AnneAdare's Take January 2012
March 16, 2012
AnneAdare's Take
January, 2012 reflected drop in transactions to 55 from 78 in January 2011. But during that same span, the combined value of those property sales increased to $96.65 million from $84.14 million. A bit of renewed activity in the upper ranges lifted the dollar volume after poor sales in October and December-- even though the number of transactions was down.
Last year looked strong going into the fourth quarter, but poor sales in October and December doomed chances to post a big gain over 2010. For the past two years, sales have been essentially flat. Sales amounted to $1.26 billion in 2010 and $1.27 billion last year. The market in Pitkin County bottomed out in 2009 with sales of about $1 billion. Sales were well over $2 billion annually prior to the Great Recession.
In January, the median single-family-home sale price in Pitkin County was $3.11 million, an increase of 12 percent from the 2011 full-year median, according to the Land Title Guarantee report. The average (mean) single-family-home sale price was $3.19 million in January. So while actual sales prices of single family continue to decline, the activity at the upper levels is increasing the dollar volume and lifting the mid-point of all sales prices higher. (We will gladly "take" any improvement at any level in our real estate market!)
Predictions of the 2012 real estate market frankly are "all over the board.' (See the article on my web site) It is my impression, however, that there are hopes of an improving market although most seem to think that it will be a long slow recovery. Until the properties are absorbed, you will not see meaningful appreciation in prices. It is, therefore, still an opportune time to purchase properties before the "woulda, coulda, shoulda bought" period that will ensue as properties are absorbed. From a Seller's perspective, there are signs of renewed life in our market: When properties are staged with care and priced competitively and attractively to be in the top three of their price range, they attract get showings and potential buyers coming through the front door.
Aspen is also experiencing the impact of "shadow inventory"--those properties not officially listed for sale, but close to it. This term usually refers to distressed properties already owned by banks but not yet listed, homes in the foreclosure process and properties where owners are at least 90 days late in paying mortgage. In Aspen, however, this often takes another form: At the slightest signal that things are looking better, we get yet a "new crop" of inventory with more stress on pricing. Owners who have wanted to sell their properties but have been holding them back are encouraged by the good news. Along with increasing financial pressures, these Sellers are sitting in the shadow of the market looking for signs that prices are getting better. When they see the signs, as they did in the summer of 2011, they put their properties on the market.
The large inventory is creating a challenge in getting buyers to act. Buyers have little sense of urgency so there is no rush to buy-- particularly as interest rates remain low. The good news, however, is that there ARE buyers on the sidelines that will eventually buy! And there are Sellers who are accepting the new market that has been re-calibrated by economic realities and dealing with it realistically.
Hopefully the January, 2012 performance will continue in a positive direction and turn around a poor finish to 2011. My expectation is for continued steady improvement. Certainly we are encouraged by Aspen's improving economy as indicated by sales tax receipts and improved hotel bookings (see ABOR Observer Report above).
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