2016 Aspen Area Real Estate Market Report

2016 Market Highlights

©Amy Doherty

1. Compared to the four years of 2010-2014, 2016-dollar volume tracked about even, coming in at approximately $1.45 billion.

2. The second half of 2016 exhibited a 56% increase in total dollar volume sold over the first half.

3. November 2016 was the second best performing month (just behind September) of 2016 and was the first month of 2016 that exhibited more sales than the same month in 2015.

4. Months of inventory have declined from 19.24 in January 2015 to 11.34 in December 2016.

5. Aspen single family sales transactions and dollar sold volume doubled in the second half of 2016.

6. Red Mountain single family home sales per square foot pushed up on average to $1700 per square foot in 2016 from $1600 per square foot in 2015.

7. In the West End, several closings just under or over $2000 per square foot occurred in 2016.

8. The McLain Flats area did not experience the same sort of growth in sales in 2015 as the rest of the Aspen single family market and continued to remain stagnant in 2016.

9. In 2016, the premium paid for “new” properties was $1790 on average per square foot, which is 34% greater than the overall average sale per square foot.

10. In 2016, there were 19 sales above $2000 per square foot: 9 in the Central Core, 1 in Old Snowmass, 2 on Red Mountain, 1 in West Aspen, and 6 in the West End.

11. The central core of Aspen Condo/Townhouse/Duplex/Half Duplex inventory continues to shrink (off ~14% in 2016).

12. Vacant land sales have been a bright spot in the market for the last several years of steady improvement since the recession in 2008/2009, but total sold dollar volume dropped off in 2016, partly due to the fact there are fewer listings (50% fewer), especially below $3 million.

13. For the entire market, 2016 total dollar volume was off about 30% vs. 2015. A big reason lies in the upper end of the market. We were off ~$600 million in total dollar volume 2016 vs 2015 and $274 million of it occurred at the upper end. In the luxury market (above $10 million), there were 32 closings in 2015 totaling $471 million. In 2016, we had 16 closings totaling $197 million. This equates to a 50% reduction in transactions and a 54% reduction in dollar volume. In Aspen alone, there were 25 sales above $10 million in 2015 and in 2016, there were 10 sales above $10 million (off 60%). This slow-down in sold dollar volume in the luxury market was a big factor contributing to the decline in sales for the year 2016. However, in the 3rd and 4th quarters of 2016, we saw a nice pick up in sales in the upper end: with 6 closings above $10 million in Aspen alone, totaling $86 million, up 92% over the first half in sold dollar volume. Currently, there are 6 listings pending/under contract with an asking price above $10 million totaling $116 million.

14. In 2015, there were 14 sales above $15 million. In 2016, there were 6 sales above $15 million plus one fractional penthouse at the Dancing Bear mountainside building where all 8 fractional shares were purchased for $2 million each for a total of $16 million. This penthouse was sold as a “white box shell” and totaled 2948 square feet, closing at $5427 per foot. This sale price per foot is over $1000 per square foot more than the previous record set in Aspen. The buyer has re-listed the fully completed penthouse for $29.95 million or close to $10,000 per square foot.

15. In Snowmass Village, overall sales YOY 2015 to 2016 remained relatively static. In 2015 $145 million in single family homes were sold in Snowmass in 35 transactions for an average sale price of $920 per foot. In 2016, $150 million homes sold in 38 transactions for an average sale price of $881 per foot. Currently, there is approximately $600 million listed for sale, or about a 4-year supply of inventory. Single family home buyers who are resistant to prices in Aspen above $1000 per square foot, often buy in Snowmass Village. In Snowmass Village, 73% of home sales are under $1200 per sq ft. Expect this to continue now that Base Village is moving ahead with redevelopment.

16. Like Snowmass single family sales YOY 2015 to 2016, Snowmass condo sales remained static at about $80 million for each year (88 listings sold in 2016). Currently, $188 million is listed for sale in 171 units (or, a 2.35-year supply of inventory). However, there are about 500 units of shadow inventory expected to be listed in the next few years as the Snowmass Base Village gets built out. This inventory will be new construction and will put pressure on the current inventory of primarily older condos for sale in Snowmass Village.

17. In 2015, there were 6 sales of vacant lots in Snowmass for a total dollar volume sold of $7.22 million. The highest sale was a lot for $1.5 million in Ridge Run. In 2016, 4 lots sold for a total dollar volume of $8.2 million. The highest sale was a lot for $3.3 million that sold in The Pines at Owl Creek. And, on January 4, 2017 a ski in/ski out two home compound lot sold in Wood Run for $9,050,000. This makes 2017 vacant land sales already eclipsing both 2015 and 2016 full year sales.

18. In Old Snowmass/Woody Creek, dollar sold volume increased 21% in 2016 versus 2015 and the average sales price went up 14% from $672/sq ft to $764/sq ft. $74 million in sales occurred in 2016 and, currently, there is $350 million listed, about a 4.5-year supply of inventory. There were 5 lot sales in each of 2015 and 2016 in the area for a total of approximately $5 million in each year.

2016 Detailed Market Report: The Glass is Half Full

© Amy Doherty

Aspen/Snowmass residential real estate sales showed a nice pick-up in momentum in the second half of 2016, although still falling short of 2015’s record $2.01 billion in total dollar volume. 2015 was a strong showing, the likes of which had not been seen since pre-recession years. The slowdown in 2016 can be attributed primarily to uncertainty surrounding the election and the high performance of the prior year. Compared to the four years of 2010-2014, however, 2016 dollar volume tracked about even, coming in at approximately $1.4 billion.

There are many areas of strength in the current market and technical indicators for the consolidated market continue to improve. For Pitkin County as a whole, the second half of 2016 exhibited a 56% increase in total dollar volume sold over the first half. November 2016 was the second best performing month (just behind September) of 2016 and was the first month of 2016 that exhibited more sales than the same month in 2015. Months of inventory have declined from 19.24 in January 2015 to 11.34 in December 2016. Sold prices per square foot have been inching up in many key sub-sectors, as lower priced properties continue to be sold and removed from inventory. The number of sales exceeded the number of new listings for the last 4 months of 2016. And, the total number of new listings coming on the market continues to fall. This indicates a well-priced market; If it was getting frothy, more listings would be put on the market as sellers tried to capitalize on a potential bubble forming.

Aspen Single Family

Aspen single family sales declined significantly in 2016, contributing in large part to the overall decline in the market. Aspen single family sales for 2016 totaled 55 transactions and $354.5 million vs. 109 transactions and $806 million in sold volume for 2015. This equates to a reduction of 50% in total transaction volume and 56% in total dollar volume. But, the second half of 2016 displayed a significant increase over the first half, boding well for 2017. Aspen single family sales transactions and dollar sold volume essentially doubled in the second half of 2016 from 17 transactions and $111 million closed in the first half of 2016 to 38 transactions and $244 million closed in the second half of 2016.

When digging deeper, the two neighborhoods that experienced the biggest declines year over year are Red Mountain (off 60% in dollar volume) and the West End (off 41% in dollar volume). In 2015, one significant developer bought multiple properties in both neighborhoods to build new construction projects or to remodel. He did not buy as much property in 2016. However, this developer has put his new inventory back on the market at higher prices per square foot, nudging up the averages for the neighborhoods. Red Mountain single family home sales per square foot pushed up on average to $1700 per square foot in 2016 from $1600 per square foot in 2015. Of note, a spec house on Red Mountain closed in late 2016 at $24 million, or $2750 per foot, and was immediately re-listed at $32.5 million, or $3700 per foot. In the West End, several closings just under or over $2000 per square foot occurred in 2016 and the highest sale was a newly constructed house on West Hallam that sold for $15 million, or $2750 per square foot. In addition to the developer mentioned above, several other investors have been bringing new supply into areas of our market where demand is the highest, particularly these neighborhoods of the West End and Red Mountain.

The McLain Flats area did not experience the same sort of growth in sales in 2015 as the rest of the Aspen single family market and continued to remain stagnant in 2016. Currently, there are 25 listings ($251 million) of single family homes in the area and only $10,250,000 sold in 2016 (2 listings). The average sale price per foot in 2016 was $616, down from $1253 per foot in 2015, but this data is skewed because of the low transaction volume in 2016. The two sales that did occur in 2016 were a house in White Horse Springs that sold for $7.5 million after originally being listed for $13.75 million and taking 7 years to sell and John Denver’s former home in Starwood that sold for $2.75 million after originally being listed February 2015 for $5.6 million. McLain Flats single family sales represented 6.6% of Aspen’s total single family sales in 2015 and 3% of total sales in 2016. However, the inventory in the area of listed homes equals 10% of the total inventory available for sale in the single-family sector. This area is a laggard in terms of performance.

East Aspen and West Aspen also experienced declines of almost 60% in total dollar volume sold. Average sold price per square foot nudged up in West Aspen to $1128 per foot in 2016 vs $1050 per foot in 2015, due in large part to a developer sale of a home on Red Butte for $12.1 million, or $1900 per foot. East Aspen sales in 2016 were relatively flat at an average price per foot of $1130.

When analyzing all Aspen neighborhoods for single family home sales, it is evident buyers will pay a premium for “new” homes. This could be either a recent remodel or a new build. In 2016 the premium paid was $1790 on average per square foot, which is 34% greater than the overall average sale per square foot. Of the 55 total single family sales, 15 “new” properties sold (27% of the total). There are currently 60 “new” properties listed out of 164 active listings (37%). Much of the older, stale inventory has been picked through and sold. Developers are building new assets to fill the demand for buyers in this segment, but this takes years to bring to market. Clearly, buyers will pay a premium for it. I expect prices paid per square foot to continue to rise for this asset class.

Buyers will also pay a premium for higher priced properties, mostly due to location and quality of finishes. In 2016, Buyers paid, on average, $1200 per sq ft for properties sold in the $3-5 million range; $1500 per sq ft for properties sold in the $5-7.5 million range; also $1500 per sq ft for properties sold in the $7.6-10 million range, and $1740 per sq ft for properties sold above $10 million.

When looking at historical sales in Pitkin County as a whole, there were 28 sales in 2015 above $2000 per square foot: 15 in the Central Core, 2 in East Aspen, 1 on McLain Flats, 5 on Red Mountain, 2 in Snowmass Village, 2 in the West End, and 1 in Woody Creek. In 2016, there were 19 sales above $2000 per square foot: 9 in the Central Core, 1 in Old Snowmass, 2 on Red Mountain, 1 in West Aspen, and 6 in the West End.

Aspen Condos:

The central core of Aspen Condo/Townhouse/Duplex/Half Duplex inventory continues to shrink: In 2015, there were 258 active listings. In 2016, there were 220 listings (a 14% reduction). Also in 2015, there were 166 new listings put on the market versus 128 new listings put on in 2016. The average sale price ticked up to $2,155,035 in 2016 from $2,038,500 in 2015. And, the average sold price per square foot moved up to $1437/sq ft from $1390/ sq ft in 2015. Not surprisingly, Days on the Market (DOM) until sale also decreased from 261 days in 2015 to 230 days in 2016. Currently, $366 million/96 properties are listed for sale. Due to the shrinking inventory of available Condo/Townhouse/Duplex/Half Duplex, sold volume was down about 25% and 79 listings sold in 2016 for a total sold dollar volume of $170 million versus 109 for a total sold dollar volume of $222.2 million in 2015.

Breaking down the sales by bedroom count, 35 2-bedrooms sold (27% of the total sold dollar volume) at an average sold price per foot of $1240. 18 3-bedrooms sold (34% of the total sold dollar volume) at an average sold price per foot of $1715. And, 11 4+-bedrooms sold (35% of the total sold dollar volume) at an average sale price per foot of $1703. Not surprisingly, buyers are willing to pay a premium for a larger bedroom count, and 3+ bedrooms are selling above $1700 per sq ft in the central core of Aspen.

Aspen Vacant Land

Vacant land sales have been a bright spot in the market for the last several years of steady improvement since the recession in 2008/2009, but total sold dollar volume dropped off in 2016, partly due to the fact there are fewer listings (50% fewer), especially below $3 million. In 2015, there were 111 lot listings in Aspen and, currently, there are 55 active listings. In 2015, there were 32 lots in Aspen that sold for a total dollar volume of $106 million. In 2016, lot sales were off ~27% in dollar volume and $77 million sold in 17 units. Of note, three lots sold in 2016 at the base of Red Mountain in the Rubey subdivision: a 6.4 acre lot sold for $10 million in early 2016, a 4.38-acre lot sold for $13 million and a 6.28-acre lot sold for $18.5 million. Other sales of note in 2016 include a $3 million sale of a lot in the east end of town on McSkimming, a $6.2 million lot sale on Red Mountain on Placer Lane, one of several Forest Service lots listed for sale in the West End sold for $1.75 million, an Aspen Highlands lot sold for $4,050,000 and two lots sold in West Aspen on Chatfield Rd. and Sierra Vista Drive for $4.5 million and $4,392,500, respectively. In 2015, a lot sold in Double Bar X for $3.95 million. Three lots sold up Castle Creek on South Hayden for$6.4 million, $5.5 million, and $5.75 million, respectively. Lots in the West End of Aspen were snapped up by developers, including an historic redevelopment lot at 530 West Hallam for $6.15 million, a 6000 square foot lot at 431-433 West Hallam for $3,712,500, and a 6000 square foot lot on Lake Avenue for $3.5 million. A lot in the east end of town which is a tear down of an old lodging project sold for $10.1 million and is being re-marketed as a single family home. And, finally, the Smuggler mine property was purchased for $7.5 million. Expect many of these sales to be re-listed as single family new construction projects in future years.

Aspen/Snowmass Luxury Market

For the entire market, 2016 total dollar volume was off about 30% vs. 2015. A big reason lies in the upper end of the market. We were off ~$600 million in total dollar volume 2016 vs 2015 and $274 million of it occurred at the upper end. In the luxury market (above $10 million), there were 32 closings in 2015 totaling $471 million. In 2016, we had 16 closings totaling $197 million. This equates to a 50% reduction in transactions and a 54% reduction in dollar volume. In Aspen alone, there were 25 sales above $10 million in 2015 and in 2016, there were 10 sales above $10 million (off 60%). This slow-down in sold dollar volume in the luxury market was a big factor contributing to the decline in sales for the year 2016. However, in the 3rd and 4th quarters of 2016, we saw a nice pick up in sales in the upper end: with 6 closings above $10 million in Aspen alone, totaling $86 million, up 92% over the first half in sold dollar volume. Currently, there are 6 listings pending/under contract with an asking price above $10 million totaling $116 million.

There are 103 listings for sale above $10 million for a total value of $1.8 billion. This equates to approximately a 9-year supply of inventory. The average days on the market is 366 and the average list price per square foot is $2229. The average sold price per foot was $2315.51 in 2016. The sold price vs. asking price for this upper end of the market was 85%. The lower and middle end of the market averages closer to 92% sales price to asking price. Of the 103 listings, 26 listings (25%) have experienced price reductions since originally being listed and 8 listings (8%) have actually seen price increases. This supports the theory that the luxury market owners in Aspen/Snowmass are strong and will not keep pushing prices down to get their properties sold, providing support for the market.

In 2015, there were 14 sales above $15 million. In 2016, there were 6 sales above $15 million plus one fractional penthouse at the Dancing Bear mountainside building where all 8 fractional shares were purchased for $2 million each for a total of $16 million. This penthouse was sold as a “white box shell” and totaled 2948 square feet, closing at $5427 per foot. This sale price per foot is over $1000 per square foot more than the previous record set in Aspen. The buyer has re-listed the fully completed penthouse for $29.95 million or close to $10,000 per square foot. While not an unusual asking price per foot for many other luxury markets around the world, this asking price has many experts in Aspen shaking their heads in disbelief.

Snowmass Single Family

Overall sales YOY 2015 to 2016 remained relatively static. In 2015 $145 million in single family homes were sold in Snowmass in 35 transactions for an average sale price of $920 per foot. In 2016, $150 million homes sold in 38 transactions for an average sale price of $881 per foot. Currently, there is approximately $600 million listed for sale, or about a 4-year supply of inventory. Single family home buyers who are resistant to prices in Aspen above $1000 per square foot, often buy in Snowmass Village. In Snowmass Village, 73% of home sales are under $1200 per sq ft. Expect this to continue now that Base Village is moving ahead with redevelopment. East West Partners/Skico/KSL Capital bought the project for ~$55 million from Related and closed in December 2016. A new Limelight Hotel (with 11 whole ownership residential units for sale) and “Building 4” (with 3 whole ownership, 3500 square foot units) are slated as the first areas to be developed as this stalled project finally gets going again.

Snowmass Condos

Like Snowmass single family sales YOY 2015 to 2016, Snowmass condo sales remained static at about $80 million for each year (88 listings sold in 2016). Currently, $188 million is listed for sale in 171 units (or, a 2.35-year supply of inventory). However, there are about 500 units of shadow inventory expected to be listed in the next few years as the Snowmass Base Village gets built out. This inventory will be new construction and will put pressure on the current inventory of primarily older condos for sale in Snowmass Village. 2016 sales of condos included 9 studios at an average sold price of $428 per foot, 11 one bedrooms at an average sale price of $581 per foot, 40 2-bedrooms at an average sold price of $634 per foot, 18 3-bedrooms at an average sold price of $684 per foot, and 10 4+ bedrooms at an average sold price of $790 per foot.

Snowmass Vacant Land

In 2015, there were 6 sales of vacant lots in Snowmass for a total dollar volume sold of $7.22 million. The highest sale was a lot for $1.5 million in Ridge Run. A lot also sold in the Fox Run PUD for $1.45 million. This lot was originally listed in 2008 and was listed over the years for as high as $4.75 million. In 2016, 4 lots sold for a total dollar volume of $8.2 million. The highest sale was a lot for $3.3 million that sold in The Pines at Owl Creek. Another lot sold in The Pines in 2016 for $2.8 million. And, on January 4, 2017 a ski in/ski out two home compound lot sold in Wood Run for $9,050,000. This makes 2017 vacant land sales already eclipsing 2015 and 2016 full year sales.

Old Snowmass/Woody Creek:

Dollar sold volume increased 21% in 2016 versus 2015 and the average sales price went up 14% from $672/sq ft to $764/sq ft. $74 million in sales occurred in 2016 and, currently, there is $350 million listed, about a 4.5 year supply of inventory. There were 5 lot sales in each of 2015 and 2016 in the area for a total of approximately $5 million in each year.

Notable New Listings

~ $1 billion listed for sale at about $3000 per foot or higher, including:

-135 East Cooper Street Victorian $25.75 million ($4000 per foot)

-Top of Mill house: $30.95 million ($3400 per foot)

-$32 million for 135 Miner’s Trail ($3900 per foot)

-$39.75 million: 109 Willoughby Way ($3500 per foot)

-$39 mm; 343 Willoughby ($4000 per foot)

-720 Willoughby Way re-listed at $32.4 million ($3700 a foot) after just closing for $24 million

-Dancing Bear whole ownership Penthouse at $29.95 million ($9954 a foot) after just closing for $16 million *

-North Mill Street penthouses at $3000 and $3500 per foot *

-601 East Hyman “Victorian” penthouse at $5500 a foot *

-2 other penthouses in the core (520 East Hyman and 420 East Hyman) both at $3800 a foot *

--a 1 bedroom in the Brand Building ($5600 a foot)

*There is scarcity value in core penthouses. Several years ago, Aspen City Council approved an ordinance limiting building heights of future projects in the downtown area to 28 feet. This ordinance essentially bars three-story residential developments with 3rd floor penthouse projects. Just before the ordinance took effect, 11 development applications were submitted, eight of which involved third-story penthouses. Many of these penthouses, developed under the old guidelines, are now finishing construction and are hitting the market for sale.

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