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.