There is a silver lining to our market’s sluggishness: Price levels have not noticeably declined during the past year, with the percentage of settlement price vs. asking price YTD at 91.1 percent relative to the same period a year ago at 92 percent (per the MLS as of Dec. 16). The average sold price per square foot for a single family home in historic Telluride has risen 12 percent and in the Telluride Mountain Village 1 percent year-to-date. We have experienced at least a half-dozen economic downturns during my 37-year tenure in Telluride (although none as volatile as the present) and our marketplace is responding as it has previously – slower sales with stable pricing. There are several reasons why Telluride has become a “safe haven” for capital:
- A vast majority of Telluride owners have not leveraged their ownership and are under no pressure to sell.
- Telluride is an upscale, non-speculative marketplace.
- Investment is made in the Telluride lifestyle as much, if not more, than the bottom line.
- Supply is severely limited and quality tightly controlled.
- Diverse demand for property emanates from local, regional, national, and international markets.
Another characteristic of our market is its ability to rebound in advance of a full recovery of the national and global markets. There are winners in every downturn and those winners will seek the stable and proven havens for capital and lifestyle in the Rocky Mountain West. Those who have experienced “paper losses” will also gravitate to mountain resorts at the first sign of a positive economic recovery.
Other factors point to a positive marketplace in the medium term:
- The Rocky Mountain region is the fastest growing area in the country for persons between the ages of 40-60 – the baby boom generation.
- With this migration, it is just not secondary homes being purchased, but primary homes for retirement, as well.
- Key factors for this relocation include attractiveness of an abundance of public lands, controlled growth with sensitivity for the environment, a lack of vehicular traffic, and low crime rates.
There are isolated buy opportunities which investors are focused upon, but in general, what has been said about the Aspen market is also true of the Telluride market: “Today’s price may have been last year’s record, but in a flat, stagnant market, that price is still today’s record… and historically, it will be tomorrow’s discount.” For those seeking the bottom of the market, they will have found it only when price levels rise again which will be too late for “perfect timing.”
T.D. Smith is the president and managing broker of the Telluride Real Estate Corp.
"A vast majority of Telluride owners have not leveraged their ownership and are under no pressure to sell."
TD, if you can prove this we could stop wondering if the foreclosure tsunami was going to swamp us.
So how about you come up with some evidence of the above statement and I can stop wearing out the cat's scratching post.
You do have evidence, don't you?
Funny how it's always "now is the time to buy" with real estate brokers. Just once, in all the years I've known them in Telluride, it would have been nice to hear, just once, "Well, now might be a good time in the cycle to sell."
Hmmm....
Of course, now is indeed a better time to buy than three years ago when realtors told every tourist to "buy now" and every seller to "hold on" for top dollar.
Still, I suspect Mr. Smith and his ilk, gentlemen all, know that it's just as likely as not that three years from now may be an even better time to buy in Telluride.
Will prices be better ten years from now if America averts a "lost decade" like Japan in the 1990s? Yep. But it's no sure thing.
Will next year's jobless stock brokers of New York, studio chiefs in Hollywood or suddenly poorer oil barons of Houston place their bets on red in Telluride in 2009 instead of black on a million better investments?
A few, but not enough of them.
And, no, Mr. Smith, the uptick in Telluride real estate will come well AFTER people in New York, LA, Houston and Moscow start making money again. Not before. Why? Because these people are smart enough to realize they're not going to MAKE money by burying it in Telluride the next few years.
The gold is real in Telluride, long-term. And it's the snow and not the houses that will ultimately save the town. It's just that there's still a lot of fools gold that's going to take awhile to shovel out first.