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November 19, 2004
Condo-Mania Hits Telluride
The number of real estate sales may have been down for the month of October this year, but the dollar value of those sales was through the roof. Which is where the average cost of buying a home in San Miguel County is headed. According to statistics compiled by Judy Kiernan of Telluride Consulting, the average cost of a property to date in 2004 is just shy of three-quarters of a million dollars, compared to the average cost in 2003 of a mere half-million dollars.
This 50 percent increase in prices hasn’t slowed year-to-date sales, however. The number of sales through the end of October for 2004 was up 19 percent from 2003, with the total dollar value for the same period up 52 percent to $511.2 million, surpassing the previous record set in 2000 by over $20 million.
The condominium market, comprising over $100 million of this year’s market so far, has recently experienced an upsurge in sales. Through October of this year, 103 condos sold in Telluride at an average cost of over $500,000, compared to 31 single-family residences sold in town during that same time period at an average price of nearly $1.5 million.
Mountain Village has seen the same condo boom, with 73 condos selling so far this year at an average cost of nearly $900,000. Twenty-five single-family residences have sold in Mountain Village this year at an average of nearly $3.25 million each.
“We’re having a gangbuster year. The biggest movers on the market have been the in-town condos and homes,” said Lars Carlson of Peaks Real Estate. “The combination of low interest rates and locals looking to get into the market has driven the lower-priced condo market.” Carlson said there are only four or five in-town condos currently on the market under $500,000. “That’s a lot of money. Twelve months ago we had maybe 15-20 available below that price. New ones that come on the market only last a couple of weeks before getting snatched up.”
Carlson noted the new condo properties coming on the market aren’t replacing the lower-priced ones and he doesn’t foresee any new condo construction in that price range in the near future, either. “New properties are coming in at three bedrooms over a million. Locals trying to get into the real estate market are competing with the non-local buyers, forcing them to buy up a little higher,” said Carlson. “That pushes the market up more. I just don’t see that many inexpensive condos being available in the future.”
“A lot of people are turning to condos,” said Jim Lucarelli of Real Estate Affiliates of Telluride. “The low interest rates have encouraged people to buy up every last little thing they can. Small condos of no real distinction in Telluride are selling for $600 a square foot. Bigger condos now compete with single family homes, but there aren’t many of those left.”
The people buying condos are more frequently locals. “It used to be that Tomboy Lodge was mainly bed-base,” said Lucarelli. “The small condos were used for a weekend, but now people need a place to live so they’re buying these condos as a home.”
In response to the increased market demand for in-town condos, several condominium construction projects are underway. Lucarelli is the developer of one of them along with partner Dave Fruen. Located on the lot directly east of Clark’s Market, the planned condominium complex is currently being called Canyonlands.
“It will be a 15-unit condominium with one-, two- and three-bedroom units,” said Lucarelli, who expects to break ground in April. “We hope to have a garage that can accommodate the needs of the residents of the building along with some extra parking. I think it will be a significant improvement to the neighborhood.” When asked if the selling prices will be on the high end, Lucarelli replied, “I think the market has forced that.”
More than a handful of multi-density projects are currently under construction or are in the planning stages. They include a condo complex on what is locally known as the owl lot on Mahoney Drive, a luxury development on South Oak St., the White House complex behind Boomerang Lodge, and an affordable housing project next to the visitor’s center. “There has been a major run up in interest in the Town of Telluride,” said Mike Shimkonis of Telluride Properties. “Everyone wants to live in town. There’s something to be said for the authenticity and genuine feel of the place. It hasn’t been gentrified.”
The increase in interest has resulted in a run-up in prices as well for single-family homes, condos and vacant land in Telluride. “It makes Mountain Village look more appealing to some people, but it does have a different feel,” said Shimkonis. “Telluride is a spirited town full of character and quaintness. People want that and local residents know they need to get their game piece on the board. That’s why we’ve seen a combination of sales. But it is cyclical. There has always been an interest in town but it does taper and the focus turns to Mountain Village.”
Mountain Village condos, such as the Terraces project, are selling out quickly, with interest now turning to the Mountain Lodge and See Forever Village.
Another factor behind the growing interest in local real estate is the surge in the retiring baby boomer population.
“It’s happening across the Rocky Mountain West,” said Shimkonis, who sees a trend of more people using Telluride as a base of operation for their business. “People nearing retirement age are in a transitional mode, looking to live in a community they can get involved with,” said Shimkonis. “It’s now as much about a lifestyle as it is about living in a ski area.”
As to how long the market can sustain this growth, “It can’t continue to keep pace at the rate it’s currently going up,” said Lucarelli. “But it will keep going up. The only factor I see that will change things is a drastic increase in interest rates. But rates could probably double from here without seeing a problem.”
And condos will most likely continue to dominate a large share of the real estate market. “There are few homes in Telluride anywhere near the one million dollar mark,” said Shimkonis.
Lucarelli agreed, saying, “There’s nothing left. The buzzer going off in the background; that means game over. You’re either in town or not.”
By Josie Jay
Click the link below to find out how you can own a piece of real estate in Telluride.
Posted by Adam at November 19, 2004 09:24 AM