Updated May 2014
The 2014 Telluride Real Estate Market is off to a brisk start. Each of the first four months of 2014 has considerably exceeded the same time period in 2013. We are even starting to see considerable activity in the current Spring Off-Season. What are the statistics in 2014 to this point and where is Telluride headed?
Overall the numbers are extremely encouraging.
April 2014 was up a staggering 119% as compared to 2013. March was up 43% in dollar volume as compared to 2013. February was up 25% as compared to 2013, and January was up an eye- popping 116%. Just excellent news for the market!
With 2013 well behind us, it is interesting to note, that as compared to 2012, overall dollar Volume in Mountain Village was off 13%, the Town of Telluride was flat and the other sales for the remaining San Miguel County were off 6%. But as compared to 2014? Year to Date (April 30) most segments are positive vs. 2013.
As we further examine the local marketplace, we expect to see in the summer and fall of 2014 that the Telluride, Colorado Real Estate market continues to get healthier by stabilizing at or close to the current sales pace. The only items that can slow us down are a lack of inventory in the Town of Telluride, and Buyers accepting increased pricing levels with a shrinking inventory of Mountain Village Condominiums.
At this point, early in 2014, the highlight sale was Oprah Winfrey’s $10+ million purchase of a large Trail Side parcel in Mountain Village, off of the Marmot Ski Trail. We also expect to see the Hotel Madeline sold off by Ekortnet/SwedBank, after taking closed bids in March, further adding confidence to the market. The first Spec Home in quite some time has contracted in the Ski Ranches. High end condominiums and homes continue to move off of the shelf in the town of Telluride at pre-recession prices. The Mountain Village residential market is on pace to triple its bleak numbers from 2012.
As of April 30, 2014, Town of Telluride Condo sales are up 63%, Town of Telluride Home sales are up 57%.
After a high level of absorption with 77 sales in 2013, it was expected that Mountain Village Condominium sales would slow down as prices climbed. That is the case with Year to Date 2014 condo sales in Mountain Village being off by 13%. Home sales in Mountain Village are off, but the current contracts, when closed later this year, will reverse this trend.
Finally the brisk action in late 2012 and 2013 of these two segments (houses in historic Telluride and condominiums in Mountain Village) has translated into movement and interest by others. And what could be most impressive in regards to our marketplace, all home sales outside of the Town of Telluride and Mountain Village (In San Miguel County) are up 53%!
As predicted in previous summaries, because of Telluride’s remote location and overall lack of inventory, it has not taken a lot of sales activity to turn our entire market from negative to positive, both in dollar volume and the mental perception that many Buyers and Sellers have. The residential town of Telluride is as strong as it’s ever been with five sales at over $1,000 per square foot in 2013, and so far in 2014 we have seen 6 homes and condominiums close in town at over $900 per square foot. There currently are no homes currently listed for sale under $1 million in Historic Telluride.
All of these strong indicators have led to the bottom of market being reached in many categories. Buyers and Sellers still ask me all of the time: Did we “hit the bottom?” After seeing the start of 2014 hitting solid numbers, it is easier to determine, and more and more submarkets have rebounded well off the bottom and some are even approaching historically high levels. There will still be sales in our marketplace that reflect a variety of desperate Sellers, including Short Sales and Bank Owned/REO properties that will continue to set the bar very low, and offer bargains for the deal hunters. The bottom of certain market segments has been found, and the rebound as already occurred in the entire market in the town of Telluride, Mountain Village Condominiums, Ski Ranches Homes and Lots, and the outlying homes on the Mesas, specifically, Iron Springs, Horsefly and Wilson Mesa. However, great recession pricing opportunities still exist in most Land segments and select homes and condominiums in Mountain Village.
Confidence from Buyers has increased for the first time in many years, because of these recent positive indicators that are somewhat sustained. We are now in a mixed real estate market with some Buyers concerned they missed the bottom, some in denial and still waiting for a bottom, while others want to enjoy the Telluride Lifestyle now and are willing to invest for the long haul. Personally
my business has seen the fluctuations in offers and sales where lowball offers are being ignored, others negotiated as high as possible and Buyers making offers at 2007 and 2008 pricing. It’s still a “box of chocolates” as Buyers attempt to purchase properties at unreasonable prices. The majority of strong Sellers who are not forced to sell and own a high level of equity in their Telluride property still result in a stalemate at the higher end of the pricing scale.
Buyers seem to 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, luxurious, charming, funky, numerous resort amenities, festivals and culture, are just a few of the attributes. And people will pay a premium for this. The second is value. A luxurious Mountain Village trail side townhome at under $400 per square foot? A large acreage mesa timber frame home at $100 per square foot just thirty minutes to town? A large ski in/ski out on grade luxurious residence with big mountain range views at under $600 per square foot? These are all proven values that we have not seen in over a decade and sold this past year.
As you look at the Annual Dollar Volume and Number of Transactions in the past 10 years, one thing is evident. We are still well off the pace of 2004-2007, both in dollar volume and number of transactions. But, what markets that had steep real estate appreciation since the mid to late 1990’s did not fall into the same pattern?
The summary for both Buyers and Sellers is starting to change in a 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 have proven time and time again, that they will “step up” to pay top dollar. Buyers that are less picky, can still find deals out there at up to 40% off the high market times, but will sacrifice something for the inherent value, for example, a stripped bank owned sale, no ski access, high density complex or subdivision, quick cash closing, as well as many other factors.