“We’re seeing a bit of an uptick in sales and contracts,” said T.D. Smith, president of the Telluride Real Estate Corporation.
But, he added, “it will be a long time before we have the kind of volume we had in 2005, 2006 and 2007.”
“I’d be hesitant to say that things are turning, but there has been a significant increase in interest over the last three months,” said Telluride Properties Managing Broker Albert Roer.
Roer said that his company closed on $20 million in sales during August, September and October, and anticipates closing on $6 million more this month.
“I was very happy, and I felt we’re starting to see some recovery,” said Sally Puff Courtney of Peaks Real Estate, who reported six sales during October. Still, “it’s going to be a long row to hoe.”
On another positive note, broker Steve Catsman of the Telluride Real Estate Corporation reported that although the earliest of 17 deposits on the luxury Element 52 project he represents were made over two years ago, at the peak of the market, so far those buyers remain content because they see good value in the property and amenities package for which they have signed on, including high-end finishes like plaster walls and walnut floors, a private lift with ski-in, ski-out access to the Telluride base area, an on-site ski valet, a spa and fitness center, a private wine bar, and a reciprocal agreement to use amenities at Gray Head.
A number of brokers cite several signs for optimism.
“I for one am very optimistic for an improved winter real-estate market, with the opening of the airport, new Peaks ownership, strong marketing at Capella and some of the great things going on with the ski resort,” Telluride Association of Realtors President Teddy Errico wrote in an email to The Watch.
However, Telluride Real Estate Brokers Managing Broker Dirk de Pagter, who sits on the Telluride Montrose Regional Air Organization board of directors, sounded a more somber tone on the potential for the runway improvements there to generate much new real estate activity in the near future.
“There will be no immediate impact” until there is better, more frequent service directly into Telluride, he said.
The airport is still about a year (one construction phase) away from accommodating the 66- to 78-seat Q400 turboprop aircraft it needs in order to provide the direct service flights from regional markets that de Pagter says are the key to significantly impacting the market.
At press time Telluride Finance Director Lynne Beck did not have a final number, but she confirmed that in October the town took in more than $400,000 in the three percent Real Estate Transfer Tax it collects on every eligible transaction, an increase of at least 14 percent over the same month last year.
In Mountain Village, Leanne Hart, communications director for the Telluride Mountain Village Owners Association, confirmed that the town’s three percent Real Estate Transfer Assessment collected $242,880 during October, a 32 percent increase over the same month last year.
Still, “we’re off budget by about $1.3 million,” said Hart, clarifying that the town has collected about $2.7 of the $4 million in RETA it had anticipated.
According to data provided by TAR, 31 more properties with a combined asking price of nearly $39.3 million are under contract to close by the end of the year, and one more property is on the books to close in January.
In all, 222 properties have changed hands since the beginning of the year while 24 contracts fell through during the same period, according to TAR.
“Certainly activity has picked up, which is a good sign,” said Errico.
The sales run the gamut from fractional ownerships to in-town single-family homes to vacant county lots.
Errico said that contracts on high-end lots priced upwards of $1.3 million were “brighter signs” in a market which, as of the end of September, saw 204 sales totaling $209.6 million throughout San Miguel County – a 24 percent decrease in sales volume and 29 percent decrease in dollar volume compared to 2008, and a 59 percent decrease in sales volume and 64 percent decrease in dollar volume compared to 2007, according to data compiled by real estate analyst Judi Kiernan of Telluride Consulting.
Not only have sales volumes generally decreased, so too have the number of people making those sales.
In October TAR counted 203 members, a 17 percent decrease from its 2008 membership, according to Errico, who said that the difficult market led some brokers to return to school while others switched careers, left the region, or did both.
“With the market continuing to be sluggish, we anticipate losing more members in 2010,” he confirmed.
But, making lemonade out of lemons, “It creates an opportunity for those who remain, and creates a stronger and more dedicated group that will be better positioned to succeed,” he continued.
Among 10 real estate agents interviewed for this article, some attributed the recent spike in sales activity in part to value shoppers doing deals in the wake of the region’s unprecedented number of foreclosures and other distress sales.
San Miguel County has opened 81 foreclosure files so far this year, versus 35 files in 2008 and 17 in 2007, according to County Treasurer and Public Trustee Jan Stout.
Stout has sold 23 foreclosed properties this year, although just over half of those sales began during 2008.
“I’m a little bit surprised, but not as surprised as I was earlier in the year,” she said of the increase in filings, many of which pertained to what she described as “local type properties.”
“I don’t think this year is going to slow down,” she said.
Although the tight credit markets have taken their toll on the transfer of local real estate, for buyers with cash, “This is as good a buying time as I’ve ever seen,” said George Harvey of Telluride Properties.
“For 24 years I would show people around and they would say, ‘Gee, I wish I had bought back in… [insert date],’” he explained.
“They now have that choice,” he said.
“Now is the time to buy,” agreed Courtney.
Both Roer and Smith observed that perhaps a greater share of today’s buyers anticipate living in the region full-time as compared to more speculative investors or those seeking second or third homes.
“They’re not looking to buy and flip,” said Smith. Instead they are asking, “What’s the best deal I can get for my family, our recreation and family enjoyment?”
Somewhat paradoxical, however, is the idea held by some that although real estate can be bought at present for heretofore unseen bargain prices, generally speaking, market value has not eroded.
“Some deals are getting done at distress by people who are highly motivated,” explained Roer. Yet, “Most of our sellers are not highly motivated.”
In other words, they are not, or are not yet, in such dire financial straights that they feel they must dramatically decrease their expectations. As a result, solvent sellers continue to hang on to their homes, rather than drop prices in order to sell them.
“We’ll always be among the most desired destinations in Colorado,” said Matt Hintermeister of Peaks Real Estate.
“We haven’t become less pretty; the ski area is not less desirable,” he said.
Others would argue that foreclosures and other distress sales have pushed the reset button on the bottom line.
“[Purchasers] probably come away feeling as though they were all good buys, but today’s good deals are tomorrow’s comparables,” said Nevasca Realty President Erik Fallenius. “We are now beginning to establish a new bottom.”
“They’re now our new comps,” said Courtney.
Although some brokers beg to differ with that assessment, most are hopeful that the bottom is near.
“I don’t anticipate there is going to be much more available for correction on the downside,” said de Pagter.