Aspen-area real estate rides out rough first half

ASPEN — A June swoon contributed to a poor first half of the year for the Pitkin County real estate market in terms of total-sales dollar volume.

Despite the sale of a ranch and adjoining property in early June for $49 million by Prince Bandar bin Sultan, the dollar volume of all sales for that month were down 11 percent compared with June 2011, according to deeds filed with the Pitkin County clerk and recorder.

For the first half of 2012, the dollar volume of all sales was $600.23 million. That is down 15.5 percent from $709.57 million last year.

Despite the dismal numbers, real estate agents aren't ready to throw in the towel yet on this year. Craig Morris, a partner in Aspen Snowmass Sotheby's International Realty, said he foresees a strong second half for several reasons.

“I'm normally not a rah-rah cheerleader type. I'm pragmatic about it and tell it like it is,” Morris said.

There has been consistency in sales prices and in the price per square foot over approximately the past 18 months, according to Morris. That is a positive development, given that prices had dropped significantly early in the recession, he said.

“There are clear signs the market is level and it has firmed up,” Morris said.

Another encouraging factor is the types of buyers. Morris said his firm has had a lot of real estate showings this summer, and many deals are scheduled to close in coming months.

“For the first time in several years, buyers are coming up with reasons to buy rather than finding reasons not to buy,” he said.

In addition, the market was infused with new inventory this summer. Many prospective sellers who were on the sidelines have decided the time is ripe.

“Last week and this week there's a ton that's entered the market,” Morris said. A key building momentum is pricing the property at an appropriate level for the current market. Some of the residences that were recently listed for sale are “overpriced,” he said.

Tim Estin of Coldwell Banker Mason Morse Real Estate said the slide in the total dollar volume is an important indicator of how the real estate market is faring, but not the only factor.

“It's the bottom-line number and at the end of the year, it's the one that everyone looks at,” he said. Estin believes several factors contributed to the dollar volume falling. Last year there was a surge in sales of homes prices above $10 million. There haven't been as many sales in that price range this year.

This year there are more macro-economic issues affecting the psyche of buyers — the Euro-zone crisis, the so-called fiscal cliff of mandatory cuts facing the U.S. government if Congress cannot approve a budget that achieves certain reductions, and the November election.

Given that level of uncertainty, Estin said he is pleased by the number of transactions this year, even though the dollar volume is down. Estin writes a quarterly market analysis called The Estin Report and he takes a snapshot look each month. For his report, he examines sales data for Aspen, Snowmass Village, Old Snowmass and Woody Creek. He doesn't look at fractional-ownership sales because mass closings at any given time can skew data, he said.

In the geographic area where he is looking, the number of transactions during the first half of 2012 was “so close” to the same period of 2011. That is significant, he said, because that shows buyers are out there.

In Pitkin County as a whole, there were 336 real estate transactions during the first half of 2012 compared to 389 during the first half of last year. However, in the market segments that Estin examines, there were only 11 fewer transactions for a decline of 7 percent.

Like Morris, Estin anticipates a robust market over the next few months. One particularly promising development this year is the sale of raw land. There were five sales of vacant lots in June 2012 compared to zero for the month the year before. For the first half of 2012, there were 20 sales of vacant land compared to nine for the first half of 2011.

Estin said inventory of speculative homes has dwindled drastically because so few have been built since the recession struck. There is demand for that type of house so developers that can get financing are rushing to fill the void, Estin said.

“Typically, when land sales start to pick up, it is an important marker of a market transition,” Estin wrote in his second-quarter report.

Andrew Ernemann, a real estate agent with B.J. Adams and Co., noted that 2011 started strong, then fizzled. This year the number of transactions has been stable, suggesting the dollar volume will equalize. Other positive indicators for the upper-valley market are a stable inventory and a decrease in the size of discounts needed to close a sale, according to Ernemann. In many cases, the average sales discounts are 10 percent lower than asking prices, an improvement over the recession-plagued years.

Prices are “very stable” in Aspen's single-family home market despite the drop in dollar volume, Ernemann wrote in his mid-year report.

Morris said he expects the deficit in the total sales dollar volume from the first half of the year to be erased by the end of summer.

“There's a lot of positive energy out there,” he said.

scondon@aspentimes.com

Source: http://www.aspentimes.com/article/20120703/NEWS/120709965/1077&ParentProfile=1058

Aspen-area real estate sales end 2011 flat compared with 2010

A frenzy in the upper end of the Aspen-area real estate market wasn't enough to sustain a rally in 2011 over 2010.

Realtors said 2011 will be remembered most for strong sales in the $10 million to $20 million range. But it also could be remembered for things that might have been.

The market looked like it was storming back to life during the first half of 2011, but it fizzled in the second half. A poor performance in December left 2011 essentially flat compared with 2010 in total dollar volume. The Pitkin County real estate market had particularly rough months in July (down 47 percent from the same month the prior year), October (down 54 percent) and December (down 38 percent).

Property transfers of all types totaled $1.27 billion in sales in 2011, according to deeds recorded in December at the Pitkin County Clerk and Recorder's Office and a report on sales through November compiled by Land Title Guarantee Co. There was $1.26 billion in sales in 2010.

The number of transactions increased 10 percent to 756 in 2011 from 689 the prior year.

Realtors examine statistics in a lot of different ways, so assessments of 2011 performance vary. Some just look at free-market residential property in Aspen and Snowmass Village rather than property sales of all types throughout the county. Looking at countywide statistics from one year to the next provides a glimpse at the big picture.

The total dollar volume for the first half of 2011 was up 24 percent over 2010, lining up the real estate industry for its best year since 2007. But the uncertainty over the U.S. debt crisis and ongoing economic turmoil around much of the world, particularly in Western Europe, cooled activity, said Brian Hazen, vice president for Coldwell Banker Mason Morse.

Nevertheless, there were signs of strength in the Aspen and Snowmass Village part of the market, especially in the $10 million to $20 million range, Hazen said. His analysis showed that during calendar year 2010 there were 13 sales of homes in that high-end price range for a total of $182 million. Last year there were 18 sales of homes between $10 million and $20 million for a total of $278 million.

Steven Shane, owner of SDS Real Estate, said sales of unique high-end properties continued to “flourish” in 2011 “if [sellers] have adjusted their pricing to a certain extent.”

Buyers are out there, he said, but they are doing their homework, and they are determined not to pay more than what they believe the market dictates.

“They didn't get to that level by being stupid,” Shane said.

Sellers are generally responding with discounts. There is enough inventory to maintain a buyers market. Sellers who have the financial wherewithal to hold steady on prices will likely see their property sit for some time, Shane said.

The Aspen-area real estate market remained challenging in 2011 in the sense that “buyers continue to have a sense of entitlement,” Shane said. Many buyers come from markets that were hit harder than Aspen by the recession, so that feeds their expectations for discounts. Aspen-area prices generally fell by about 30 percent.

Brent Waldron, broker associate with Chaffin Light Real Estate, said generalizations really don't apply to 2011. There were record sales early in the year but also incredible discounts necessary to move property, he said.

Waldron said the first half of 2011 was bouyed by a handful of record price sales. That made it appear the market was stronger than it really was, he said.

“I think it was a false rally,” Waldron said. “There were some remarkable sales that really weren't indicative of the market.”

Hazen said there has been a “slight appreciation” recently in the prices for the best properties in the high-end market, thanks in part to good absorption of inventory.

“It certainly has bottomed out — probably a year ago, frankly,” Hazen said.

Many distressed sellers scrambled to unload their property in 2009 and 2010. In 2011, there were 47 bank sales of property in Pitkin County through November, accounting for $32.3 million in sales, according to Land Title Guarantee Co.

Shane said the best of the “value sales” are long gone. Sellers still need to offer discounts to complete a deal because buyers have so many options.

“Whatever seller wants to play ball is the one that wins,” Shane said.

Another development is the lack of new home inventory. Shane said spec builders put the brakes on development after the recession. But the new home inventory has evaporated, and spec builders are taking note. He expects some new spec homes to come on the market before 2012 is over.

Shane said most of the buyers he encounters are “superstars of the financial world.” There is a perception that Aspen is attracting a lot of buyers from specific international markets, but he thinks that is more myth than reality.

Even with the strength of the high-end market, the average and median prices of single-family homes in Pitkin County fell in 2011. Through November, the average price was $4.21 million or a decrease of 3 percent from the average price in 2010, according to Land Title Guarantee Co.

A median price of $2.84 million for single-family homes in Pitkin County was down 11 percent through November compared with all of 2010.

Shane and Hazen both said they see the potential for further recovery of the upper-valley real estate market in 2012. Annual sales dollar volume won't return to the $2.5 billion level from pre-recession years, Shane said, but it could easily increase from $1.27 billion racked up this year.

The key for successful brokers is to be creative, he said.

“It's not business as usual. It's business as unusual,” Shane said.

Source: http://www.fnno.com/story/moving-average-crossovers/331-pennsylvania-real-estate-investment-trust-bullish-moving-average-crossover-alert-pei-moving-