Was the price of Aspen’s real estate seen as expensive last year? Consider the cost of purchasing a home in 2021.
As the year gets well underway, a recent November real estate market snapshot from Sotheby’s broker Tim Estin reveals soaring sales and shrinking inventory in Aspen and Snowmass Village.
Regional statistics indicate that November unit sales tripled and total dollar sales more than quadrupled from the previous year; year-to-date unit sales are up 47% and dollar sales are up 120%. Additionally, there is less inventory for sale: nearly a third less inventory was available in November compared to the previous year.
“These are mind-boggling numbers,” said Estin, who publishes real estate market analyses dubbed the Estin Report. “We continue to set records.”
Upward Real Estate Market Trends Ending 2020
November’s statistics indicate a slight decline in comparison to the summer’s peak months. However, despite the typically slow real estate offseason, last month saw significant increases in unit and dollar sales in an already banner year for local real estate.
Aspen Real Estate Prices – Up Up And Away
Unit sales in Aspen are up 44 percent year to date (325 condos through the month of November versus 225 last year). And in November alone, those figures increased dramatically: 38 units were sold in Aspen last month, up from 16 the previous year. This represents a 138 percent increase. The price of homes sold in Aspen has increased by an even greater margin: a 134 percent increase in dollar sales brings this year’s Aspen total to more than $2.32 billion; last year’s total at the end of November was $993 million.
If you crunch the numbers, this year’s Aspen buyers spent significantly more on homes and condos than buyers in 2019: the year-to-date average sale price in Aspen is more than $7.1 million, up from around $4.4 million last year — a nearly 62 percent increase. And Aspen’s inventory is down 22% year over year, with only 244 units available in November, down from 313 last year.
What About Snowmass Home Prices?
Snowmass Village is proving to be a viable alternative to the Aspen frenzy for some clients. Monthly unit sales in the town have increased by 147 percent, with 47 units sold in November compared to just 19 the previous year.
However, Estin noted that it is becoming increasingly difficult to find the right fit at the right price. Snowmass Village inventory is down 39% year over year, with 137 units available compared to 224 in 2019. The average unit price is also higher this year, hovering around $2.2 million, up from $1.9 million last year, a roughly 15% increase per unit.
“In summary, as Aspen prices continue to rise and demand remains unsatisfied in Aspen, yes, interest flows into Snowmass,” Estin wrote.
These increased home prices are a result of supply and demand.
For starters, homes over $10 million in price are selling like hotcakes: year-to-date unit sales for these ultra-luxury properties have more than quadrupled in 2020.
“Those sales over $10 million are driving all the averages upward — at any price point,” Estin explained.
Additionally, the combination of limited supply and high demand drives selling prices. Estin stated that his market analysis for this year reveals “unbelieveably high numbers.”
It may appear that higher selling prices and increased demand would be a strong incentive for homeowners to list their property, thereby increasing the available inventory. However, those high prices represent a stumbling block in the supply-and-demand equation, Estin explained.
“Sellers are asking themselves, ‘If we sell, what are our options?’ Where are we going to live next?'” Sales have been so robust and ferocious that new properties for sale, new listings… are not occurring quickly enough to replenish the pipeline that is rapidly depleting.
Not So Easy To Buy That Ski Home
In other words, it’s simple to sell a house; it’s more difficult to purchase one. Certain high-rolling clients in Aspen intend to wait out the COVID-19 craziness, Estin said, citing the current scarcity of multimillion-dollar properties.
“They’re enraged,” Estin stated. “They are indicating that we should simply wait for things to calm down.”
However, it’s difficult to predict when things will finally calm down.
Aspen drew a lot of attention over the summer, Estin said, because residents felt safer in an area with few COVID-19 cases. Now, as the number of Pitkin County cases increases and the likelihood of entering Red level restrictions increases, that interest in coming to Aspen may wane.
“If we enter the Red zone… does it make sense for someone from Los Angeles to visit Aspen? “Are they truly safer?” Estin was perplexed.
However, even if conditions improve in Pitkin County, the market is unlikely to automatically revert to its 2019 or even 2020 levels.
“I do not believe that a retreat to pre-COVID times would occur,” he stated. “As brokers, we have no idea where this is going.”