CURRENT TELLURIDE REAL ESTATE MARKET CONDITIONS
Updated November 2015
The 2014 Telluride Real Estate Market outdid each of the previous six years and was the best Real Estate sales year since Pre-Recession. 2015 has sustained this sizzling pace through the first half of the year, but has dipped slightly as we prepare for the upcoming 2015-16 ski season. The town of Telluride activity is still robust, but the overall sales volume in both number of transactions and dollar volume of this market segment are down due to an overall lack of inventory. Overall, the 2014 Sales year eclipsed 2013 by an impressive 48% in Dollar Volume and 28% in Number of Transactions.
With 2015 Telluride Regional Real Estate cruising along and up 5% in number of transactions, and off just 13% in dollar volume, it is good to see sustained action in the town of Telluride despite lower inventories, as well as increased activity in the remainder of San Miguel County. Soon we will see reservation agreements transfer to contracts at the new Downtown Telluride Ajax Hotel and other projects in the pipeline include the final phase of 7 Owl Meadows units and the duplex development at the corner of Aspen and Pacific Streets. The Hotel Madeline property continues to sell, as does Cassidy Ridge and the Villas at Cortina. Even better is the activity in vacant residential land sales in San Miguel County (does not include Mountain Village or town of Telluride) in the first quarter of 2015, with the number of transactions up 375%. Wow, but can we increase the activity to return to the pre-recession sales levels of land?
A few quick year to date market highlights: the re-awakening of the 35 acre luxurious land market with 5 sales and 2 contracts at Gray Head, Sunnyside, Diamond Ranch and West Meadows, San Miguel County Residential Home and Land market increasing year to date over 2014 by over 29%, the Telluride Ski Ranches closing multiple properties at historically high levels, and vacant town of Telluride land sales increasing by an impressive 180% over the previous year.
Specific single property sales highlights in 2015 are: A Main Street Wintercrown Penthouse re-selling in two years at a whopping increase of 110%, closing at $3,450,000, the $9 million sale of a hotel development site in Downtown Telluride, the $8.1 million sale of a hotel site adjacent to the Mountain Village Gondola, the Telluride Ski Resort purchase of the commercial areas of the Peaks Resort and Spa, 538 Benchmark Drive closing at $1,035 per square foot in Mountain Village, and the town of Telluride residential sale at 602 West Columbia closing for $1,167 per square foot.
The biggest question as we further examine the local marketplace: Will Buyers accept that prices are still going up and the investment necessary to be member of Telluride community has increased and in some cases significantly? Bank owned sales, short sales and highly motivated Sellers are increasingly uncommon, unless it is a Mesa property.
Telluride’s remote location and overall lack of inventory combined with unmatched lifestyle has turned our entire market from negative to positive, in dollar volume, number of transactions and most importantly the mental perception that many Buyers and Sellers have.
All of these strong indicators have eliminated any talk of the bottom of the market, because we hit the bottom 3-4 years ago. After seeing 2014 hit solid numbers and 2015 close to sustaining that pace, it has been determined that improved property submarkets have rebounded favorably off the bottom and some are even approaching historically high levels. There are continued diminishing sales in our marketplace that reflect a variety of desperate Sellers. The only exception to this is the vacant land segment, but we continue to see that market segment shifting positively. What is now encumbering that segment and keeping it from getting hot is the availability of contractors and subcontractors to build homes affordably. At an approximate cost of $400-$500 per square foot to build, the cost may not be more affordable than buying an existing older home, except in the town of Telluride and in most cases this is also true in Mountain Village. With the improved luxury subdivision sales burst, this segment will offer opportunities to build below market values of recently sold properties.
Confidence from Buyers continues to increase because of these recent positive indicators that are now sustained. Unless you want to purchase raw land, the investment levels for owning in Telluride are increasing by the season. The “low-ball” offer is almost extinct. The majority of strong Sellers who are not forced to sell and own a high level of equity in their Telluride property are now being rewarded.
Buyers want one of two things, which confirm our market conditions. The first is lifestyle and the historic town of Telluride provides an incredible lifestyle to enjoy for primary and second homeowners that no other locale can offer. Small, unique, authentic, uncrowded, luxurious, charming, funky, numerous resort amenities, festivals and culture, are just a few of the attributes. Find me another resort that has all of what the Telluride Region can offer? And people are paying a premium for this. The second is value. And there is a balance between the two, but the priority shift is now favored well towards lifestyle. Buyers will live away from the charm to get the value, but now are a longer drive away.
As you look at the past 10 years, the sales pace of 2005-2007 may be on the near horizon; as 2014 fell just 30% below the average dollar volume of that timeframe, vs 53% from 2013.
The summary for both Buyers and Sellers has changed in a far more positive direction for Sellers with less and less availability in excellent values. If a property has a high level of quality, uniqueness, desirable location, features and amenities, then Buyers continue to prove time and time again, that they will “step up” to pay top dollar, and have exceeded traditional top of the market pricing. Buyers that are less selective can still find deals out there, but the discounts are not as severe. Land is the last category left where Buyers are getting upwards of 40-50% off pre-recession pricing, but many of that product is 15+ miles outside of the resort. Telluride continues to have the “IT” factor in both a Ski Resort and summer destination, and Buyers need to act fast, or be prepared to invest more down the road. Once again Telluride is at the top of Resort Rankings as we head into the 2015-16 Ski Season. We are #1 in Conde Nast Traveler. We are #4 in Ski Magazine Readers Survey. We are #2 in US News and World Report. Impressive rankings that continue to get the word out, about Telluride.