TELLURIDE – March marked the sixth straight month that real estate sales in the Telluride region outpaced year over year numbers, contributing to a growing sense of optimism that the industry may be on a slow road to recovery after taking a recession-induced beating that lasted through much of 2008 and 2009.
The month of March saw 32 properties totaling $26.8 million change hands in San Miguel County to represent a 39 percent increase in the number of sales and 120 increase in total dollar volume over March 2009, according to local real estate analyst Judi Kiernan of Telluride Consulting.
“I think we are on the upswing,” Kiernan allowed cautiously.
“I certainly think the feeling in town is that things are improving and everything is busier.”
The sales numbers do not include foreclosures, however they may include the sale of foreclosed properties that have been re-listed by a bank.
“Sales after a bank takes [a foreclosed property] over are absolutely valid sales,” said Kiernan.
“Those resales do represent current market value; it’s not terrific but it’s true,” she continued.
The first quarter of 2010 produced 80 sales worth $89 million compared to 52 sales worth $53 million in the first quarter of 2009 for a total increase of 68 percent in both total number and dollar volume. Still, those numbers are more than 50 percent less than the 171 sales totaling $166.6 million that transacted during the first quarter of 2007, the region’s banner real estate year.
Among the sales last month was that of the Oak Street Inn in downtown Telluride for $9.9 million, the highest grossing sale ever recorded within town boundaries.
“We’re very happy with the activity that’s happening in the first quarter,” said Albert Roer, President of Telluride Properties.
“My comfort level with where the market is greatly enhanced from where it was a year ago.”
“There definitely seems to be life,” agreed Telluride Real Estate Brokers Managing Broker Dirk DePagter.
“Nine to 12 months ago the phones weren’t ringing, there were no showings. There are definitely more people in the market.”
While Kiernan calculated the sale of nine fractional units in Telluride and Mountain Village last month, effectively representing the low end of the market, other noteworthy sales included the sale of a Mountain Village home for more than $6 million, as well as multiple sales between $1.5 and $2 million.
“I think that’s indicative of a pretty healthy market,” said Kiernan.
Interestingly, a recent New York Times article suggesting that the wealthy are beginning to spend their money more freely than they have since the recession began seems to be bearing itself out locally.
Mountain Village in particular has seen a surge in high end home sales, with six homes totaling $25.1 million changing owners in the first quarter of this year compared to the sale of two homes worth a combined $4.57 million for the same period last year.
Another six Mountain Village homes with asking prices ranging from $2.3 to $9 million are currently under contract, although the sales prices are not publicly available.
“It’s a really good indicator that people with money are not afraid to spend it,” said Telluride Association of Realtors President Teddy Errico.
“I think we have basically seen very little interest in the very high end for last two years,” said T.D. Smith, president of the Telluride Real Estate Corporation.
Now, however, “Those who can afford upscale properties seem to be focusing,” he continued.
“If things continue at the rate they’re on, Mountain Village would have a record year,” said Matt Hintermeister of Peaks Real Estate. “That’s incredibly positive.”
But no one is willing to bet that kind of pace will continue just yet.
“I’m not sure I’m ready to say that we’re turning a corner,” said Errico. “There’s still a lot of pain and punishment that’s going to be reflected in our market,” he continued, noting the numerous open foreclosure files (more than 70) listed on the San Miguel County website.
“Things are far better, but we’re not out of the woods,” agreed Hintermeister.
Smith indicated that discounting of some 20 to 30 percent below the market highs of 2007 has been a catalyst for stronger sales in some cases.
“Those sellers are not necessarily in “must sell” situations, but are often times seeking liquidity for alternative investments,” he wrote in an email to The Watch.
Additionally, “Investors are gravitating to discounted ‘Grade A’ properties and seem to be avoiding a limited number of problematic foreclosure and short sale scenarios,” he continued.
“We are steadily improving and it is no longer a case of ‘doom and gloom,’” said Errico.
“We’re pretty excited that we’re going to climb of this thing.”