Last week, one property went under contract after 199 days on the market, a new Snowmass Base Village 3 Bdrm/3 Ba, 1498 sq ft slope side condo. Originally priced at $2.995M, it was reduced to $2.495M.
Additionally, some Residences at Little Nell fractional units closed according to published reports in the Mountain Business Journal. See the transactions. Seven 3 bedroom units closed in the range of $1.2M-$1.75M. and one 4 bedroom, Unit F313, closed at $2.95M.
This past week, most of my time was spent with a few local buyers looking at lower end properties. They are starting to scratch and sniff for opportunities to get into the Aspen market. These are locals living Down Valley – Missouri Heights, Basalt, Carbondale – poking around in Snowmass, at lower end Aspen condos, looking at housing possibilities that will land their young families within the Aspen School District or be a good investment strategy.
One recent empty nester buyer sold their 110 acre Vermont Trapp Family like hilltop property in late August in the $750K-$1.5M range to move into the Roaring Fork Valley. Vermont real estate is reeling in this mess. They got out just in time. Trailer in tow, they are searching for beautiful mid-valley land to build. The husband, a builder by trade, knows his land and construction costs will be heavily discounted because he’s a cash buyer, land sellers and subcontractors are desperate, and he’s ready to pull the trigger. Maximum advantage.
Experience in this local market has shown that each of the three recessions since the late ’70’s – 1981, 1990-91, and 1999-2001 – have been staging periods for future and significant appreciation. Yes, that statement may now sound like a broken record, a line historically accurate supporting Aspen real estate, but dubious and suspect at present. But, after much thought, it’s probably still true unless we are hit by a significantly deeper and prolonged economic downturn.
There still remain significant sociological and demographic trends bearing down on places like Aspen that in theory should protect us, harbor us, long term. (See The Estin Report: Socio-Economic Trends Affecting the Roaring Fork Valley). Certainly, these trends are now delayed (401K and other retirement accounts have to be built back up while at the same time, almost all asset classes appear to have been devalued 30-40% on average) but these trends still exist, they are still relevant and they remain poised to eventually take the Aspen area into its next value uptick, whether its 6 or 24 months from now…If the whole world is down -30% across the board, we start anew (devastated?) at that lower base, and in well recognized unique geographic areas, like Aspen, the climb back is likely to be at least moderately, maybe even highly, accelerated.
A friend says the boomer nest egg is never coming back, and he recommends I read, “The Great Depression Ahead: How to Prosper in the Crash Following the Greatest Boom in History”. “Okay”, I say, ” I may get to it but with this caveat…First, the author Harry Dent is not an economist, he works with demographics; Second, in his last book “The Next Great Bubble Boom: How to Profit from the Greatest Boom in History: 2006-2010″ he predicted the Dow to be 40,000 in 2009.”
Economists are saying that 2009 recession is worse than those of the 90’s and 2001 which were “mild” and not as bad as the early ’80’s which was severe. But we are in a period of great stress, uncertainty and fear at present. This recession is more broad based than the those three earlier ones, and especially relevant for Aspen, it is hitting the wealthy far more seriously than ever before.
Perhaps that’s why the low end market appears to generating some activity: no stock or investment losses, no Madoff victims, no down valley property they must sell first to make the move up to Aspen, presumably debt free and working with cash. Ah, to be free and clear, free and clear, in the land where the mattress, yes you heard it right, where the mattress rules and cash is king.
More later …