Since 2009 through 2011, the Aspen-Snowmass area market has recovered about 18% in terms of total volume of sales to about $1.27 billion in the past two years. The market just in Aspen, separate from the rest of Pitkin County, has done slightly better with total sales volume increasing about 37% from total sales of $535 million in 2009 to $734 million in 2011. Although total volume of sales has improved somewhat, the market has not seen any clear signs of positive price appreciation from the values established in 2009 and 2010. So how does this market performance compare to other resort and second home markets?

Our closest major resort neighbor, the Vail Valley, has seen a similar pattern in their market although a bit more dramatic then the Aspen-Snowmass market. The Vail Valley market peaked in 2007 with a total volume of sales of $2.96 billion and the declined about 70% into 2009 when the total volume was a mere $898 million. At the same time, the average sales price in Vail declined 38% from 2009 to 2011. Since the 2009 low point, the Vail Valley market has seen a total sales volume increase of about 29% to $1.12 billion in 2011, still only 39% of the volume seen during the 2007 market peak.

Two other major Colorado ski resorts, Steamboat and Telluride, saw similar major reductions in overall volume from 2007 into 2009, but have been much slower than both Aspen and Vail to see signs of recovery. Steamboat’s overall market saw a 63% decline and Telluride’s market say a 68% decline from the peak year of 2007 into 2009. Neither Steamboat nor Telluride has seen an significant increase in volume of annual sales since 2009. However, brokers from both markets are reporting a noticeable increase in showings and contracts during the first four months of 2012, signaling that improvements in those two markets may be just around the corner..

Nationally, the picture for resort and second home markets is looking even brighter. The National Association of REALTORS reported in a recent survey that sales of second homes fell 56% between 2006 and 2010 and recovered by 7% in 2011. The survey indicated that near record low mortgage rates around 4% for a 30 year fixed rate loan, declining inventories and reduced prices are making second home markets more affordable and more attractive to buyers. For example, in Napa, California, the market dropped about 52% from its peak, but is expected to see a roughly 10% increase in prices this year. This same pattern is being repeated in the Hamptons, Naples, Scottsdale, Santa Barbara and Burlington, Vermont.

The NAR survey goes on to report that second home markets within driving distance of major cities seem to be recovering the quickest. The survey also indicated that destination resorts are at a bit of a disadvantage due to the weak economy and people looking to economize by avoiding air travel. While Aspen may currently lead the resort market recovery in Colorado, Aspen’s real estate market recovery, due to its destination resort character, may lag other national second home markets that are within easy commutes to major cities.

William Small, JD, CCIM is managing director of Frias Luxury Estates, a division of Frias Properties of Aspen that specializes in marketing luxury Aspen properties. If you’re interested in receiving his monthly market report, you can reach him at (970) 429-2419 or email him at bill@friasproperties.com.

When looking for a new family home, one of the main questions is always, “What about the schools?” Needless to say, that usual negative is a big positive in the Aspen School District.

The ranking – called the “U.S. News Best High Schools” – ranked Aspen High School No. 1 in the state over considerably larger schools in Denver and Colorado Springs, as well a number of other “charter” and “academic” schools.

Aspen High School was recently named the No. 1 high school in the state and the 59th best in the country.

In total, Colorado has 446 high schools. Nationally, the ranking pared down data from more than 22,000 schools.

Using data from mainly 2009-10, the ranking used a 3-step process to review how schools scored in areas like reading and math, compared to other state schools. The analysis also took into account economic and social demographics, which account for low scores. From there, the top 25 percent were judged on college readiness – which is accumulated from international baccalaureate and advanced placement testing data.

Based on the 2009-10 data collected, Aspen High School has an enrollment of 530 students, with 13% minority (10% Hispanic) and 4% economically disadvantaged. The school has 41 full time teachers that instruct 122 freshmen, 141 sophomores, 131 juniors and 136 seniors.

Aspen High School students scored well in proficiency testing established by the state. High school students take standard state exams to demonstrate success at the college level. The U.S. News & World Report ranking calculated a College Readiness Index based on exam participation rates and percentages of students passing at least one exam. The Index then awarded gold, silver and bronze medals to qualified schools. Aspen and 17 other state schools received gold certification.Reading proficiency is determined by Colorado Student Assessment Program (CSAP) test scores – where 68 percent of Aspen students scored “proficient” and another 20 percent scored as “advanced.” Only 1 percent scored in the “unsatisfactory” category.

In math, Aspen High School students also excelled compared to state standards. In CSAP testing for math, 46 percent scored “proficient” and another 8 percent scored as “advanced.”

Since the announcement, school district officials have pledged to continue their high standard of education and rigorous standards.

The answer to that question likely depends on the personal goals and timeframe of the seller. As a seller, are you in a hurry to sell or are you willing to be patient? There’s no doubt that the last few years have been tough on sellers. Besides waiting an extended period of time to find an interested buyer, sellers have generally been disappointed, by the offers they’ve received and some of the prices they’ve had to accept to get their properties sold, compared to the go-go years of 2005 through 2008.

Even though Aspen real estate has not been flying off the shelve in the past three years, the market has been steadily improving for seller’s. In 2009, a year that’s now seen as the bottom of the market here in Aspen, there were just over 400 single family homes and over 475 condo units on the market for sale near the end of that year. The inventory of properties for sale has dropped significantly since fall 2009. Currently, there are roughly 204 single family homes and about 177 condos and townhomes on the market for sale. In 2011, ninety-six (96) single family homes and ninety-five (95) condos sold in Aspen. This equates to about a two year supply of inventory of properties compared to an almost four and a half year supply back in 2009. These are encouraging numbers for sellers.

Another indicator to look at to get a sense of the market direction is the Aspen Real Estate Market Action index. The Market Action Index measures available supply relative to the current level of demand and average days on the market for unsold properties. It’s in essence a collective index of all market factors combined and an early predictor of future market trends. An Index Value above 30 indicates conditions favorable to sellers; whereas a Market Action Index below 30 indicates that the market is more favorable for buyers. In the fall of 2009 at the bottom of the market, the Index was around 4.0 for both single family homes and condos. Currently, the Aspen Index is at 12.4 for single family homes and 22.0 for condos and trending upward. Although still indicating a market favorable to buyers, the Index indicates that the market is in the process of moving in the direction of being more balanced between buyers and sellers.

The market conditions appear to be slowly improving, but are likely to still feel sluggish for sellers. Expect a sale to take close to a year using the typical marketing techniques. If you’re serious about selling your property this summer and interested in accelerating the process, you may want to consider quick improvements to your property, such as upgrades to the landscaping, fresh paint inside and out, and other cosmetic improvements that can be made quickly before the summer selling season starts. If you want your property to be one of the next properties sold, you might want to seriously consider more creative marketing and a pricing strategy that gets your property noticed and priced attractively relative to competing properties. It’s likely again that this summer the Aspen real estate market will see more sellers than buyers, but buyers may feel more pressure to reach for properties that are marketed aggressively, show well and are priced attractively.

William Small, JD, CCIM is managing director of Frias Luxury Estates, a division of Frias Properties of Aspen, that specializes in marketing luxury Aspen properties. If you’re interested in receiving his regular market report, you can reach him at (970) 429-2419 or email him at bill@friasproperties.com.

The total volume of sale in the first quarter for all of Pitkin County for all property types was about $207 million from 75 transactions. For just the Aspen segment of that market, the total volume was about $123 million from 44 transactions. The first quarter total volume for all of Pitkin County was about the same as the total volume recorded in the first quarter of 2010, but about 28% less than the total volume of about $289 million from 196 sales recorded in 2011. The total volume for just the Aspen submarket of $123 million was about 64% ahead of the 2010 first quarter volume of about $75 million from 28 sales, and 39% below the 2011 first quarter volume of about $203 million from 49 sales.

So what trends for 2012 can we glean from this year’s first quarter’s results? The pattern of sales activity for the overall Pitkin County market for the first quarter of 2012 and the last quarter of 2011 is very similar to the sales pattern in both 2010 and 2011. So far in the first quarter of 2012, we have not observed any breakout to the upside or downside from the past two years. In 2010 and 2011, the final year end volumes of total sales were virtually the same at about $1.26 billion.

Despite the lack of a clear diversion from the last two years, there are external forces that are likely to influence the direction of Aspen real estate through the remainder of the year. The two most obvious forces are the health of the national economy and the direction of the stock market. The national economy has continued to improve in recent months as unemployment has slowly declined and consumer confidence has improved. In addition, more and more evidence is emerging across the country that the housing market has finally turned the corner and is improving as well. The other positive note is that the U.S. stock market has seen a strong rebound of roughly 23% since last Fall 2011. All these factors bode well for the Aspen real estate market which generally does well when the stock market and national economy are improving.

A few reasons may explain why the 2012 real estate market has gotten off to a slightly slower start then the first quarter of 2011. One is likely the disappointing snow conditions which gave skiers a general feeling that the ski conditions in the west were not great this season. As a result, the less than exciting ski conditions may have keep potential real estate buyers home. Another could be the steadily declining inventory of properties for sale which has declined another 16% to currently about 397 properties listed for sale from about 475 properties listed for sale in the Spring of 2011. At the same time, the average asking price for properties in Aspen has increased about 9% in the past twelve months. The combination of fewer properties for sale and higher asking prices is likely creating a spread between buyers and sellers view of value resulting to a temporary damping effect on the overall market.

Despite a modestly slower first quarter, the early indicators for the summer season look good. For the first time since 2008, the popular Food and Wine Festival has sold out early and early bookings for summer vacation rentals are looking strong. It’s very likely that the Aspen real estate market will again pick up momentum as we head into the summer months. Assuming the national economy continues to improve, it’s likely that the Aspen real estate market will continue to improve and in 2012, the Aspen market will again show modest improvement over the past two years.

William Small, JD, CCIM is managing director of Frias Luxury Estates, a division of Frias Properties of Aspen, that specializes in marketing luxury Aspen properties. He is also the creator of the “Top Dollar” Luxury Home Marketing System.  If you’re interested in receiving his monthly market report, you can reach him at (970) 429-2419 or email him at bill@friasproperties.com. You can also follow his Aspen real estate analysis by visiting his blog site at WilliamSmall.com.

Understanding commercial real estate rents is one of the most confusing topics for small businesses. Terms such as “base rent”, “net rent”, “triple net”, gross and CAM fees all add to the confusion. However, if you’re running a small business, you better understand these terms and how commercial real estate rents are structured, or you may have a nasty surprise after you sign a new lease. To fully understand the topic, you need to understand the basic business philosophy behind commercial real estate.

Unlike a typical residential real estate lease where the landlord assumes the maintenance, tax, and structural risk of a property, commercial tenants assume these risks to some degree or another. Commercial rents are customarily quoted as either “net” or “gross” and on an annual basis. For example, a $100 per square foot rental rate would mean the tenant pays $100 a year for every square foot of space leased. If the rental rate is quoted as a “gross” rent, the terms of the lease are similar to a residential lease where the tenant pays one amount each month that covers everything.

If the rental rate is quoted as a “net” rent, the tenant typically pays a “base rent” which gives the landlord a return on their capital investment in the property; and in addition, the tenant pays its proportional share (typically based on occupied square feet) of the building’s real estate taxes, maintenance costs, insurance, property management fees and, depending upon whether it’s a single tenant or multi-tenant building, the structural costs of replacing the roof and walls in a true triple-net lease. These expenses are often referred to as “additional rent”, common area maintenance fees or “CAM” charges.

In a “gross” rent lease, the landlord is taking the risk that the real estate taxes, maintenance costs, insurance and other building expenses may increase annually above an annual escalation in the rent that’s negotiated between the landlord and tenant. In a “net” rent lease, the tenant takes the risk that the building expenses may increase at a faster than anticipated rate. If these same expenses increase at a slower rate than expected, a “gross” rent lease would benefit the landlord and a “net” rent lease would benefit the tenant. With a “gross” rent lease, whatever net rent remains after the building expenses are paid becomes the landlords’ return on their capital investment in the property.

One of the primary areas of negotiating in a commercial lease is what expenses are includable in the CAM fees. Landlords are often times trying to get capital expenses, such as repairing and replacing the building’s structure and mechanical systems included in the definition of CAM fees so they can get tenants to pay those costs. On the other hand, tenants typically are negotiating to eliminate from CAM fees any landlord expenses that are capital in nature. Capital expenditures are normally defined as any expense that has a useful life beyond a year and is related to the roof and structure of the building or its mechanical systems.

The process of comparing the total rent costs of different spaces can become very confusing for tenants when both the rent structure and CAM fees may vary significantly. The best method to use is called a present value analysis which is commonly used in the finance world to compare different investments and costs. A present value analysis is a process of discounting the total annual lease costs for each year of the lease using a discount rate (basically a reverse interest rate) to create present values of the different leases so their costs can be easily compared. The lease with the lower present value would generally be the least expensive option. Understanding these basic lease concepts can make it easier to understand the true costs of commercial leases.

Despite the European debt crisis, the unrest in the Middle East and growing government budget deficits here in the United States, the Commerce Department reported that the U.S. economy grow at a 2.8% rate in the fourth quarter of 2011, the fastest pace in 18 months. At the same time, the national unemployment rate has declined to 8.5% from a high of 9.8% in 2010. The DOW stock average is now above 13,000, a level not seen since May 2008. Some argue that this good news isnt sustainable, and they may be right, but the national economic trend seems to bode well for an improving Aspen real estate market.

In 2009, the Pitkin County market hit bottom with about $1.1 billion in total sales, down significantly from 2006 and 2007 when the market experienced $2.6 and $2.5 billion in total sales respectively. Since 2009, the overall countywide market has improved modestly with total sales of about $1.26 of sales in both 2010 and 2011. At the same time, the rest of the Roaring Fork Valley continues to suffer from slow sales volume, high inventory and record foreclosures.

When you separate out the Aspen market from the rest of Pitkin County, another picture emerges. In 2009, there were 136 sales of Aspen condos and single family homes for a total volume of $536 million with an average transaction price of about $3.9 million. In 2010, there were 164 total condo and single family home sales totaling $612 million, a 14% increase over 2009, with an average transaction price of about $3.7 million, down about 5.2% from 2009. In 2011, the number of sales increase another 17.7% to 193 and total volume increased by 19.8% to $734 million. The average transaction value in 2011 was $3.8 million, a 1.8% increase over 2010.

As far as predicting the future, it appears that the Aspen real estate market, as distinct from the rest of Pitkin County and the Roaring Fork Valley, is showing signs of strengthening and perhaps even showing the very earliest stages of positive appreciation as indicated from the modest 1.8% increase in average transaction value from 2010 to 2011. As the national economy and stock market recover, it would be expected that the real estate market closest to the core of Aspen would show the strongest signs of recovery as the wealthiest buyers increase their rate of purchasing.

It’s also reasonable to conclude that the rest of Pitkin County and the Roaring Fork Valley are likely to follow suit at some point. At the same time, a major hiccup in the international world or national economy could again derail the local real estate economy. However, with a better understanding of the current underlying market trends, Aspen buyers and sellers should be able to make more informed decisions on what’s likely to happen in the Aspen real estate market in the near future.

Tips for Sellers: Secrets of Getting the Best Deal When You Sell

Why do some properties sell quickly and others seem to languish on the market forever? The answer is often a lack of knowledge of competitive properties and how a property fits into the overall market. When larger successful companies bring a product to market they spend an extensive amount of time and money on market research to determine how their product will likely fit into the market. From this research, they develop both marketing and pricing strategy.

The process of selling a luxury home is essentially the same. A seller and their broker should thoroughly understand how their home fits into the market. If youre about to list your home for sale, you should ask your broker to take you on a tour of similar homes for sale to see how your property stacks up. Do you want your property to the next one sold or are you willing to wait an extensive amount of time for other properties to sell first before the market gets to yours? An understanding of the market of competitive properties will help you and your broker determine price and marketing strategy that should result in the best deal when you sell.

Important News from Each Aspen Submarket

Downtown Core

In February in the core, two properties closed valued over $2.0 million. Closings included 818 East Hyman for $2.3 million ($1,057 per SF); and Unit 5 at 411 S West End Street for$5.5 million ($1,453 per SF).

West End

During February there were no sales or properties that went under contract valued at $3.0 million or more. There are currently 13 active listings of properties priced over $3.0 million, down from 20 in October.

East End

In February, one property closed valued over $3.0 million in the East End submarket. The closing was 329 Park Avenue, a 4,994 SF home that sold for $4.0 million ($801 per SF).

Red Mountain

Red Mountain had no closings in February and only one property, 200 W Reds Road 6,428 SF home built in 1988, went under contract. There are currently 32 homes valued at $3.0 million or more actively on the market on Red Mountain ranging in price from $3.2 million to $22.5 million.

Smuggler Mountain

The Smuggler Mountain submarket saw no closings and one property, 537 Race Alley went under contract as a result of an auction during February. There are currently eight active listings of properties valued over $3.0 million in the Smuggler Mountain submarket.

West Aspen

The West Aspen submarket had on closing and three properties go under contract during the month of February. There are currently 71 active listings of properties valued over $3.0 million in the West Aspen submarket.

McLain Flats / Starwood

The McLain Flats / Starwood submarket saw no closings in February, but one property, 70 Larson Drive, a 7,940 SF home did go under contract. There are currently 21 active listings of properties valued over $3.0 million in the McLain Flats / Starwood submarket.

Changing Market Trends What You Need to Know

Inventory of Aspen Luxury Homes Listed For Sale:

Inventory has been falling in recent weeks. Not that declining inventory alone does not signal a strengthening market. Look to the Market Action Index and Days on market trends to gauge whether buyer interest is changing with the available supply.

Average Days an Aspen Home is on the Market:

The properties have been on the market for an average of 317 days. Half of the listings have come newly on the market in the past 253 or so days..

Median Asking Price of Aspen Homes for Sale:

The market has been on a downward trend recently and this week, while essentially flat, doesn’t break us out of that cycle.

Frias Market Action Index:

The ASPEN market is currently quite strongly in the Buyer’s Advantage zone (below 30). The 90-day Market Action Index stands at 13.12. With several months of inventory available at the current sales rate, buyers should find ample choice.    

Top Deals in Aspen Luxury Real Estate

Downtown Aspen Lot 1118 Waters Avenue – $3,050,000

 www.AspenOasis.com

This 9,016 SF lot sets just four (4) blocks from the base of the Gondola as one of just four single family lots currently on the market in downtown Aspen. Two of the other lots are located east of the Roaring Fork River and the fourth lot is located about eleven (11) blocks to the west of the Gondola. The lot is zoned R-15 which allows for the construction of 4.080 SF above grade with the potential of building as much or more below grade. The lot is located on a quiet cul-de-sac with views of Aspen Mountain. In addition, the lot is improved with a 2,209 SF existing mountain style home giving you the convenience of living in the existing home while designing a new home for the property. If you design and build a t 6,000 SF home, your land costs equal about $560 per FAR SF, a very reasonable price for downtown Aspen land.

Large Home Development Deal – 39 Polecat Drive – $1,995,000

www.AspenOaksButtermilk.com

Fully approved, ready to build seven (7) bedroom12, 395 SF new mountain contemporary home on 5.02 acres in West Buttermilk. The home design can be reduced in size to a four (4) or five (5) bedroom home of about 9,474 SF. In addition, the property is currently improved with a 2,686 SF home that was completely renovated in 1999. This is a spectacular opportunity to own a modern new well designed home with none of the headaches of getting all the approvals. Great opportunity for a buyer looking to build their own home or a developer looking for a great opportunity.

What Others are Saying About William Small and Frias Properties

“I made a decision to sell my existing home in Aspen and buy a smaller Aspen condo. One of my friends suggested that I talk with William Small at Frias Properties of Aspen. Bill was able to find me a condo to buy in a short period of time that met my needs. I gave Bill the difficult task of selling my existing home in time to close on my new condo property. Despite the depressed market conditions and a short time frame to work with, Bill was able to help me find a buyer that could close quickly on my existing home and juggle both transactions so I could close both transactions the same day. Bill’s professionalism and attention to detail helped make it all possible. I would without reservations recommend William Small and Frias Properties to anyone looking to sell or buy property in Aspen.”   Mona Long, Aspen, CO

Frias Luxury Estates Real Estate Services

Frias Luxury Estates is a division of Frias Properties of Aspen, LLC that specializes in marketing and selling luxury properties in the Aspen-Snowmass area.  Frias Luxury Estates is constantly looking for new and more effective ways to market and sell luxury properties. From its desire to develop and use the most advanced marketing technologies, Frias Luxury Estates is constantly looking for better ways to achieve the following objectives for its clients:

• Accelerate the process of marketing and selling luxury homes;
• Showcase luxury properties in a manner to create heighten interest from high net-worth buyers;
• Conveniently provides detailed information about luxury property listings to prospective buyers 24-hours a day 365 days a year;
• Effectively track all qualified prospects;
• Provide clients with up-to-date information on the results of the marketing program; and
• Ultimately achieves the highest sale price possible for its clients in the shortest period of time

With over 26 years of extensive experience in all aspects of residential and commercial real estate from brokerage to development, William Small has worked to develop new and innovative ways to market and sell luxury properties. Finding new and innovative ways to sell properties for record prices is his passion. William has authored several books and articles on marketing luxury real estate including Seven Mistakes to Avoid When Selling a Luxury Home in Aspen and Why Aspen-Snowmass Luxury Homes Take so Long to Sell and What to do About It, He is a member of the DC, Maine, and United States Supreme Court Bar Associations, and the Commercial Investment Real Estate Institute, holding the CCIM designation. Read more about his background and unique approach to the marketing and selling of luxury properties and download his FREE Reports at WilliamSmall.com

Currently, most Aspen real estate brokers, architects and builders feel that the newer contemporary, mountain modern homes sell quicker and for more money per square foot than the traditional mountain style homes. This feeling is evident from the greater number of new homes being built in Aspen with this style of architecture and interior design. If this assumption is true, what type of sales premium do you get by designing and building a more contemporary home versus the more traditional style home?

By examining recent Aspen home sales of newer homes built since 2005 we can observe some clues. Since January 2010 through now there have been forty-one sales of single family homes in Aspen that were built after 2005 and sold for $5.0 million or more. Of these 41 sales, twenty-one could be described as homes with more a traditional, European mountain style architecture and interior design, and twenty could be described as a contemporary, mountain modern style.

The average size the of contemporary style homes that sold was 8,268 square feet and the average size of the traditional style homes sold was 7,640 square feet. The contemporary homes sold for an average price of about $11.2 million and an average price of about $1,300 per square foot; while the traditional style homes sold for an average price of about $9.1 million and an average price of about $1,200 per square foot. Based on a price per square foot comparison, the contemporary style homes sold for an 8.3% average price greater than the more traditional style homes. Another interesting fact is that the traditional style homes were on the market on average 306 days while the contemporary style homes were on the market for on average of 521 days.

The style home a buyer buys is a very personal decision. A number of factors, such as location, views, lot quality, home layout and neighborhood can impact the value of a home. The statistics seem to show that buyers are willing to pay a modest premium for the more contemporary style home over the more traditional style home. There are two possible reasons for this. One is that buyer values have shifted more in favor of contemporary, modern design. The other possible reason is one of supply and demand. Traditional style homes have been built in Aspen for years, while the contemporary mountain modern design is relatively new to Aspen in the past six to seven years. Arguably, the supply of contemporary style of homes has not keep up with the demand creating an environment where sellers can charge a premium for the contemporary design. As more and more contemporary homes are built in Aspen over the coming years, it’s possible that this value premium will disappear, but for now there is clear evidence that more contemporary style homes are selling at a higher premium than their traditional cousins.

William Small, JD, CCIM is managing director of Frias Luxury Estates, a division of Frias Properties of Aspen, that specializes in marketing luxury Aspen properties. If you’re interested in receiving his monthly market report, you can reach him at (970) 429-2419 or email him at bill@friasproperties.com.

Since 2007, the Aspen real estate market has seen a dramatic decline in the number of new homes built for resale by developers. As the Great Recession took hold from 2007 through 2009, many of the new homes completed during this time frame languished on the market for sale for several years. In the end, many builders were forced to accept significantly discounted prices at or below project costs to sell their properties. But as the national economy and local real estate market continue to improve, is it time to dust off the building plans and look seriously at new luxury home development?

In 2011, the Aspen real estate market set a new record with eighteen home sales over $10.0 million. The pace of expensive home sales in 2011 exceeded the last record of sixteen sales established in 2006. The market for expensive homes bottomed in 2008 when only six properties sold for $10.0 million or more. The record sales pace in 2011 likely reflected the final phase of price discounting to move unsold inventory. While the sales volume for homes valued over $10.0 million was brisk in 2011, the inventory of expensive newer homes for sale built within the past five years has declined to less than twenty, or roughly a one year supply. If the sales volume continues at its current pace, the market could start experiencing a shortage of newer homes for sale within the next twelve months.

In addition to what could be a developing shortage of newer high-end homes, the overall market is experiencing a steady decline in the overall inventory of all homes for sale. In the fall of 2009, the inventory of homes for sale in Aspen peaked at almost 400 properties. Over the past three years that inventory has declined to less than 200 homes for sale with the overall ninety day average number of homes on the market currently in a fairly steep decline. Coupled with the trend of declining inventory, the median asking price for new listings coming on the market is steadily increasing. In the summer of 2010, the median asking price for a home in Aspen was about $4.9 million. At the end of January this year, the median asking price for an Aspen home had risen to about $5.6 million.

At the same time, the inventory of lots for sale in Aspen is at its highest level since 2002. Since 2009, only thirty-five lots have sold in the past three years, an average of only twelve lot sales per year. The Aspen market currently has roughly 75 lots actively listed for sale, which is more than a six year supply. Between 2004 and 2007 during the height of the Aspen real estate market, the market averaged about thirty-one lot sales per year, more than twice the current sales volume of lots.

With a declining inventory of all types of homes, a possible developing shortage of newer higher-end homes for sale, and a trend toward higher asking prices, the demand for new homes could build significantly over the next twelve months. With the significant lead time of two to three years to bring a new home to market, it’s possible by 2013, multiple offers and higher prices may be common for the few newer homes available to purchase. These supply and demand factors along with an abundance of available lots for sale could signal a perfect storm for new development. With these signs on the horizon, it may be time for developers to start buying up lots at attractive prices and get ready for the beginning of the next building cycle in Aspen.

Nestled quietly in Red Mountain Ranch, this prime acre lot boasts majestic views of the city of Aspen and Aspen Mountain while offering the seclusion and serenity of country living. An existing 5,154 SF home on the property features an open floor plan with breathtaking views from the living room, kitchen and most bedrooms.

Offered at $6,300,000

Fully approved, ready to build, with building permit, 12,395 SF new mountain contemporary home. New home was designed for a fabulous 5.02 acre view lot in a peaceful, serene valley setting in West Buttermilk. The home was designed to range in size from a 9,474 SF (4) bedroom home to a 12,395 (7) bedroom home.

Offered at $1,995,000

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