Despite a nationally fluctuating real estate market, Aspen is still on the upswing, continually setting benchmarks and producing record-breaking deals. The most recent trend: residential units selling for prices that break down into more than $2,000 per square foot.
Aspen broke the $1,000 per square foot mark six to eight years ago, local land brokers say, but these days $2,000 per square foot is becoming common and last autumn saw the sale of a Shady Lane property selling for more than $3,000 per square foot, according to Robert Ritchie, a broker at Coates, Reid & Waldron.
"What that really tells me is that there are limited places in the world that the truly wealthy can go and be comfortable living there," said Ritchie. "Aspen is one of the few. ... It's a place where if they find something extraordinary for them here, they'll take it because you can travel all over the world and not find what's here."
Ritchie said the Shady Lane sale was "significant," but the house, which is next to the Roaring Fork River, wasn't on a huge lot. What he considers shocking is a rumor that the buyer is going to tear down the house and rebuild.
"It's hard to use that ($3,000 per square foot) as a benchmark as to where everyone is going," said Rod Woelfle, Aspen Board of Realtors president and a broker for Aspen Land and Homes/Sotheby's International Realty. "But we do have active listings for that $3,000 per square foot now."
He added that properties like the Shady Lane house were hitting that mark, but because most of these types of properties were teardown homes, citing that figure as a market trend was somewhat misleading. Another West End house sold for more than $5,000 per square foot, but it was also a teardown and he says the value is a "land number," and not related to the structure.
To start building a new house from scratch today - including land, materials, architecture, permitting and financing - would cost somewhere around $2,000 per square foot, if a luxury home were the goal, according to Ritchie.
"What's happening is the truly rich are a lot richer," he said.
Carol Dopkin, of Carol Dopkin Real Estate Inc., said she sold an Aspen Alps property that passed the $2,000 per square foot mark and she thinks that it's the new "benchmark for the summer season."
Besides Aspen Alps, condominiums in Aspen Square and The Monarch are also selling for more than $2,000 per square foot. Their proximity to Aspen Mountain and downtown amenities makes these properties desirable.
Last year, Aspen first consistently saw homes sell for $1,000 per square foot. In 2005, the average was $859 per square foot, according to the Aspen Board of Realtors. In 2006, that figure jumped to $1,103 and in 2007, to date, it sits at $1,258.
Compare that with national averages and Aspen is about 10 times the norm.
According the to 2006 Profile of Homebuyers and Sellers from the National Board of Realtors, the Western region had the highest national average price per square foot at $187 and the South was the least expensive at $98.
But again, Woelfle says drawing square footage comparisons only goes so far.
"If you compare Manhattan, and places where the properties are different, there are not a lot of 10,000-square-foot homes in Manhattan," he said. "Everything is vertical and smaller, so you can only compare price per square foot to a certain point."
In London, Hong Kong and New York City, price per square foot is double - sometimes triple - what's happening in Aspen.
The Associated Press recently reported London units selling for $6,000 per square foot, and $4,000 in New York. Realtors here in Aspen said they had heard similar reports, with those numbers sometimes hitting $10,000 overseas.
"The differential between the haves and have-nots is growing and the haves want to be in Aspen," said Rich Wagar, of Wagar Real Estate Associates.
But they also want to be in Vail.
"I've been doing this for 37 years and we're behind Vail for the first time ever," said Wagar, noting that price per square footage can be more expensive in Vail. "I think there's easier access in Vail, and because Denver is just becoming a 'have' city - there's a lot more money in Denver."
Basic Economics and Future Trends
"The biggest factor is simple supply versus demand from a standpoint of, you can't grow Aspen much more, at any sort of rapid pace," said Woelfle. "We continue to see a large demand and really our supply can't continue to increase."
With a minimal amount of vacant lots still available for development, and new code restrictions on those that can be, there's more want for fewer commodities.
"Basically, Aspen changes not at all," said Ritchie. "There's no more land to be developed and no vacant lots. It's a town that's cute and quaint and first-class amenities, and will stay that way."
There are no signs of slowdown either, said Wagar, Woelfle and Dopkin. Looking at trends in other markets - like London and New York - where Aspen may currently be lagging, has historically shown that the upper Roaring Fork Valley isn't far behind.
"It goes in cycles," said Woelfle. "It will slow back down to a normal pace (at some point), but I don't see anything going in that direction." * Ritchie said it's something he's seen repeatedly before. During cycles in the '70s and '80s, he said, average home prices tripled and so far during this decade he thinks Aspen's prices are on pace to at least double.
The baby boomer factor means that soon-to-be and recent retirees with extra money are buying more second homes. Ritchie said that Aspen is "one of the places they are going with their money."
"It's a fascinating market," he noted.
In Pitkin County, February sales were up 59 percent from the same time period in 2006, records show. The first two months of 2007 saw $445,821,900 worth of sales, compared $236,033,000 during January and February of 2006, according to Land Title Guarantee Company employee data compilation.
"I've tracked high end markets, and it always leads to Aspen," said Woelfle. "I see no reason for history not to repeat itself."
christine@aspendailynews.com