After a record setting December of 2012 ($76,000,000 in gross sales), probably the result of investors desire to close by year end due to potential tax code changes, the Telluride marketplace “played catch up” for most of 2013. Very strong months of May, August and September where sales outpaced the prior year by 49% led to a bullish December with $65.6M in transactions, but short of matching the prior December. A reduction of 6% ($342.2M vs. $364.7M) in gross dollar sales volume is not surprising given the year end market anomaly of 2012. The past year was the second strongest market in both gross dollars and number of sales since the height of the market in 2007.
Although sales in the Mountain Village declined 13%, 2013 gross sales of Telluride Mountain Village (TMV) condominiums increased 51% ($79.8M vs. $53.0M). Town of Telluride (TOT) condominium sales increased slightly 6.5% ($43.9M vs. $41.2M). TMV homes are lagging behind the market with $27.8M closed in 2013 vs. $76.1M for 2012. Of particular note, commercial real estate sales in the TOT climbed 67% ($14.9M vs. $8.9M) as leasehold and occupancy rates have dramatically increased. The balance of San Miguel County remained stable this past year with 2013 sales of $82.5M vs. $87.8M during 2012.
Given that nearly 60% of 2012’s real estate transactions closed as the result of contracts and closings occurring from August through the end of the year, 2013 tracked in the same manner as sales in 2012, so it is becoming apparent that the summer / fall selling season is outperforming the winter. This same indicator seems to be present in statistics for retail sales tax as well. Summer tax revenues have eclipsed winter in the recent past.
A very good indicator for the upcoming year is the fact that $93.1M in transactions are currently under contract. The Town of Telluride has long been the market leader and as Historic Telluride goes, the balance of the marketplace soon follows suit. Town of Telluride residential homes and condos have witnessed 21 contracted or closed properties in the past 24 months securing $950 + PSF at price levels between $2M and $6M – - Hopefully a very good indicator for the balance of the marketplace.
Let us know if we can provide you with any specific market data and hope to see you on the slopes this winter.
Year end gross dollar sales in the Telluride Region during 2010 performed 20% above 2009. Sales of $317.6M paced at 92.5% of 2008 which was the partial year of sales production not negatively influenced by the current recession. Numbers of transactions increased 18% and the average price per incident remained stable indicating a stabilizing in value across all market categories.
According to statistics compiled by Telluride Consulting, a total of 103 sales transpired in the Town of Telluride representing total gross dollars of $107.2M. A total of 136 sales occurred in the Town of Mountain Village with gross dollars sales of $148.6M. The remainder of San Miguel County experienced 88 sales totaling $61.9M. The brightest segments of the market occurred with a 67% increase in gross dollar sales of Town of Telluride condominiums, a 55% increase in Mountain Village homes and a 126% increase in the Town of Telluride homes.
This data seems to indicate a strong renewed interest in investment in the Telluride lifestyle with its limited, high quality inventory. As mentioned in prior market updates, the catalyst for stronger sales has been a willingness by some sellers to accept price levels 20% - 30% below the market highs of 2007. Those sellers are not necessarily in "must sell" situations, but are often times seeking liquidity for alternative investments. Investors are gravitating to discounted "Grade A" properties, and seem to be avoiding the limited number of problematic foreclosure and short sale scenarios in the region.
Incidents of sales through June of 2011 showed an 43% increase in transactions while dollar volume dropped from $168.6M to $114.8M. The latter stat can largely be explained due to the sale of a few higher priced properties during the first 6 months of 2010. One must remember that in this relatively small marketplace, a limited number of high dollar transactions can skew market data dramatically. For example, three recent sales / contracts within the last 30 days totaling $15.2M will lessen the “year to date gap” in sales volume by nearly 30%.
During the past 60 days, inquiry levels have risen dramatically, as corporate profits reached record levels and energy companies realize windfall profits. Colorado resorts are realizing a broadening of global clientele as emerging markets boom and sophisticated investors look to purchase real estate as a hedge against long term inflation. Many luxury, primary home markets are thriving in such areas as Dallas, Houston, Southern California, Manhattan and San Francisco. There are many similarities in those markets, namely buyer profiles, which is a precursor to those buyers entering the Telluride market.
Another strong indicator of a possible resurgence of the upper end market is the dramatic increase of upscale residences in Aspen. Typically, the Telluride market follows suit with an uptick in sales in Aspen. A recent article (7/6/11 Aspen Times) noted the closure of 14 homes closed in excess of $10M with three additional residences under contract at that price level. That stat is only one sale less than Aspen’s all time record with one half year remaining. The overall Aspen market is up 51% in transactions and 44% in dollar volume for the first half of this year over 2010.
Factors that render Telluride a viable lifestyle investment: