The first quarter 2019 results are in, and the statistics are sending clues on how the residential real estate market in Aspen and Snowmass is likely to perform for the remainder of 2019.
We started the year with roughly 526 active residential listings throughout the Aspen Snowmass market and ended the first quarter with about 588, a 12 percent increase in the inventory of residential properties on the market. During most of the first quarter, the market averaged about 47 properties pending under contract, but as we approached the end of March, the number of pending contracts doubled to 99, indicating an acceleration of properties going under contract.
The first quarter also ended with a relatively healthy total sales volume of $301 million and 86 sales of residential properties in the total Aspen Snowmass market. This compares favorably to the $290 million total volume and 96 sale transactions in the first quarter of 2018; and is the best first quarter result since the first quarter of 2015 when the market achieved a total sales volume of $318 million from 93 transactions.
By itself, the 2019 first quarter sales volume would indicate that the Aspen Snowmass market should end the year with anywhere from $1.3 billion to $1.5 billion of total sales.
Another popular indicator to look at while trying to make market predictions is the trend in the average number of days properties are on the market before they sell. When that indicator is moving up, it normally means the market is slowing; and in reverse, when it is moving down, it usually indicates that the market is getting stronger. At the beginning of 2019, the average length a property was on the market in Aspen was 272 days and for Snowmass was 263 days.
At the end of the first quarter, the Aspen number had trended up slightly to 293 and the Snowmass number had trended down slightly to 253. This small movement in the indicator could likely be caused by asking prices trending down, which has been noticeable in the first quarter of 2019.
Another indicator to look at when trying to predict future trends is the 90-day and 180-day moving averages of total sales volume. This indicator helps smooth out the month-to-month gyrations in the sales volume and can help detect market trends.
When the 90-day moving average is above the 180-day moving average, the market volume trend is increasing. When the 90-day moving average drops below the 180-day moving average, it’s usually an indication that the market sales volume is slowing.
In January, the 90-day moving average dropped below the 180-day moving average and has stayed that way throughout the first quarter. This same thing happened in the first quarter of 2017 and 2018, but reversed itself in the second quarters of both years. The only times we’ve seen this reversing pattern that lasted for more than one quarter was back in the last quarter of 2007 that lasted for almost 24 months during the Great Recession, and in 2016, where it predicted the relatively weak 2016 market year.
Because of the spike in the number of properties under contract at the end of the first quarter, it’s likely the 90-day moving average will reverse course and move back above the 180-day moving average of total sales volume. In addition, the national economy is predicted to grow at a steady 2.4 percent annual rate through 2019; and the March jobs report showed a solid 196,000 new jobs created. The stock market is again within striking of setting an all-time high. As a result of these indicators all pointing in a positive direction, it’s likely that 2019 will be another solid year for Aspen Snowmass residential real estate.
Lori Small is a luxury real estate broker associate with Coldwell Banker Mason Morse; and William Small, CCIM is the Founder and CEO of Zenith Realty Advisors, LLC, a commercial-investment real estate advisory and investment firm.