April saw the largest dollar volume in transactions for Pitkin County real estate this year, a new report shows, bolstered in part by billionaire Roman Abramovich’s $36.375 million home purchase in Snowmass.
By Troy Hooper, May 15, 2008 Aspen Daily News
The number of transactions last month, 88, also picked up in April when compared to March, which saw a relatively anemic 48 transactions, according to a report Land Title Guarantee Company issued this week.
Even so, the report, which is based on transactions recorded with the county, reflected the cracks that began to surface in the local real estate foundation last fall and have continued into this year. Even though last month’s real estate dollar volume and transactions moved in a positive direction relative to other months this year that preceded it, April dollar volume was still down 32 percent compared to April 2007 and the number of transactions last month was down 35 percent compared to April 2007, the report shows.
Seasoned brokers, however, say they aren’t worried.
“Not one bit,” Craig Morris of Aspen-based Morris & Fyrwald said recently. “There are still plenty of transactions taking place. … It’s tough to compare any year to a record year that comes on the heels of six straight record years. The trees don’t grow to the sky. You have to expect a pause or a hiccup from time to time and that’s what we’re feeling right now.”
Several brokers predict this year’s total dollar volume will be more in line with 2005, which set a record at the time when annual dollar volume first exceeded $2 billion. But it will likely fall short of more recent annual activity, they say, which saw even more record-setting cash flow.
Many experts point out that the Aspen area is usually among the last markets to be affected by problems playing out nationally and among the first to emerge from them. While wealthy enclaves such as Greenwich, Conn., have reportedly finally fallen victim to the nation’s housing crisis, whether Aspen will follow suit remains to be seen. Like Greenwich, the number of foreclosures in Pitkin County is also up. There have already been 13 foreclosure filings in the county this year, compared with just 15 for all of 2007. But a historical review of county foreclosures shows that they fluctuate from year to year, sometimes without any clear relation to bigger-picture economic trends. There were 24 foreclosures in 2006, for example, and in 1996, 1997 and 1998 — during the go-go Internet-fueled ’90s — there were 32, 27 and 21, respectively.
“The Greenwich bubble has burst because the Wall Street bubble has burst. But Greenwich isn’t a resort community,” said Sotheby’s Aspen Land and Homes broker Tim Mooney. “People are always going to want to live in Aspen because it’s beautiful and we have unparalleled recreational opportunities. That’s not going away.”
Spring, summer and fall are the most attractive months to sell property, according to Morris of Morris & Frywald, meaning that the positive indicators for April could be the beginning of renewed action for Aspen’s real estate economy.
“I think we’ll have a good, strong summer,” said Morris. “Our prices will remain strong and one of the beauties of this market is the majority of our market’s sellers don’t actually have to sell.”
Many deals in the county — and usually the ones that fetch the most eye-popping prices — are paid in cash.
Abramovich’s purchase of Leon Hirsch’s Wildcat Drive property last month didn’t require a loan. The price per square foot for that transaction was $2,543.71. Several industry watchers believe it won’t be long before homes in the Aspen area fetch more than $3,000 per square foot.
This is in large part due to what some people refer to as the “billionaire effect.” There are more than 40 known billionaires with connections to the Aspen area and even many more who visit but don’t own property. Europeans, who are more accustomed to high price-per-square-foot deals, are also taking a close look at Aspen real estate given the currently favorable euro-to-dollar exchange rate.
Countless sources, including a 2007 year-end report prepared by Randy Gold at The Aspen Appraisal Group, project prices to continue to climb even if transactions continue to wane.
Land Title Guarantee Company’s latest report indicates mixed results with the year-to-date average single-family home price falling 10 percent in Aspen to more than $5.37 million; the average single-family home price increased 75 percent in the Snowmass Village area to more than $8.15 million; the average single-family home price in Woody Creek went down 46 percent to $4.58 million; Old Snowmass watched its average single-family home price drop 31 percent to just over $3 million; the average price for a single-family home in Basalt skyrocketed 141 percent to $3.23 million; and Carbondale’s average single-family home slipped just 1 percent to $855,625.