The 2010 marketplace is best characterized as “rounding the corner.” Gross dollar sales are pacing at 90% of 2008 and are 76% above the sales production of 2009, so that would seem to indicate that the worst is behind us. Numbers of transactions have also increased 34% over 2009, and when one considers that gross dollar figures are considerably higher, this points to more transactions at higher price levels. While recent media and partisan politics have dampened incidents of closings in August, September experienced strong stats with an increase of 76% over the same month of 2009. It certainly appears that we could return to the sales level achieved in 2008 that was the beginning of the downward spiraling of our national and global economies.
According to statistics compiled by Telluride Consulting, a total of 77 sales transpired in the Town of Telluride representing total gross dollars of $84.9M YTD. A total of 109 sales occurred in the Town of Mountain Village with gross dollars of $135M. The remainder of San Miguel County experienced 58 sales totaling $46.3M. As mentioned above, it appears as though the upper end of the market is garnering considerable investor interest. According to MLS statistics, there have been a total of 36 sales in the Telluride region above $2M with 15 sales above $4M and 4 transactions between $8M – $10.1M YTD. There are 22 pending transactions above $2,000,000, and, when coupled with those already closed above that dollar amount YTD, a total of 58 sales / contracts in 2010 is a very healthy increase over only 13 such sales in 2009.
This data seems to indicate a strong renewed interest in investment in the Telluride lifestyle with its limited, high quality inventory. As mentioned in prior market updates, 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 the limited number of problematic foreclosure and short sale scenarios in the region.
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 significant higher pricing will likely lead the market into a slow, but steady appreciation cycle. With 14 homes and condominiums transacted YTD at an average price of $4,500,000 and with an average PSF of $961, this cycle is likely in motion, given that these sales represent nearly 25% of total sales volume.