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.
TD Smith & Chris Sommers