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The Estin Report By Tim Estin, mba, gri, Broker Associate, Mason Morse Real Estate,970.309.6163

(other articles on Aspen and Snowmass real estate available at www.EstinAspen.com)


¬Immediate Market Highlights (Oct 22, 08):

Our market may have slowed but it has not stopped … we are not immune but we are insulated. Here’s what’s moving now. The overall theme is “instant gratification” sells:
 Superb, Aspen in-town locations and drop dead new remodels and new construction
 Trophy purchases, $$ seemingly no object.
 Realistic priced properties with motivated sellers who understand marketplace conditions and realties.
 Great perceived ‘value’ buys. Buyers are absolutely more discriminating than ever.
 West End single family homes: transactions are off -20% YTD, but off -50% from the peak YTD 2006. However, price/sq ft is higher; new product is selling; people want to be in-town, walk to everything.
 Aspen downtown core sales have plummeted, down 70% YTD, -76% 3Q08 and -61% below the lowest YTD 2004
 Snowmass single family home activity is on the uptick as sellers mark down prices and inventory begins to move. New Snowmass Base Village sales YTD have been off the chart upwards.
 Unknown: if developers and builders start to capitulate, how will it affect existing home prices and sales?


The Estin Report has three sections:
1. Market Summary 3Q08
2. Local/Regional and National Trends Affecting the Aspen/Snowmass Market
3. Fall 2008 Forecast [more]

The Aspen Market March/April 2008:
By Tim Estin | MBA, GRI | Broker Associate | Mason Morse Real Estate Aspen

In spite of negative real estate and credit news almost everywhere, the Aspen market remains strong although it is slowing to a more normal historical pace.

According to data from Land Title Guarantee in their year end summary, 2007 Pitkin County real estate sales was “an incredible year”, the second best ever in terms of dollar sales volume, off an incremental -4.6%, from $2.62B in 2006 to $2.5B in 2007 in total sales.

Whether Aspen’s past four year’s of unprecedented demand, limited inventory and significant price appreciation can be sustained remains to be seen. At present, the trend is a slowing market.

If history is a guide, even if the Aspen market slows down or flattens, significant price decreases – and specifically ‘deals’ – will be minimal or unlikely except in unique circumstances. The average sold to list price is above 95%, and over 70% of transactions are cash. Owners here can afford to wait it out.

Except for those with foreign currency, the reality is that Aspen has few ‘bargains’.

Buyers are beginning to have more choices as inventory levels increase incrementally, and this may be a better opportunity than any other in the past four years for them to be selective with more quality product to choose from.

National and global events, the credit/financial markets melt-down at present, could ultimately tip the balance here between demand and supply over the next 12 months: uncertainty abounds right now … In the immediate post 9/11 period, it took Aspen at least six months before a local slowdown began, and that was mostly related to tourism falling off precipitously, not real estate. For the two years following, Aspen RE priceswere more or less static, with some unique cases of owners selling at a loss, but the market was just slow and flat. Values were maintained while short term appreciation stagnated.

If there is in fact a cooling off trend, it should be regarded as a healthy sign. A return to a more normal, versus hyper, market pace can either be construed “the pause that refreshes’, (like other prior flat Aspen market periods) or “business as usual”. Any slowdown here seems to represent a cyclical interval consistent with Aspen’s history of rapid price appreciation followed by market lulls, not fall-offs. This steady step pattern, rather than boom or bust volatility, is representative of Aspen’s long term investment strength.

This time, however, a market lull may be the calm before a long sustained wave of huge demographic and economic trends bearing down on us like a rolling tsunami. These trends are discussed fully in the complete Estin Report post. [more]

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Aspen Real Estate: Early December 2007/2008:
 2007 will be either the best or second best year ever for the local real estate market, according to a Land Title Guarantee end of October Report on Pitkin County deeds recorded with the Clerk’s Office.
 Sales volume for the year, January through October ‘07, was up 3%, at $2.22 billion, ahead of last year’s record pace of $2.16 billion for the same period. Last year’ total record sales was $2.64 billion.
 2007 October dollar sales volume fell nearly 37% year over year, $183 million compared to $289 million in October 2006, and the number of transactions were down 30%.
• It is difficult to know if sales are in fact slowing, or if the October fall-off is merely a more pronounced case of off-season blues. It is not yet apparent, although everyone here pretty much agrees the frenzied record pace of the past 4 years will slow to a more normal - and healthy - pace.

There may be some reverse psychological comfort in knowing that for the year, as of now, Aspen is showing some resiliency to the national housing downturn.

2008 Winter Forecast

For the past 50 years, Aspen has not only been an important place to be seen, but also it’s been an incredibly good and solid investment. Although owning Aspen real estate is primarily a quality of life decision, more and more buyers also see Aspen real estate as part of a solid portfolio diversification plan.

Yes, most real estate professionals here believe we are probably poised for a slowdown, but at present, early winter 2007, there is little sign of that.

It seems likely that it’ll take longer to market properties and that the unprecedented appreciation levels and hyper-activity of the past 4 years will slow. While the national housing downturn may have a more immediate stabilizing affect on the Aspen market, in the longer term there should be dramatically increasing demand for Aspen and Roaring Fork Valley property based on the significant demographic, socio-economic and local trends cited earlier.

Whether right now Aspen is the land the national housing slump forgot, or sunning itself before a
long dark winter, is anyone’s guess. A credit or stock market meltdown, a strengthening dollar, a terrorist strike, huge energy price spikes, a recession and other shocks to the economy certainly could inflict blows to the Aspen real estate market.

If one is concerned about market timing, especially whether it is prudent to buy into a peak, or maybe even a flattening market, please remember this fact: At any point in time, prices here have always been setting new records. So far, this market has rarely – if ever - corrected, but it has ‘paused’ for 1 – 3 years (as example, post 9/11 the market stagnated for about 30 months).

The historical pattern has been that when prices stabilize, it becomes the new base for the next
market climb.

In the bigger picture, those who have sat on the sidelines waiting for a ’great deal’ or a market correction have basically spent their lifetime regretting that indecision and procrastination. At any time in the past 50 years, this market has consistently presented ‘sticker shock’ to new buyers. And though history is no indicator of future results, once one gets over the psychological pricing hurdle and plans on at least a 3-5 year horizon, boldness in the Aspen market has almost always been consistently rewarded.

For more articles on the State of the Aspen Real Estate Market and related Aspen real estate articles, see The Estin Report, original articles by Tim Estin at www.EstinAspen.com He can be contacted at Mason and Morse Real Estate, 970-920-7387 office, or by email: testin@masonmorse.com [more]

Locally (Aspen), the past three years have been unprecedented in the Aspen Snowmass/Roaring Fork Valley’s (Pitkin County) upward trajectory of real estate values. Prices are at record levels – although at any point in time in the past 50 years in Aspen they have been - and inventory is tight.

The state of the housing market in much of the country may be gloomy but in the Roaring Fork Valley (Aspen, Basalt, Carbondale, Glenwood Springs) real estate values – and especially Aspen/Snowmass - continue to be strong with few, if any, signs of weakening and only isolated, property specific, areas of weakness.

Along with a handful of other resorts, Aspen's international credentials are unique. The real estate market here is cushioned by a global demand for the Aspen product - a sport, intellectual, and cultural mountain resort powerhouse that’s unmatched anywhere in the U.S. And there is a limited supply of properties here.

There are many reasons for continued strong growth, and here are some national trends and more specific local trends and statistics directly impacting real estate in the Aspen area. Read on...(or see Tim Estin's Aspen real estate market regular update site: www.EstinAspen.com ) [more]