Every season in the Roaring Fork Valley offers unique beauty and change. In comparison to the record-setting 2015, the Aspen Snowmass real estate market has cooled off a bit, with year-to-date unit sales down about 30%. If August is any indication, however, the market may be stepping out of its 7-month retreat.
August activity was strong and encouraging. Unit sales increased 44% from last August, 48 properties went under contract (bringing the total to 68), and sales broke $100 million for the first time this year, ranking August the highest yielding month of 2016.
Nevertheless, year-to-date dollar sales are still down 40% and listing inventory is creeping up. The sharp turn has left some people asking, “Where are the buyers?” The summer was indeed a busy season for showings. Perhaps those looking are holding off for price reductions and aren’t ready to pull the trigger just yet. Or could it be that today’s sellers are unrealistic and stuck in a 2015 mindset?
Following basic principles of supply and demand, decreasing sales paired with rising inventory indicates potential for downward pressure on prices. But in this interesting equation, prices per square foot are still holding strong, a phenomenon that would leave some economists scratching their heads. In fact, the year-to-date average sale price per square foot in Aspen is up 4% and the median is up 13%. In Snowmass, the average is flat and the median shows a 2% rise.
Another telling indicator, sale to list price ratio, is also holding its ground, suggesting sellers aren’t very eager to budge when it comes to negotiating discounts. In this niche market, it is possible that they don’t need to sell or have optimistically overpriced their properties “just to see what they can get.”
The Snowmass market, on the other hand, is displaying some noteworthy differences from Aspen’s profile. In fact, year-to-date dollar sales are up 6% as many buyers turn to Snowmass as a value-rich opportunity offering roughly twice the “bang for the buck.” For example, the average sale price per square foot for a Snowmass condo is about half that of an Aspen condo ($642/sq ft in Snowmass vs. $1,292/sq ft in Aspen based on year-to-date figures).
When it comes to market trends, Aspen and Snowmass do share one thing in common: a slowdown in the luxury market, at least in comparison to last year. Similar trends are noted in luxury markets worldwide. The strong US dollar may be keeping foreign buyers at bay, while political and financial uncertainties could be swaying domestic luxury buyers.
With so many properties under contract, September should be a busy month for closings. It’s very possible that the uptick experienced in August will set the pace for the remainder of the year.
Remember that markets move in cycles. Any healthy market has its ups and downs, just as seasons come and go. Each change presents opportunity. As the lush greens of summer give way to the golds of autumn, be sure to get out and enjoy these Indian summer days and amazing fall colors.