Just a few years ago, an Aspen property that fetched $2,000 per square foot was considered a novelty. Today, in both the central core and on Red Mountain, that benchmark is commonly surpassed.
"Two-thousand-per-square-foot sales happen regularly in Aspen now," according to Andrew Ernemann, broker associate for Aspen/Snowmass Sotheby's International and one of the featured speakers in the annual real estate review that was hosted Wednesday by the Aspen Business Luncheon. Other presentations were offered by Base Village developers Andy Gunion and John Calhoun, with John Sarpa representing the new W Hotel, which will replace the popular Sky Hotel.
According to data compiled by Ernemann, during 2017 properties in Aspen's central core commanded $2,674 per square foot while on Red Mountain the average sale was $2,225 per square foot.
That's just one measure of the local real estate market's strength in 2017, which followed what Ernemann termed a "mini Aspen recession" in 2016.
The robust year for real estate, which has continued into 2018, was capped off by a $30 million Aspen-area property sale. In 2016, the highest priced sale was $24 million.
Last year in Aspen the average home sale price was $8.1 million and there were 88 sales of $5 million or more. That's compared to 63 sales of $5 million or more in 2016.
In 2017, there were 17 sales of $10-15 million homes and 11 of $15 million or more in Aspen. That trend has continued into early 2018, with several high priced luxury properties either under contract "or in play," Ernemann said.
Sales-to-list price of residential properties is another barometer of market strength. From 2015-17, Aspen sellers commanded 93 percent or above of their asking price, which is up from about 87 percent in 2009.
However, in terms of the sales velocity, the pre-recession period of 2005 and 2006, when properties were being resold at a frantic pace, remain the top years for number of sales. That's also when buyers were paying top dollar for properties, on average about 95 to 96 percent of the asking price.
Those who bought at the market peak 10 years ago are just now able to recoup their full investment, according to Ernemann's data. Timing is everything: Buyers who invested since 2012 were able to take advantage of a temporary dip in the market and will realize a more favorable return. That's especially true in the central core where properties are seeing annual price increases of about 15 percent, a figure Ernemann suggested is probably not sustainable over the long term.
Two towns, two markets
Snowmass sales trends have shown a different trajectory than Aspen.
"The reality is the two towns have behaved very differently over the last several years," Ernemann said.
Properties in the Divide led Snowmass Village's per-square-foot costs of $1,523. In Two Creeks they were $1,441 and in The Pines, $1,280. In 2017 the average home sold for $3.4 million in Snowmass Village, which is less than half of Aspen's average single family home sale price. In both 2016 and 2017, Snowmass Village had one home sale above $10 million. Snowmass' sales activity topped out in 2005, with more than $400 million in activity, a high mark it hasn't come close to approaching since that first run-up of Base Village sales. Yet since bottoming out in 2009, sales have slowly risen and remained around the $225 to 250-million mark annually since 2013, according to Ernemann's figures.
The restart of Snowmass Base Village will not only bring new ski-in, ski-out inventory into the market later this year, but possibly help prices of existing stock push upward, according to Wednesday's speakers. Ernemann said ski accessible condos that topped out at about $1,100 per square foot in 2008 have still not fully recovered and since 2013 have hovered around the $700 per square foot mark. In addition to the 99 rentable hotel rooms in the Limelight are 11 whole ownership residences that were offered for sale just two weeks ago. According to Calhoun, four of the Limelight Snowmass residences are already under contract.
From the rebar littered site that East West Partners, the managing partner of the Snowmass Base Village ownership group purchased just over one year ago, the Limelight is now fully topped out and work continues on two other buildings in advance of a Nov. 1 hard deadline that's stipulated in town agreement.
"It's been fast and furious," Gunion said about the Base Village progress.
According to Ernemann, "Snowmass has a lot of upsides. The long-term opportunity for buyers in Snowmass is tremendous."
This is the 43rd year of the Aspen Business Luncheon, according to principal Todd Shaver. Due to the popularity of this annual real estate program, the discussion was moved to a larger room than the one usually used for the luncheon.