aspen / snowmass real estate
real estate round table
Summer seasons in the Upper Valley typically yield approximately 54% of the year’s total real estate transactions. Will we see that this season? Probably not. On the cusp of another high country summer, four local realtors gathered for lunch at Mezzaluna in Aspen to discuss the future of real estate in the valley. Without exception, everyone at the table felt positive about the outlook for recovery in the near future. Records will not be broken, but that doesn’t matter. What is important for buyers, say these four, will be building memories in this place. A good investment is not out of the question, but the “get rich quick” days are over. Now, more than ever, it is about spending quality time with family and friends in an environment where value equates to far more than just the bottom line. By Sarah Shaw / Photos by Karl Wolfgang
Qnew normal? [ FROM LEFT Realtors Carrie Wells, Doug Leibinger, Andrew Ernemann, and Joshua Saslove ]
:: what is the
Describe the current state of the real estate market.
Doug Leibinger, Aspen Snowmass International Realty: I am very encouraged by the level of interest on the buyer front. Many people are engaged and realize that there is good value on the market. Andrew Ernemann, BJ Adams and Company: Since 2008, the name of the game is comparison. Last year, we started out with a big pop and thought things were really strong. Perhaps it was pent-up demand or maybe just a heightened sense of confidence. Then, national debt concerns piqued and Europe played into the mix, and we saw things taper off. This year, we are on an even keel with a more stable confidence in the market, and sellers are a bit more savvy about price. Joshua Saslove, Joshua & Co.: We have had a considerable amount of increased activity in the first five months of this
year, but a lot of that is a result of people taking time to reach a decision in their own minds. The higher end is most active, proportionally speaking, for several reasons. Those who have the financial ability to make a large investment have been quiet for several years because it was inappropriate to be extravagant. There are other ways to make major acquisitions. For example, a buyer can acquire a serious piece of art over the telephone anonymously. That may speak to why the contemporary art world is hitting all new records suddenly. In the meantime, “rich” people may have gone quiet, but after a point when it looks like the public can digest what is going on in the world, the need to be quiet may be dissipating. Carrie Wells, Coldwell Banker: When it comes to family and lifestyle, people are still pursuing what they want, whether it is a very pricey piece of art or a house in Aspen. For the upper tier of the market, it is more about timing and less about the market. We are trying to read more into it than we really should.
The bottom line is that people have always wanted to have a place in this area. It is to our advantage that we have had this market correction because now there is not such a disconnection between the buyer and seller.
We are always going to have our Texas and Chicago buyers, but it’s interesting to see a growing dynamic of international buyers that have fallen in love with the place.
Is Aspen still a “Lifestyle” sell?
Have the recent company mergers impacted the local real estate landscape? Tell us why these changes occurred, and describe the benefits of having a national affiliation?
Ernemann: Absolutely. Aspen will always attract the kind of buyer who says, “I have the money but I have only so much time. I want to have a place in Aspen that I can enjoy with my kids and grandkids.” Yes, the price correction and more inventory choices on the market are a bonus, but the fundamental reasons why people continue to invest in Aspen are still there. Leibinger: That component of just spending quality time away from cell phones and the barrage of media is more important than ever. People want to interact in a quality way with their family. They want that fun component that was missing in the period just prior to the recession. Wells: For many of our clients, time is their most valuable commodity. Many high-end sales were dictated simply because those clients found the right property at right time. Saslove: The one thing that money cannot buy is time. I think that pushes a decision considerably. Ernemann: Absolutely. Aspen will always attract the kind of buyer who says, “I have the money but I have only so much time. I want to have a place in Aspen that I can enjoy with my kids and grandkids.” Yes, the price correction and more inventory choices on the market are a bonus, but the fundamental reasons why people continue to invest in Aspen are still there.
Wells: I have been with Coldwell Banker since 1995. I knew then that it was important to have a global reach and networking opportunities with brokers within the same organization. When you get to know brokers in similar markets, it is a real benefit and an added value for exposing our properties.
“Environmentally, culturally, and intellectually there is nothing like it.” Is Aspen still the premier resort buy? Wells: There is no question that the mind, body, and spirit component is very attractive. Aspen outshines all of our competitors because we have so many cultural amenities already in place.
What is driving market transactions now, and has the buyer changed? Ernemann: In the last few years we have seen a lot of activity on the high and low ends of the market. That’s gone. The good values on the low end have been cherry-picked, and those unique top properties that might have not entered the market otherwise have been snapped up. Buyers are branching out to find other areas where there are good values, like Snowmass Village and West Aspen.
Ernemann: We have an incredible natural environment here. Without the social capital that is here, we could be just another pretty place with a nice climate. Aspen is the only resort town that was founded on a concept. Every other resort began as a town in search of a concept.
Saslove: All buyers want value. Nobody needs a steal, but they don’t want to pay retail either. Right now, Aspen’s middle market is hovering right around $4 million to $8 million. That is 1/100th of 1% of the overall market. Five years ago, I would have suggested that 2-3% of our market would consist of foreign buyers. Today, I would say it’s 10% or higher.
Saslove: No matter where you go, Aspen always ends up on top. Environmentally, culturally, and intellectually there is nothing like it. Of course, it took 130 years to get like this.
Leibinger: I have spoken with potential buyers from London, Hong Kong, Tokyo, and Sydney. All are very value driven and realize that the Aspen market is worth investing in.
Ernemann: It has been great for our local real estate market to have this consolidation. We all realize that there is value in having that global reach. The reality is that all brokers have access to the same tools. Those tools just come to us through varying platforms and at a different cost, depending on where we are and who we are with. These mergers have caused us to be a bit more creative about how we market our properties. At BJ Adams, our discussion is less about that big name and more about what we offer as individual brokers. There is definitely added value in the infrastructure that comes with a big name. On the other hand, there are also clients out there who prefer not to work with a big firm. I don’t think there is a right or wrong way to go about this - it’s a very individual decision on behalf of buyers and sellers. We all offer something different.
(continued)
Have the recent company mergers impacted the local real estate landscape?
Saslove: That product is a great investment. Rent it to cover mortgage costs. Perhaps that is the play: buy in the midvalley while the world continues to turn.
Leibinger: The merger between Chaffin & Light and Sotheby’s was virtually irrelevant to my clients. Like most realtors, I have forged great relationships with these people and they will follow me wherever I go. We all work hard and we have a good work ethic and knowledge base. Buyers and sellers in this town are very fortunate because we have such a professional group here to serve them.
Ernemann: When properties are available below replacement cost – below what you could buy the land and build it for – that is the time to get in the game.
Wells: Our business comes through referrals from past customers and clients. Affiliation is just an added benefit. The bottom line is that people continue to do business with us because of how we do business. People buy from people.
Leibinger: The Old Snowmass sector market segment is growing rapidly. That market segment was stagnant even during the time when the market was booming. Now, people are seeing it as an opportunity to be somewhere unique, but close to town.
Ernemann: The best service we can offer buyers, no matter if we are a boutique firm or part of a larger affiliation, is to know the properties and market trends. Saslove: A lot of sellers are asking, “How will you market my property and how will it be seen? What can Christie’s bring to the deal in addition to Joshua and Co.?” We believe that Joshua and Company is the brand, and that Christie’s is the secondary brand. Christie’s is 240 years old and has an international position through the art, auction, wine, and jewelry world. It is beneficial for us, especially when engaging sellers. Do buyers see it? Yes, but it is probably not as significant. This is an educated market and everybody knows somebody before they arrive. Ernemann: A lot of these mergers and acquisitions were driven by corporate business decisions. It doesn’t matter whether you’re affiliated with a boutique firm or the biggest business on the block. Going forward, the only way to succeed is if we do a good job for our buyers and sellers.
Where are the great real estate opportunities in 2012? Ernemann: Basalt came to a screeching halt four years ago, and now it is seeing annual gains of +/- 30%. You have to go somewhere from zero.
Saslove: I have seen a lot of legacy properties become available. These are unique properties that also contain some financial opportunities.
What does your crystal ball predict for the rest of the year? Wells: Spring has been more active than February and March, which trends well for having an upbeat summer. My forecast is still for slow and steady progress. There won’t be any spikes in the market, but indicators suggest that summer will definitely be healthier. In general, we need to maintain a broad perspective, and not constantly compare from year to year. Leibinger: I am optimistic that there is more alignment in the minds of sellers as they come to terms with what the market was and where it is now. There are many buyers waiting patiently in the wings for things to become available. I think we are going to see more action because of the perceived value. Ernemann: It is difficult to convince sellers that their prices are too high. In some cases, properties will move quickly if prices decrease just a bit. At the same time, buyers want to know why prices are going up or down. Can I tell clients that we are growing at 20% annually? Absolutely not. I can say with confidence what I think a property is really worth and what I think about a specific neighborhood. We have clarity in direction now that is all about timing and confidence.