There’s no doubt that real estate in the Aspen area is expensive.
The big question puzzling local real estate experts is, how long will the pandemic-fueled boom keep the Aspen real estate scene a seller’s market? As summer nears its midpoint in the Rocky Mountains, sales volume and prices remain high - although some experts think the market may begin to moderate as more people become vaccinated and life becomes more normal.
A moderate market remains to be seen, though, because Aspen’s inventory remains tight and competition for prime luxury real estate is fierce. Tight inventory, high demand, and steep prices in Aspen are nothing new - because Aspen is totally surrounded by national forests, there is limited capability for development.
According to Zillow.com, the typical value of homes in Aspen is $2,231,349, which only includes the middle-priced tier of homes. Zillow also found that Aspen home values surged 10.2% during the past year.
Aspen’s real estate scene is probably best-known for "Billionaire Mountain" — the nickname for the luxury mansion-studded Red Mountain — where home prices go from $25 million up to $50 million. The area has attracted celebrities and business leaders for decades.
Not all Aspen property is that expensive - but many homes do sell for at least $4 million. It’s a market where even studio condos are fetching well into the $900,000 range.
Real estate experts are still marveling at the market boom that hit the Rocky Mountain community last year. Once travel restrictions and lockdowns were lifted in the early months of the pandemic, the sluggish real estate market took off as people began fleeing overcrowded cities for the fresh air and wide-open spaces of Rocky Mountain resort areas, including Aspen.
Those flocking to Aspen did so for a couple of reasons. Once work-from-home became prevalent as offices shut down due to the pandemic, those with means picked up stakes and moved to towns like Aspen, buying either primary or secondary homes. Luxury vacation rentals also boomed. In any case, newcomers found they could acquire large properties with plenty of room, both indoors and out. They also appreciated the privacy and the relative isolation they found in Aspen’s mountain community.
Between June and December 2020, the second phase saw so much demand for Aspen-area real estate that the sales volume set a record, surpassing $3 billion.
According to industry experts, the average number of real estate transactions reached about 90 per month during the last half of 2020 - practically triple the volume before the pandemic. That crushing demand slashed the inventory of available homes by about half, which in turn fueled the frenzied market.
Real estate agents tell of people paying cash for multimillion-dollar properties and buying homes sight unseen.
Finally, homes are coming off the market much more quickly than they did in the past. While some properties could take months to sell in previous years, the recent boom has seen some properties closing just days after being listed.
If the market has topped out, then it did so with the $72.5 million sale of a contemporary Aspen mansion in mid-June, which set a record for Pitkin County.
The Denver Post reported that the home was bought by former NHL player Patrick Dovigi, who later founded the Canadian waste management company Green For Life Environmental.
The Post reported that the home has 11 bedrooms, 13 bathrooms, and 21,476 square feet situated on four acres of land. It was built in 2006 and was remodeled in 2011, previously selling for $43 million and having an assessed value of $64,899,300.
On the other end of the spectrum, the lowest-sold that same week was a studio condo, which featured a roof-top deck with a hot tub and fire pit with views of Aspen Mountain. It sold for $565,000, according to the Aspen Daily News.
Real estate experts believe the market could begin to moderate a bit in the second half of 2021. Part of that would be due to tight inventory - but experts are also keeping their eyes on other factors, such as whether pandemic-induced trends will begin to slow as people become vaccinated and bigger cities begin to reopen.
If you have your heart set on Aspen area real estate, take the time to research the area and determine if buying a home is within your budget and your lifestyle expectations.
The first thing to do is hire an experienced agent who knows the area well, including all of Aspen’s neighborhoods and price ranges. A good agent will steer you toward the type of property and neighborhood that you can afford. By knowing what you want, you can move quickly when ideal properties come on the market.
One of the benefits of using an agent — rather than relying on real estate websites — is that agents know almost immediately when a property is listed and many know off-market properties. That can give you a head start on acquiring the property. You will also need to visit a mortgage lender and get pre-approved for a loan. The lender will use your income level and asset history to determine how much you can afford. You’ll also need to have a down payment lined up.
When it comes time to make an offer, your agent will help you strategize. They’ll know the sales prices of comparable properties, or comps, and will assist you in coming up with a competitive figure. Your agent will probably advise you to submit a “clean offer,” which is one free of contingencies. A clean offer can help move along the process and shows a seller that you are committed to making a deal.
For the best help navigating Aspen real estate transactions in 2021, contact Steven Shane for assistance.