Sales of Ultra High-End Homes Shape Aspen Real Estate Market

Three Aspen-area home sales last week for a combined $99 million punctuated a trend this year where ultra-high-end properties are fetching premium prices in Pitkin County’s tight residential market.

On Monday, the sale of a Moore Drive home for $32.5 million was filed in the Pitkin County Clerk & Recorder’s Office and Tuesday, the first day of December, saw a $28 million sale of a Castle Creek Road home and a West End residence close for $38.5 million.

Those deals pushed the total number of residential transactions of at least $20 million to 20 for the year, putting 2021 nearly on pace with the 24 sales topping $20 million in 2020, based on data from Land Tittle Guarantee Co. With the gross volume of Pitkin County residential sales sitting at $2.9 billion through October, according to figures from Land Title, last week’s transactions also helped push home sales over the $3 billion mark for 2021.

The numbers are defying the expectations of people who watch the market closely. Pitkin County registered $3.6 billion in gross volume of residential sales in 2020, according to Land Title. It marked the first time residential sales in the county topped the $3 billion mark, a figure some observers didn’t anticipate returning in 2021.

“I really expected things to slow down this year, and maybe they have a little bit, but the reason I expected things to slow down is that there’s not much listed,” said Randy Gold of Aspen Appraisals Group, “but there’s a lot of off-market deals getting made that are not formally listed.”

The inventory of homes listed for sale keeps getting lower: There were 52 Aspen single-family home listed in October, down 62.3% from the 138 for-sale listings in October 2020, according to the Aspen Board of Realtors. And 16 townhomes were listed for sale in October, 85.3% lower than the 109 townhomes on the market in October 2020, according to the Board of Realtors.

“Now there is nothing available between $20 million and $39 million that’s not under contract,” said Andrew Ernemann of Aspen Snowmass Sotheby’s International Realty. “There continues to be a swath of higher-end buyers, in the mid 20s to upper 40s (home prices in the millions) looking for a home. And there seems to be a sense of urgency for things that are out there.”

It’s not just the homes over $20 million that are drawing attention.

Through October of this year in Pitkin County, 10 residential deals have closed for between $18 million and $20 million, while there were four in that price range for all of 2020 and none in 2019, according to Land Title.

The ultra-high sales — those above $20 million and $30 million — create a “trickle down, if you will, where some of these higher-end purchases start dragging up the more modest-type stuff between $10 (million) and $20 million,” said Gold.

Home sales exceeding $10 million in Aspen’s more modest free-market neighborhoods like Mountain Valley and Five Trees now are normal, Gold noted.

“Those are huge numbers and it used to be those neighborhoods had more definition,” he said. “A lot of those lines have become blurred. A lot more people are being attracted to other neighborhoods that aren’t those classics like Red Mountain.”

It also makes the business of appraising properties trickier; Gold pointed to a residential property under contract for $19 million, and “not too long ago it sold for $13 million.”

“Market value is ground in prudent and rational decision-making,” said Gold, and “it’s just a really difficult time to feel confident, to know what the market value is.”

Whenever there’s talk of a hot real estate market, there’s also talk of a bubble that’s about to burst.

But not this year, according to Ernemann.

“It would be hard to say it’s a bubble, because if the market turned off tomorrow, there’s still just very little out there,” he said. “I think of a bubble as something that is going to burst. I think it’s very possible the number of transactions goes down, but mainly because of the limited inventory.”

When the real estate bubble popped in 2008, there was a “healthy bit of inventory when the market shut down,” he said “The sellers that were out there had to drastically start lowering their price. Now, if that happened, there just aren’t meany sellers out there.”

By: Rick Carroll I The Aspen Times I December 5, 2021