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September 07, 2004
Real Estate Spike in April Follows Record Quarter
Reflecting a surge in demand once shackled by terrorism worries and a sluggish economy, real estate activity in San Miguel County swelled in April, marking a record high for sales and dollar volume for the month. Year-to-date dollar volume – logged from January to April – also set a record at $224 million, outpacing even the trophy year of 2000 when volume reached $174 million.
“I never though we could replicate the year 2000,” said local real estate broker T.D. Smith, of the Telluride Real Estate Corp. “I think pent-up demand is at the core of the sudden blast. A slowdown of the economy coupled with 911 basically made the person who could afford a change in lifestyle very conservative. Now that terrorism is somewhat contained and maybe a bit more predictable, and the economy has picked up, they are able to experience other lifestyles besides major metropolitan areas and freeways.”
Countywide April real estate sales bounced 165 percent over the last year, jumping from 58 transactions worth $27.5 million in 2003 to $72.8 million generated from 93 transactions last month. The impressive figures were helped by $10 million in high country sales.
April activity was pronounced in the Town of Telluride, with four homes selling for an average of over $2 million, according to Judi Kiernan of Telluride Consulting, who compiles local market data.
Other notable Telluride transactions that helped make April a banner month: 17 condo sales raked in $8,720,232 in sales while two vacant residential lots sold for an average of over $1 million each. Among the condo sales was the most expensive condo ever sold in Telluride: a residential unit in the new building known as Willows located near the Telluride Post Office. Price tag: $1.75 million.
A dearth of supply is likely to restrict Telluride activity at some point, said Todd Creel of Prospect Realty, who predicted that the upward run will continue for the remainder of the year.
“We are running into supply issues in town,” he said. “There is virtually no land left and people who have been waiting are realizing that with the land gone, if they don’t buy now it will only get worse,” he said.
One reason for the spike in Telluride’s segment was the convergence of two separate buyer segments, said Ray Bowers of Peaks Real Estate. Low interest rates gave locals a chance to purchase slices of Telluride’s lower end market, roughly the $250,000 to $500,000 range, putting them alongside second homeowners who would have reached for pricier properties had they not lost equity in recent years.
“You had these two groups converging on the same product,” Bowers said, adding that he expects interest rates to rise and pull the upswing down into a plateau.
All three market segments – San Miguel County, Telluride and Mountain Village – were strong in the first four months of the year.
Kiernan said the average Mountain Village home sold in April went for $3.6 million (five single family homes that month sold for a total of $18,070,400) and four condominiums changed hands for a total of $2,764,000.
Creel noted that Mountain Village had been “soft” for the past 18 months with several properties sitting on the market. Now the trend is shifting and the best properties are being bought first, just as buoyed buyer confidence is causing ranch lands and 35-acre ranchettes to be scooped up “in pretty significant numbers” in the county.
“Basically, there isn’t much land in the county that’s a good value and savvy people are realizing this,” Creel said.
In San Miguel County, seven single-family homes sold in April for $2,408,500, while six high-country vacant lots were sold for just over $10 million.
“It’s important to note that the high country transactions boosted the numbers, but even without it, we would have had a record month and a record year to date,” said Kiernan.
Experts noted that the spiked performance was helped by the relatively rare presence of new inventory in the region, such as new properties in the Mountain Village. And they point to future booms that could be tied to activity at the Idarado development east of Telluride.
In April, new inventory sales included five vacant lots that went for $1.5 million each in Mountain Village, part of a new subdivision near the gondola.
“They were the first five lots of a 23 lot subdivisions, which is all new inventory,” Kiernan said.
Looking beyond April to year-to-date statistics, or transactions recorded from January through April, dollar volume for 2004 was a whopping 118 percent over 2003, from $102.9 million to $224 million.
The number of sales during that period rose 33 percent from 193 to 257. In 2000, the year that had been a benchmark for the local real estate market, 304 transactions for the same period generated $174 million.
Since 1999, the lowest mark for YTD dollar volume occurred in 2002 with $99 million.
Experts are generally optimistic that the summer will churn along well, with some noting that the presidential elections could potentially slow the upward trend, a suggestion with which Creel disagreed.
“I think the market will continue its trend mostly regardless of who gets elected,” he said. “Real estate is getting pretty expensive around here and [buyers] are going to make their decision irrespective of politics. It comes down the economy and their confidence level.
Posted by Ernie at September 7, 2004 06:22 PM