T.D. Smith: 37 Years of Telluride real estate experience

Date: October 27, 2010

CHRISTIE’S SALES SOAR IN DUBAI A RECORD YEAR FOR CHRISTIE’ DUBAI SALES OF CONTEMPORARY MIDDLE EASTERN ART IN 2010

TOTAL RESULT – $29 million 2009

TOTAL RESULT – $13 million REPRESENTS

117% INCREASE Christie’s, the world’s leading art business, announced that yesterday evening’s sale of International Modern and Contemporary Art in Dubai achieved $14,043,000 / AED 51,565,896, more than doubling the pre-sa le estimate of $6.7 million and confirming Christie’s market leadership in the region. The auction was 94% sold by value and 84% sold by lot. The buyer breakdown by lot was 60% from the Middle East, 28% from Europe, 10% from the Americas and 2% from Asia. The sale concludes a record year for Christie’s in contemporary Middle Eastern art, with an increase of 117 percent over 2009. See the Christie’s press release for more information: Christie’s Sales Soar in Dubai

Telski prepares for winter 2010

32 days and counting

By Katie Klingsporn
Associate Editor

The CARHOF Board of Directors voted over the weekend to approve $25,000 of state funds to help the victims of the Fourmile Canyon fire in Boulder. The Fourmile fire has displaced over 3,000 residents and has destroyed 169 personal residences, including nine homes of volunteer fire fighters. Reviewing the list of destroyed homes, it is clear that the devastation is largely impacting middle-class families, not the ultra wealthy. The funds will go to Elevations Credit Union Foundation, an affiliate member of the Boulder Area REALTOR Association, and they pledge to match dollar for dollar donations up to $10,000. The Foundation will allow BARA to direct all CARHOF funds as needed for temporary and long-term shelter through organizations like Emergency Family Assistance, United Way, the Red Cross, etc. Additionally, CAR is requesting $35,000 of disaster relief from NAR and we will know this week if the request is approved. As you know, CARHOF’s brilliant founders set it up so 15% of what is collected from interest on earnest money goes into a state fund for statewide projects and disaster relief. This set-up gives REALTORS across the state a chance to help in case of a disaster in one community. Over the years, CARHOF has donated $182,400 to help victims of disasters in Colorado with their housing. We are grateful to have the resources to help, and I’m sure we all wish the best for those displaced by the Fourmile fire.

Council accused of ‘greenwashing’

By Katie Klingsporn Associate Editor Published: Thursday, June 24, 2010 8:10 AM CDT

The Town of Telluride has made much in the way of promises for a greener town — pledging to reduce its carbon emissions and even issuing a region-wide challenge to transition to 100 percent renewable energy. On Tuesday, the Telluride Town Council approved new green building codes that, it hopes, will make strides in that direction. The codes will increase energy efficiency requirements for new buildings and require new homes to offset certain exterior energy uses — like heated sidewalks and pools — with onsite renewable production or a fee. They will also make building more expensive, and the ordinance came under criticism from some in the building and hot tub industry who accused the town of unfairness and green-washing. Despite the blowback, the ordinance passed by a vote of 5-to-2. “We are here to make this town greener,” said council member Bob Saunders. “The bottom line is, we have to try to do the right thing, not only for our community, but for the planet.” Telluride trails both Mountain Village and San Miguel County in this effort; both enacted green building codes more than a year ago. The ordinance has been in the works since 2007, when the town began updating its energy codes and standards. The regulations, which were drafted with the help of The New Community Coalition’s energy specialist Kim Wheels, made their way through at least 10 meetings or work sessions before being finalized. The new codes set stricter standards for energy efficiency by creating greater requirements for insulation, heating and cooling systems, air filtration, snow or ice melt systems, plumbing and ventilation. It ensures that homes will be built to Energy Star efficiency or better, depending on the size of the home, Wheels said. It also creates what’s called the Telluride Energy Mitigation Program. This program would require that homes with snowmelt systems, heated garages, spas or pools offset the energy used by those exterior systems either with onsite renewable energy production or with an in-lieu fee. Wheels said this program is consistent with the green building codes of other mountain towns. “The energy mitigation program for exterior heating is meant to be an incentive to get people to produce onsite renewable energy for those systems. It’s not meant to be a fee-collecting program,” she said. The new codes also require that a mechanical engineer design the heating and ventilating system if a single family dwelling is 3,600 square feet or bigger. And, because of the increased staff time and administration expected to handle the new codes, building fees will be increased by 20 percent. The changes drew the ire of some at Tuesday’s meeting. Harold Wonsel, a hot tub technician, called it green-washing. The town should be doing more by banning heated sidewalks or dealing with the vacant homes that still run lights, he said. “We should be thinking outside of the box. We can’t pat ourselves on the back and wave a green flag unless we do something more substantial,” he said. Builder Kevin Croke said the new codes will create cost burdens on builders. He said that the building community hadn’t been adequately notified and the majority of builders here already are already implementing energy efficient measures. “The whole document is fraught with problems,” Croke said. “If you pass this today I’ll be embarrassed.” And Todd Creel, a real estate broker, said the ordinance unduly punishes just a few because the codes won’t affect everything that has already been built. “I appreciate what you guys are trying to do,” he said. “But I think part of the point you are missing is that the majority of this burden is going to be dumped on a handful of people. … It just seems patently unfair.” Following these comments, council member David Oyster made a motion to continue the matter so town could hold work sessions with the building community. Nobody seconded it, however. The ordinance passed on a 5-to-2 vote, with Oyster and Mayor Stu Fraser casting no votes. Council member Chris Myers said what Telluride is doing is not groundbreaking. Pitkin County passed similar codes in the mid-90s, he said, “and the sky did not fall there. “If someone wants to put a heated garage in, they can do it, but they pay for it,” he said. “If we are really serious about our community and planet, I think we need to take this step.”

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