The start of the 4th quarter of real estate sales in the Telluride region seems to have signaled a strong resurgence of sales. The month of October experienced an increase in gross dollar sales of 132% and numbers of transactions of 70% over the same month of 2011. Closings are largely the result of contracts “booked” during a very active late summer and early fall. Sales through the first 10 months are up 22% and numbers of transactions have increased 9%.
In the recent past, 2010 experienced a healthy recovery after a rather slow 2009 with an annual increase in sales that year of nearly 20%. The downgrading of US debt and the problematic Euro dampened the market in 2011, but with $103 million of transactions currently under contract (MLS), the market should outperform a rather stellar 2010. Investor attitudes seem to be shifting to resort real estate as a safe haven for capital in markets that have “bottomed out”. Telluride, with its relative limited supply of inventory, provides further assurances related to possible further deflation in value and, of course an intangible quality of life in a precious uncrowded resort environment.
The Historic Town of Telluride, as is often the case, has been the forerunner of market improvement. Gross dollar sales YTD have increased 16% ($102M vs. $88.3M) and during that same time period, single family home sales gained 47.4% ($51.3M vs. $34.8M). It is also notable that vacant land sales rose 170% ($11.8M vs. $4.4M) as the design / build process gains momentum. It is also notable that the average per square foot price of 2012 vs. 2011 is 10.7% higher. Nineteen homes have closed above $1M, 13 residences above $2M and 4 properties achieved higher than $1,000 PSF, YTD.
The Town of Mountain Village gained considerable strength, as well, with gross dollar sales demonstrating an increase of 39% ($99.2M vs. $71.5M). Sales of single family homes increased 107% ($42.9M vs. $20.7M) with sales of condominiums gaining some strength (rise of 13% — $41.9M vs. $37.1M). Values also appear to be increasing in the Village, 2012 vs. 2011, in excess of 15%. The high end is demonstrating recovery with 5 properties under contract at an average price of $6.2M, with two properties listed above $10M.
The balance of San Miguel County experienced a moderate increase in gross dollar sales from $54M to $59.8M, an increase of 10.7%. It is interesting to note that the MLS reported a $17M sale of 2,444 acres and another exquisite, historic ranch totaling 821 acres listed at $15.75M is currently under contract. There is, once again, significant interest in farm and ranch property in the Telluride region most likely because of a hedge against inflation and values that have stabilized at attractive price levels relative to 2007.
In summary, the Telluride real estate marketplace is demonstrating resiliency during an election year and is in the midst of a significant rebound relative to 2011. On the other hand, there are still excellent buy opportunities heading into 2013.
TD Smith, Chris Sommers and Alex Smith