 per square foot in the commercial core, and $40 per square foot outside of it. Offices in Basalt are leasing for around $12 per foot, even less in the Midvalley Design Center.
The dichotomies and swings of the local real estate market make it difficult to pinpoint where it stands in the national picture, which this month is looking increasingly gloomy with the dips in the DOW and the unemployment rate remaining flat.
Bramson, who considers himself an optimist and likes to project that optimism to people, uses the local papers’ classifieds section as an informal barometer. And there are far more want ads in the local papers than there were in the last two years, he pointed out. In terms of real estate, Aspen and its environs will always have an appeal that few places on earth have, and that doesn’t change with economic and political swings.
“A double-dip recession may be on the way, but how that impacts our market it’s difficult to tell,” he said.
July transactions at a glance
PITKIN COUNTY
- Dollar volume: $39,375,261
- Number of transactions: 43
- Decrease from July 2010 (dollar volume): 47%
- Increase over July 2010 (transaction volume) 5%
- Year-to-date dollar volume: $748,946,473 (16% increase)
- Year-to-date transactions: 432 (12% increase)
- Bank sales: Four sales, $3.5 million (9% of sales, 9% of dollar volume)
- Year-to-date bank sales: 40, $27.1 million (10% of sales, 4% of dollar volume)
- Average single-family home price: $4.7 million (up 7%)
- Median single-family home price: $3.1 million (down 3 %)
- Fractional sales: 11 (8% decrease from July 2010)
- Fractional dollar volume: $5.3 million (11% decrease from July 2010)
- Year-to-date fractional sales: 134 (33% increase over 2010)
- Fractional dollar volume: $61 million (5% increase over 2010)
GARFIELD COUNTY
- Dollar volume: $27,370,900
- Number of transactions: 83
- Increase over July 2010 (dollar volume): 10.77%
- Increase over July 2010 (transaction volume) 20.29%
- Year-to-date dollar volume: $153,978,000 (16% increase)
- Year-to-date transactions: 489 (26% increase)
- Bank sales: 29 sales, $5.9 million (37% of sales and 21% of dollar volume)
- Year-to-date bank sales: 182, $32.9 million (37% of transactions, 21% of dollar volume)
- Average single-family home price: $314,009 (down 19%)
- Median single-family home price: $240,000 (down 19%)
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