Second Quarter 2020 Market Report Report Written By: Elliot F. Eisenberg, Ph.D. Source: Aspen Board of Realtors Multiple Listing Service
Economic Overview Nationally
By: Elliot F. Eisenberg, Ph.D.
After a strong start to 2020, the US economy was put into a coma in mid-March to prevent the novel Coronavirus from potentially killing millions. At the same time, numerous policies were adopted to primarily assist households and businesses through the forced closure. Were it not for these massively stimulative programs emanating from Washington, DC, another Great Depression would have been a distinct possibility. Fortunately, the worst was avoided, and the shortest recession in US history ended in either April or May. As for the recovery, it will most definitely be checkmark shaped, meaning a steep initial decline followed by a slow recovery, such that by late 2022, GDP will have recovered to where it was before the onset of the pandemic. The recovery will not be more vigorous as the Coronavirus continues to infect persons in sufficiently high numbers to reduce business and consumer confidence and has resulted in a slight weakening in employment data. Moreover, there remains the remote possibility of a dreaded W-shape recovery if the virus forcefully returns in fall 2020. As for unemployment, it will take until late 2023 before employment largely returns to its pre-coronavirus state. The unemployment rate should end the year at or near 10%, but well down from its official peak of 14.4% in April. As of this writing, Congress has not yet passed a new coronavirus relief package, however, one is expected to pass soon. If this is not the case, the recovery will be materially slower.
“Fortunately, the worst was avoided, and the shortest recession in US history ended in either April or May.”
“It will most definitely be checkmark shaped, meaning a steep initial decline followed by a slow recovery, such that by late 2022, GDP will have recovered to where it was before the onset of the pandemic.”
Regarding the November elections, until recently, markets largely assumed President Trump would win reelection on the back of a strong economy, high employment, and low inflation. However, markets began to revisit that assumption over the last few months as poll numbers for presumptive Democratic nominee Vice President Joe Biden steadily improved. While the election is still close to three months away, and anything can happen, national and state polls increasingly show the odds of a Biden victory as likely and a Democratic Senate majority as a distinct possibility. It is expected that the House of Representatives will remain in Democratic hands, albeit with a slightly larger majority. Should Democrats regain control of both ends of Pennsylvania Avenue, expect meaningful changes to tax and spending policies.
“Interestingly, the Coronavirus itself has stimulated housing sales as households rethink their needs. Some may now prefer a house in a more rural area, one that is bigger, one that has a yard, or one that is newer.� In the housing market, through mid-March, sales were very strong but then quickly weakened and bottomed out in early April, with Y-o-Y sales activity down about 30%. Since then, and aided by the end of nationwide lockdowns, sales have staged a furious recovery, with first-time mortgage applications having not only made up all lost ground but now consistently up Y-o-Y over 20%. There are several reasons for the strong recovery, including record low-interest rates and very favorable Millennial demographics. Additionally, there is pent-up demand due to both supply shortages before the pandemic struck, and the early spring sales activity that was delayed by stay-at-home orders. Interestingly, the Coronavirus itself has stimulated housing sales as households rethink their needs. Some may now prefer a house in a more rural area, one that is bigger, one that has a yard, or one that is newer. Additionally, supply remains very constrained as building activity, which has been soft for years, weakened further in late March and April. Moreover, generous forbearance policies are keeping houses off the market, and potential sellers remain reluctant to have strangers walk through their houses for obvious reasons. As a result, prices have continued to rise, albeit more slowly of late. Housing should continue to do well with two caveats 1) new cases of Sars-Cov-2 do not get significantly worse, and 2) the economic recovery remains relatively strong and does not falter. The weaker and slower the recovery, the more difficult it will be for housing to continue to outperform the overall economy.
Economic Overview Colorado In response to Sars-Cov-2, the State of Colorado remains under a “Level 2: Safer at Home and in the Vast, Great Outdoors” public health order which requires all persons 11 years and older to wear a face-covering outside of their home, but encourages people to recreate and practice social distancing in the great outdoors. The rate of spread in the State remains relatively low. In Pitkin County, gatherings are limited to no more than ten individuals, and indications are that for the remainder of summer and fall, large-scale events are likely to be canceled. Early planning for this ski season centers around protocols to preserve the safety of guests, employees, and the community. Many businesses are working to implement new technology to allow for contactless transactions and shorter lines. Fortunately, the backcountry of Colorado in general and around Aspen/Snowmass Village particularly lends itself to social distancing and solitude. The Colorado unemployment rate had been essentially flat at 2.5% from October 2019 to February 2020, the lowest level in recent memory, but even in March, the impacts of Covid-19 were meaningfully felt as the rate ticked up to 5.2%. It peaked out in April at 12.2%, declined in May to 10.2%, and then rose slightly in June to 10.5%. Statewide, continuing claims for unemployment skyrocketed from 21,956 in mid-March and peaked in mid-May at 265,499. They have since slowly declined, and for the week ended July 18 were 224,204. First-time claims for unemployment that are approximately ten times pre-Covid levels indicate massive dislocation and churn in the labor market. However, in the local construction sector, building permits are tracking close to 2019 levels, and tourism numbers are surprisingly high. Statewide, median sales prices of single-family homes rose 4.4% over last June and are up 4.6% year-to-date. After several slow months during the safe-at-home phase, closed sales recovered in June and are now up slightly over last year. Active listings are down 35% compared to last year as new listings remain slow. As had been speculated at the early part of the pandemic, there are indications that some urban dwellers are fleeing the cities for resort areas like Aspen and Snowmass Village. Enrollment and inquiries at local schools are rising rapidly as second homeowners and vacationers alike look to shift their primary residence to the relative safety and expansiveness of Colorado’s high country.
“Statewide, median sales prices of single-family homes rose 4.4% over last June and are up 4.6% year-to-date.”
Historic Little Annie Cabin Aspen, Colorado
3 BEDROOMS | 2 BATHROOMS | 1,496 SQFT 1 NEW AND 1 HISTORIC CABIN LISTED BY: COLTER SMITH 970.309.2000
Aspen
Single Family Homes For the first 6 months of 2020, the median sales price of the 22 single-family homes which sold during the period was just over $7 million, up from $6.1 million for the same period last year. Average sale prices for the same period rose from $7.9 million in 2019 to $9.2 million in 2020. Both median and average prices appreciated in the mid-teens. The most expensive home sold in 20H1 was for $27.7 million, while in the first half of 2019 the most expensive home sold for $23 million. Average days on the market for single-family homes decreased slightly (-9%) to 321. By contrast, condo/townhome days on the market rose from 211 to 353, driven primarily by the higher-priced properties sold during the period.
$8
Median Sold Price
Millions
$7
$5.70M $6 $5.50M $5.24M $5
$6.10M
$7.04M
$4
15%
2019 vs 2020
$3 $2 $1 $0
2016
2017
2018
2019
2020
Second Quarter of
$10
2019 vs 2020
Millions
16%
$8
Average Sold Price $6.50M
$7.18M $7.11M
$9.24M
$7.93M
$6 $4 $2 $0
Total Dollar Volume $366M
$400
Millions
$242M
$250
$203M
$200 $150 $110M $100 $50 $0
2016
2017
2018
Second Quarter of
2019
2017
2018
Second Quarter of
$357M
$350 $300
2016
2020
43%
2019 vs 2020
2019
2020
$2,000
Average Price Per SQFT $1,440
$1,500 $1,336
$1,631
$1,434
$1,535
7%
$1,000
2019 vs 2020
$500 $0
2016
2017
2018
2019
2020
Second Quarter of
% Sold Price to Original List Price
4%
2019 vs 2020
88%
92%
92%
91%
87%
2016
2017
2018
2019
2020
Second Quarter of
Average Days on Market 243
336
2016
2017
51%
2019 vs 2020
321
351
260 2018 Second Quarter of
9%
2019
2019 vs 2020
2020
Number of Properties Sold SOLD
SOLD
SOLD
SOLD
SOLD
17
51
34
45
22
2016
2017
2018 Second Quarter of
2019
2020
Best Views in Aspen Aspen, Colorado
6 BEDROOMS | 6 FULL, 3 HALF BATHROOMS | 8,524 SQFT LISTED BY: JONATHAN FEINBERG 970.379.3405
Sophisticated Mountain Contemporary
Aspen, Colorado
6 BEDROOMS | 6 FULL, 3 HALF BATHROOMS | 8,872 SQFT LISTED BY: HALDEMAN BANNER TEAM 970.510.0037
Aspen
Condos and Townhomes There were 40 townhome/condo sales during the first half of the year (down from 74 last year) with a median sale price of nearly $2.2 million, up from $1.8 million last year. Average sales prices for townhomes and condos in the Aspen area, however, nearly doubled to $4.4 million, as many high-value units sold this year.
$2.5
Median Sold Price
Millions
$2.0
$1.68M
$1.85M
$2.16M
$1.5 $1.24M $1.35M
17%
2019 vs 2020
$1.0 $0.5 $0.0
2016
2017
2018
2019
2020
$5
Second Quarter of
2019 vs 2020
$200M
Millions
$200 $150
$164M
$159M
$176M
$118M
2017
2018
Second Quarter of
2019
$2.21M
$2.11M $1.95M
$1 2016
8%
2019 vs 2020
$50 2016
$2
2020
$4.40M
$2.99M
2017
2018
Second Quarter of
$100
$0
$3
$0
Total Dollar Volume
$250
$4
Millions
99%
Average Sold Price
2019
2020
$2,000
Average Price Per SQFT
$1,500 $1,304 $1,264
$1,977
$1,459 $1,565
26%
$1,000
2019 vs 2020
$500 $0
2016
2017
2018
Second Quarter of
2019
2020
% Sold Price to Original List Price
2%
2019 vs 2020
94%
94%
94%
95%
93%
2016
2017
2018
2019
2020
Second Quarter of
Average Days on Market 189
252
2016
2017
300 2018
211 2019
353
67%
2019 vs 2020
2020
Second Quarter of
Number of Properties Sold
46%
2019 vs 2020
SOLD
SOLD
SOLD
SOLD
SOLD
56
82
67
74
40
2016
2017
2018 Second Quarter of
2019
2020
Monarch on the Park Aspen, Colorado
3 BEDROOMS | 3 FULL, 1 HALF BATHROOMS | 3,429 SQFT LISTED BY: SCOTT DAVIDSON 970.948.4800
Castle Creek Dream Aspen, Colorado
5 BEDROOMS | 5 BATHROOMS | 3,515 SQFT LISTED BY: JONATHAN FEINBERG 970.379.3405
Snowmass Village Single Family Homes
For January through June in Snowmass Village, the median sales price of single-family homes fell from $3.2 million to $2.4 million, while the average sales price declined from $4.2 million to $3.2 million. By contrast, condo/townhome prices increased across the board, with median prices up 20% to $834,954 and average sales prices were up 21% to $1,281,607. The most expensive home sold in 20H1 in Snowmass Village sold for slightly more than $7 million. By comparison, the most expensive home sold in the first half of 2019 in Snowmass Village was for $14.3 million. Average days on market for single-family homes in Snowmass Village during the first half of 2020 declined from 323 in 2019 to 167 in 2020, while they increased from 235 to 319 for townhomes and condos.
Median Sold Price
$4.0 $3.58M $3.57M $3.5
Millions
$3.0
$3.23M $2.45M
$2.5
$2.38M
26%
2019 vs 2020
$2.0 $1.5 $1.0 $0.5 2016
2017
2018
Second Quarter of
2019
2020
25%
2019 vs 2020
Total Dollar Volume
$100 $90M
$73M
Millions
$80
$74M
$0
$22M
2016
2017
2018
Second Quarter of
2019
$4.29M
2020
$4.21M
$3.86M
$3.18M
$3.07M
$3 $2 $1 2016
74%
$60
$20
Average Sold Price
$4
$0
$84M
$40
$5
Millions
$0.0
2019 vs 2020
2017
2018
Second Quarter of
2019
2020
$1,000
Average Price Per SQFT
$946
$850
$800
$930
$762
$824
$600
2019 vs 2020
$400 $200 $0
11%
2016
2017
2018
Second Quarter of
2019
2020
% Sold Price to Original List Price
0%
2019 vs 2020
90%
90%
93%
93%
93%
2016
2017
2018
2019
2020
Second Quarter of
Average Days on Market 384
385
2016
2017
293 2018 Second Quarter of
323 2019
167
48%
2019 vs 2020
2020
Number of Properties Sold
65%
2019 vs 2020
SOLD
SOLD
SOLD
SOLD
SOLD
21
19
24
20
7
2016
2017
2019
2020
2018 Second Quarter of
Exclusive Pines Estate Snowmass Village, Colorado
5 BEDROOMS | 5 FULL, 1 HALF BATHROOMS | 5,579 SQFT LISTED BY: PJ BORY 970.319.2178
Wild Oak Estate
Snowmass Village, Colorado 4 BEDROOMS | 3 FULL, 3 HALF BATHROOMS | 5,703 SQFT LISTED BY: PJ BORY 970.319.2178
Snowmass Village
Condos and Townhomes The number of condo/townhome sales declined from 65 to 51, while single family sales declined from 20 to 7. The decline in sales in both Snowmass Village and Aspen are undoubtedly the result of Covid-19 concerns and restrictions that dissipated as the quarter progressed.
Median Sold Price $1,000,000 $800,000
$635K
$716K
$600,000
$698K
$835K
$470K
2019 vs 2020
$400,000 $200,000 $0
2016
2017
2018
20%
2019
Second Quarter of
2020
Average Sold Price $1,500,000
21%
2019 vs 2020
$1,200,000 $900,000
$69M
Millions
$60 $50 $40
$37M
$43M
$65M
$46M
$20 $10 $0
2016
5%
2019 vs 2020
$30
2017
2018
2019
Second Quarter of
2020
$668K
$300,000
Total Dollar Volume
$70
$915K
$600,000
$0
$80
$1.03M
$1.28M $1.06M
2016
2017
2018
2019
Second Quarter of
2020
Average Price Per SQFT $1,000 $800
$802 $649
$613
$600
$830
$624
2019 vs 2020
$400 $200 0
3%
2016
2017
2018
2019
2020
Second Quarter of
% Sold Price to Original List Price
3%
2019 vs 2020
94%
94%
2016
2017
95%
96%
93%
2018
2019
2020
Second Quarter of
Average Days on Market 385
345
2016
2017
104 2018 Second Quarter of
235 2019
319
36%
2019 vs 2020
2020
Number of Properties Sold
22%
2019 vs 2020
SOLD
SOLD
SOLD
SOLD
SOLD
36
47
69
65
51
2016
2017
2018 Second Quarter of
2019
2020
Capitol Peak Lodge
Snowmass Village, Colorado 3 BEDROOMS | 3 BATHROOMS | 1,487 SQFT LISTED BY: PJ BORY 970.319.2178
One Snowmass
Snowmass Village, Colorado 3 BEDROOMS | 3 BATHROOMS | 2,000 SQFT LISTED BY: JENNIFER BANNER 970.471.6200