TELLURIDE – Few would deny that the local real estate market was dealt a devastating blow as the nation’s recession-era economic woes translated to stagnant sales in Telluride, Mountain Village and throughout the rest of San Miguel County during the second half of 2008 and throughout 2009.
At a certain point, it seemed like things couldn’t get worse. The numbers on the county’s foreclosure rolls peaked at an all-time high, as people found themselves stuck with mortgage payments they could no longer afford, and with precious few buyers to bail them out.
Concurrently, Telluride and Mountain Village, both heavily dependent on fees associated with real estate sales and development, had to hack away at their budgets, cutting millions of dollars in layoffs, service cuts and postponed capital improvements.
Where real estate was concerned, late 2008 and 2009 seemed to portend the end of the world.
At least that’s how the period looked when viewed in isolation.
But take a long-range view of the local market, like the one illustrated in real-estate analyst Judi Kiernan’s latest report entitled “A 25-Year Market Analysis of Real Estate in the Telluride Region 1985-2009” published by her company Telluride Consulting, and the situation appears decidedly less grim.
“The national economic downturn, major fluctuations in the stock market, and uncertainty in the world economy have most certainly impacted real estate activity in Telluride,” Kiernan wrote in her report. “However, these external factors seem to have less of an effect on the Telluride market, over a shorter duration, than in other resort economies. The overall picture has generally been one of brisk sales activity and rising dollar values.”
For example, although 2009 saw the number of sales throughout all of San Miguel County hit a 25-year low, in terms of dollar volume, those sales still easily outpaced sales in the first 14 years of the1985-2009 report period.
Take condominium sales within Telluride. Sure, the 25 sales in that category during 2009 were a record low, but with an average cost just shy of $923,000 per condo, those condos that did sell cost more on average than any others sold in the town during the 25 years Kiernan has been tracking the market.
Outpacing every year between 1985 and 2004 for dollar volume, the 11 single-family homes that sold in Telluride last year cost an average of slightly over $1.7 million each. Or looked at in a slightly different way, 1995 was the last time just 11 single-family homes sold within the town boundaries. Except that back then, they cost an average of about $736,000 each – very nearly $1 million less per home than they did last year.
And while 2007 saw nearly $757 million in sales throughout the county, setting the highest dollar volume in history, the average price of a Mountain Village condominium in 2009 cost about $25,000 more than it did in 2007.
Additionally, 16 single-family homes in Mountain Village averaging 4,500 square feet each sold for an average price of $2.8 million in 2009. The number represents a sharp decline from the average cost of $4.1 million per home there in 2008, but it also represents a substantially smaller property than the average 5,700-square foot homes of the previous year.
It takes going back to 2000 to find home sales averaging a similar size to those sold in 2009, at which time they averaged $2.55 million each.
“These were smaller homes, so they’re going to sell for less than bigger ones,” said Kiernan.
“I’m just not seeing a real decline in the average price when you take into account the average size,” she continued.
While the historical data compiled in the report will be interesting to someone researching the local market, year by year, category by category – perhaps a developer trying to persuade a bank that investment in the region is not as risky a venture as the anomalies of the past few years might suggest – Kiernan said, even more interesting are the future trends it signals.
“The cycle is changing; we’ve come through and we’re going out the other side,” she explained.
The 161 sales totaling $194.3 million that sold throughout the county in the first half of 2010 far exceeded the same period during 2009, when just 111 properties sold for $102.8 million.
Those numbers do not include lender purchases of homes in foreclosure; they do, however, include the subsequent sales of those homes to capable buyers.
Although the most recent numbers fall just short of the first half of 2008, when hindsight tells us the region was finally coming down from its heady 2004-2007 real estate boom and 181 properties sold for a combined total of $202.1 million, it is somewhat reassuring to note that the average 2010 price of $1.2 million per sale outpaced the average 2008 price per sale of $1.17 million.
“We’re almost back up to where we were in 2008, and that’s a really positive sign,” said Kiernan.
Despite last year’s dismal real estate performance and the seemingly never-ending recession, “I think our market is actually pretty solid,” she said.
“Even in the worst of times [properties here] show resilience and increases,” she said.
“It’s still a very desirable place to be and own, they’re not making any more of it and that’s never going to change, and it still has that appeal to people who can afford to be here,” she continued.
“Telluride is a wonderful place for a long-term investment and it always will be, because there’s nothing else like it.”
Telluride Consulting’s complete “A 25-Year Real Estate Market Analysis 1985-2009” is available for purchase for $295 plus shipping. For more information contact Judi Kiernan at 970.728.3469 or visit tellurideconsulting.com
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