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The Telluride real estate marketplace experienced its seventh consecutive
month with an increase in sales over the prior year. Fourth quarter sales of
2009 increased 231% over that same quarter of 2008, producing $114.9 million
in dollar volume of transactions. Dollar volumes in January, February, March
and April exceeded those same month’s sales in 2009 by 55%, 86%, 120% and
350%, respectively. Perhaps a more important indicator of a rebound in the
marketplace is the fact that the numbers for April are nearly 2/3rds of
those realized in April 2008. At that point in time, sales began to decline
sharply with the ongoing economic crises.
According to Telluride Consulting 107 transactions have closed year to date,
with 82 of those sales occurring in the Telluride Mountain Village and
Historic Telluride. Six homes closed in the Village at an average of $5.2
million and 8 Homes in Historic Telluride at an average of $2.4 million.
According to the MLS, there are 79 properties currently under contract in
both those communities, totaling $115 million in potential sales volume.
Eighteen transactions YTD have been above $4 million, 14 above $2 million
with Historic Telluride experiencing a transaction at $9.9 million and the
Mountain Village two sales at $8.0 million and $10.1 million.
While we do not anticipate a boom cycle on the near horizon, this data seems
to indicate a strong renewed interest in investment in the Telluride
lifestyle with its limited, high quality inventory. The catalyst for
stronger sales has been a willingness by some sellers to accept price levels
20-30% below the market highs of 2007. Those sellers are not necessarily in
“must sell” situations, but are often times seeking liquidity for
alternative investments. Investors are gravitating to discounted “Grade A”
properties and seem to be avoiding a limited number of problematic
foreclosure and short sale scenarios.
With the velocity of sales increasing, it is likely that a “bottom” has been
reached and sellers will over time resist these deeper discounts and the
market will respond with gentle appreciation. Those sellers who have held
firm with price structure must remain patient, but oddly have contributed to
“setting the bottom” and will influence the rise in future values. Premium
properties at significantly higher pricing will likely lead the market to a
gentle appreciation cycle. With thirteen homes transacted in the past 120
days at $800 PSF – $1,000 PSF, this cycle is likely in motion.
We look forward to hearing from you.
Regards,
TD Smith & Chris Sommers
