Mega-mansion Deals Spur Rebound in Aspen Market, GJS
By Dennis Webb, Sun.July 17, 2011, Business Section, Grand Junction
Sentinel (the newspaper is subscription based so article is
posted here in its entirety)
Click article image above for pdf : At $6.5 million, the property on the left was the
most expensive townhome sale in Aspen for the first half of the year, said Aspen broker Tim Estin photographed here regarding the sale he closed three weeks ago
but the owner originally had asked $9.95...The townhome pictured on the right, completed in 2008, closed in June at $6.425M and had been on the market almost 3 yrs originally at approx. $11.5M.
ASPEN REAL ESTATE - Got $10 million or $20 million in loose change jingling in your pocket?
It’s a great time to get a good deal on a mansion in Aspen.
High-end real estate sales are helping lead a recovery in this resort for the uber-rich.
Or as Tim Estin, broker associate at Mason Morse in Aspen, put it in his [AspenRealEstateBlog.com], earlier this year, “It is well-known that the wealthy come back into the market first, and they usually get the good deals.”
Said Mason Morse owner Bob Starodoj, “I think what we normally see
in a recovery is the high-end sales activity first because those people
feel secure economically before anybody else does. They are able to move
into the market.”
In a new [Estin Report: 1st Half 2011 State of the Aspen Market], released this week, Estin reported there were 11 sales of properties for $10 million or more
in the Aspen area for the first half of the year, versus four during the
same period last year. Andrew Ernemann, a broker associate at BJ Adams
and Co., reported in his July 1 market update that one of every four
single-family home sales in Aspen the first half of the year was for $10
million or more, more than double the average over the past five years.
“This fact alone is a clear indicator that Aspen continues to appeal
to the world’s wealthy, and that buyers at the top end of the real
estate food chain are investing in the local real estate market in
greater proportions than even the best years of the last market run,”
Ernemann wrote.
Indeed, international buyers also are participating in the high-end
buying spree. And while $10 million or more doesn’t sound like much of a
deal, even for an Aspen trophy home, many of these buyers have been
taking advantage of deep discounts from originally listed prices.
“I do think the pricing on these homes is better than it has been in
a number of years,” said Maureen Stapleton, a broker at Morris &
Fyrwald Sotheby’s International Realty.
Tommy Mottola, former head of Sony Music Entertainment, sold his
property in Wildcat Ranch, a development involving actor Michael Douglas
outside Aspen, for $17.75 million in January. That was for about $10
million less than he asked when he put it on the market the previous
July.
Some other transactions this year included price drops (from
original asking price to sale price) of $32 million to $16 million,
$29.95 million to $20 million, and $21 million to $16 million, according
to Estin. In all three of those cases, the properties were on the
market more than 600 days.
Further enhancing the pricing for some buyers has been the low value
of the dollar compared to other currencies. That has expanded the price
discount for buyers from places such as Australia, Russia/Eastern
Europe, Brazil and New Zealand, Estin said.
“The international factor is probably overstated, but they are players in the market,” he said in an interview.
Estin said he’d guess foreigners probably make up 20 to 25 percent
of high-end buyers. Stapleton said she’s not currently aware of any
foreigners who are shopping for Aspen properties.
“Europe goes on vacation in August, so I think September will be a good time to ask me that question,” she said.
Estin said southern hemisphere buyers such as Australians are
particularly attracted to the Aspen market because they can take a long
winter ski trip during what is their summer.
“It’s perfect with kids out of school, and they can be here for a block of time,” he said.
Foreign or domestic, high-end home buyers in the Aspen area are
picking up properties that real estate agents say are priced at levels
reflecting their one-of-a-kind qualities.
Said Stapleton, “It’s usually very unique locations or large
acreages or very large square-footage, newer construction. Some of the
best architects and designers are involved in the construction of these
homes.”
Views, privacy and access to town often are considerations, she
said. Frequently, such special properties are passed down to future
generations, making them all the harder to come by, Stapleton said.
Estin said the homes tend to be as big as 15,000 square feet, and
they may have hard-to-get zoning and amenities such as great water
rights. That was the case for billionaire and hedge fund manager John
Paulson, who last year bought a new, $24.5 million Aspen home that
included 180-degree views, abundant water rights and high-alpine lakes,
Estin said.
“One of the calculations in that purchase is: What are the water rights worth and what are the lakes worth?” he said.
While the mega-mansion sales attract the attention, real estate
experts say the market is recovering at less pricey (for Aspen, anyway)
levels as well, again because of buyer interest in taking advantage of
deals not available in years past.
For the first half of the year, Estin reports, Aspen home sales
overall are up 45 percent. Almost half were sold for less than $4
million, compared with 32 percent for the first half of last year,
reflecting the lower prices and buyer willingness to capitalize on it,
he says. The average price per square foot for single-family Aspen homes
is down 21 percent from the 2007–08 market peak.
Said Stapleton, “I think every segment of the market seems pretty
good right now. … People want to be here in Aspen/Snowmass (Village),
and I think they sense that this might be a good time to consider buying
because of the pricing.”
“Aspen is unquestionably leading a local real estate recovery,” Ernemann said in his market update.
But how soon other areas will follow remains a question mark.
Heading down the Roaring Fork Valley to places such as Basalt,
Carbondale and Glenwood Springs, factors such as foreclosures and high
unemployment continue to weigh down the market.
Said Estin, “There’s some amazing bargains, and there’s quite a bit
of hardship midvalley, so buyers are stepping up, but the prices are an
unbelievable discount from what we’re used to.”
