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community over commodity :: aspen and snowmass return In late September, four local realtors, with 90-years of cumulative experience among them, gathered in the gracious lobby of the Limelight Hotel in Aspen. Coldwell Banker Mason Morse’s Bob Starodoj, BJ Adams & Company’s Lucy Nichols, Aspen Snowmass Sotheby’s International Realty’s Doug Leibinger and Laura Maggos Properties’ Laura Maggos came together to share their impressions of the current state of the market. By Sarah Shaw / PhotoS by Karl Wolfgang
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[ FROM LEFT Realtors Carrie Wells, Doug Leibinger, Andrew Ernemann, and Joshua Saslove ]
While mid-year figures indicated a decrease from 2011’s numbers by 10 percent in dollar volume and 11 percent in number of sales, the group agreed that there’s a renewed buzz in the 2012 market. All four were quick to credit the insurgence of foreign and domestic investors—especially Russian and Texan—to the uptick in Aspen sales. Basalt, the epicenter of the real estate slump, has seen 35 percent of its inventory go under contract since the beginning of the year. Mid-valley real estate is rebounding so quickly that there’s little left to choose from. Due to the numbers, the conversation segued into a philosophical discussion of the post-recession market and the appearance of a new buyer profile in the marketplace. Coldwell Banker Mason Morse’s Bob Starodoj, a realtor with 46-years of expertise to his credit, led the discussion with some historical context. “In 1986, Aspen changed from a lifestyle to a commodity,” said Starodoj. “People came to Aspen to make money and to spin properties with little regard for the community or the lifestyle. In the past three years, all that has changed. We’re seeing a return of those who love Aspen for its lifestyle.”
Today’s buyer wants to be in Aspen, Colorado because they see it as a long-term investment for their family. They are engaged in the community, enrolling their children in the public schools, generously participating in local non-profit organizations, sharing their art and architecture and engaging in year-round recreation. Many people are engaged and realize that there is good value on the market.
Describe how this new buyer profile is affecting the current market. Starodoj: More foreign buyers are in our market now than in
past years. That’s due to the fact that their economies are much better than ours. What we’re seeing here is nothing compared to what’s happening in New York City, the Hamptons, Florida or California. Because we’re in the middle of the country, foreign buyers have to work harder to find us.
Shaw: The Texans cut a very high profile here in 1970’s and 80’s. After they left, we attracted many Hollywood types. Now, in addition to foreign buyers, we’re seeing more dispersed clientele from New York, Florida and Texas. westernhomejournal.com
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Nichols: It certainly was all about
Texas for me this summer. I’ve never seen an off-season quite like this one. Throughout the month of September, we’ve been inundated with serious buyers flying in to look at properties. That’s not necessarily unusual for this time of year, but the increase in volume is unusual. These are not the bottom fishers looking for properties with outstanding mortgages. Rather, these are people who are fair buyers with strong intentions.
Leibinger: This summer I showed property to people who are truly more engaged and interested in this area than I’ve ever seen. I saw a significant resurgence of Texas buyers probably more so than other years. Maggos: Over 50 percent of my clients
are foreign. Ninety percent of the people that have seen one of my top listed properties are foreigners. Recently, every foreigner who has purchased property in Aspen has looked at this house.
Conversely, sales in the $3-7 million range are all attributable to American clients who feel comfortable with an investment in Aspen, even if Europe collapses. Is it a buyer’s market? Maggos: The condominium market is a buyers market because it’s a numberbased purchase. Aspen’s condo market was by far the most inflated of all, and even now, I believe that prices could go lower. As an example, I sold a condo at the end of the summer for 50 percent of its 2006 purchase price. 22 westernhomejournal.com
Shaw: People who are invested in Aspen now, despite the wavering markets, aren’t complete outsiders. They have an emotional investment here that you don’t find elsewhere. Single-family homebuyers purchase with emotion because they truly want to be here. They love Aspen, Colorado. Nichols: A drop in the market is always attractive to buyers
who have lost traction, be it the down-valley family that wants to get into the school system or someone of greater means. Currently, our market is at an appealing point in terms of its perceived value. At the annual BJ Adams & Company symposium in August, our keynote speaker, Jim Taylor, discussed research he had conducted on the ways in which wealthy and high net worth individuals spend their money. With results that reveal an interesting discourse between value and worth, he suggests that buyers are more inclined to pay a premium for something if there’s an inherent perceived personal value for them. The strict value buyer has been replaced by individuals who need to achieve a variety of factors to be comfortable. They’re not looking for the very best deals, and as we all know, the best deal on paper isn’t always the best deal.
Shaw: Beginning January 1, 2013, we could see a potential
8.8 percent capital gains increase on couples whose income is greater than $250,000. This is possibly motivating many sellers to get their deals done by the end of the year.
Leibinger: It’s still a buyer’s market but I’d say we are close
to reaching the bottom. Savvy buyers with some disposable income were able to find incredible buys in 2009. Those houses are now back on the market, completely fit and refurbished at what some might construe to be a premium. However, there are plenty of buyers who are willing to pay more to get the right spot whether it’s the best location or a newly refurbished house—this feels okay to me.
Starodoj: A single family home is a lifestyle buy not an
investment. We all know many families who have relocated here because they’re so impressed with the public school system. In my opinion, people are coming here for the right reason. And for our community, it’s a much healthier situation. Buying a house and flipping it in six months— a trend we saw a great deal of in 2005-07—didn’t taste good to me.
“Today’s buyer wants to be in Aspen, Colorado because they see it as a long-term investment for their family.” - bob sTArodoj
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Are there gaps in the current inventory? Starodoj: Premium shadow inventory is appearing as more properties are sold. I continue to believe that there are A+ properties out there with sellers who are motivated due to a change in lifestyle or a desire to be in a warmer climate.
Leibinger: I am seeing many buyers with the ability to purchase
$5-10 million properties that want a clean, contemporary architectural style. The fact that much of that inventory has been absorbed might slow the market down.
Nichols: Local architects are saying that very same thing. They get calls on a weekly basis asking if they have anything contemporary in the pipeline.
Maggos: Two years ago, no one was interested in raw land. People were looking at houses as remodels. Now, there’s a great deal of old inventory that’s not very appealing and people would rather build. We’re seeing an increase in land purchases.
Is today’s buyer willing to go through a long approval process to get what they want? Starodoj: It’s about perceived value. Obviously, it’s faster to
remodel an existing property. It’s a three-year process to buy land and build a house in Pitkin County. It takes one year to get it approved and two years to build it—that’s not exactly instant gratification.
Maggos: I have clients who are currently building one of
the largest single-family homes in Aspen. They looked at everything on the market, but ultimately chose to go through the three-year process to get what they want.
Leibinger: Faced with the alternative of doing a remodel on
his existing home, my client decided he would rather build the home of his dreams. Another client who is new to this market decided, after looking at literally everything that was available at the time, to build his own home.
Nichols: For my clients, it’s an issue of time, not price. They’ve
got the wherewithal and the ability to remodel all they want, but they don’t want to waste time. Many people are opting to simply start over. I know of several architects who have been brought on to a job to do a remodel only to see it turn into a total tear down. Essentially, they are building from scratch an entirely new structure. These legacy, multi-generational homes are making a come back, and it’s not based on a desire to build a big house just for the sake of being big. These people are doing it for their family.
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Is mountain modern still the go-to architecture of choice or is there a new, more desirable trend?
Talk about the mid-valley market. Has Whole Foods had an impact?
Starodoj: In the old days, we referred to post and beam
Leibinger: Whole Foods has become a destination, and it’s bringing people from Aspen who have never ventured beyond the roundabout. Its entry into the marketplace has certainly helped accelerate a rebound in the market.
construction as “LA Log.”That style appealed to baby boomers. I think we’ve moved beyond that to a more modern style.
Leibinger: The 30-40 year old buyers want new, clean and
contemporary.The 40-50 year olds are not necessary enamored with super contemporary, but they want clean finishes. At the moment, nobody is interested in post and beam.
Nichols: The market had already started to turn (up), so while
Maggos: The term “modern architecture” can be very
Starodoj: It’s a great plus, but we need a snapshot of the down-
offensive to some people. I like to refer to it as contemporary or timeless. It’s a cleaner look that transcends stucco walls and antlers. My buyers are art collectors and they tend to base their decisions on where they can hang their art. For them, their art is just as important as the house. Post and beam construction doesn’t always work for art.
Nichols: Contemporary style is current, clean and simple, but with extraordinary materials and finishes. It’s not too edgy, and it can absorb a variety of furnishings, from typical big mountain to transitional to Euro sleek. Our European buyers and those coming from urban environments bring this sensibility with them, and then they tone it down to blend with our natural surroundings.
Whole Foods wasn’t the instigator, it certainly bolsters the sense of energy and activity in the mid valley.
valley market that’s broader than Whole Foods. We’ve seen lots of foreclosures and short sales in the last three years. Now, we’re seeing multiple offers in the $300,000-500,000 range. Whole Foods might be the lightning rod that attracts people to the down-valley market, and it will be an economic generator from the dollar standpoint. But, I take umbrage to this idea that Whole Foods saved the mid-valley. A number of articles were written about Basalt being the best new small town in the West. This publicity ran the prices up so high that the locals couldn’t afford to live there anymore.
Maggos: Basalt and Old Snowmass now have a market. There
have been more sales in these areas this past year than in the last three years. It’s a perfect time to buy there because the prices have readjusted to a place where there are actually multiple offers on one property. Now, that’s a change. westernhomejournal.com
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