November 2019 Telluride Real Estate Market Update

The peaks are white and the skies are blue here in Telluride, and it’s that time of the year where there’s a palpable feeling of expectation. Ski season is coming soon.

I hope you’ll be able to join us in Telluride this winter. We’ve witnessed a lot of productivity on the mountain this summer, and it’s going to be exciting to finally reap the benefits. In October, the ski company wrapped up their helicopter logging operations. Following a 2015 Vegetation Management Plan designed by TSG and forest biologists, trees were strategically and surgically removed by helicopter to promote forest health. The extraordinary side benefit will be an additional 50 acres of gladed terrain in the Lift 9 area.

The new changes just add to the variety of terrain options on the Telluride Ski Area and bolster our claim as the best ski resort in Colorado. Our recognition as the best ski town continues to become more widespread, and it’s easier than ever to get here. 

Below is information on recent real estate activity. As always if you have any questions or want specific information on a property, please let me know.

Mountain Village

The Mountain Village residential market rocketed forward when two homes, 274 Benchmark $6,200,000 and 109 Polecat $6,550,000 closed on August 7^th.  These two sales were important because the last time a TMV home sold over $6.5M was in September of 2018. Since August 7, 2019, eight homes have sold for $35.9M and nine homes are under contract with asking prices totaling $43.4M. Under contract volume is calculated by asking price, so we expect negotiated prices to be slightly lower. In the prior 12 months to August 7, 2019 nineteen homes sold for $59.8M. So in the last 90 days volume well exceeds the prior twelve months.  

8/6/18 to 8/6/19      19 homes for $59.8M

8/7/19 to 11/1/19    8 homes sold for $35.9M and 

                               9 homes under contract for $43.5M

During the Winter of 2018/19 TMV home showings were strong, but the activity did not result in sales.  Sales were slow. I contracted 274 Benchmark and 109 Polecat in late July, and I quickly alerted my clients to this market moving activity. I believe this market strength of TMV homes will continue through the winter. In the past few years, it would not be uncommon for a buyer to make a trip to Mountain Village and the top two homes that the buyer liked would still be on the market five months later. Last winter, sellers were cutting prices, and buyers were still not acting. Now potential buyers are missing the homes they like. Serious buyers are now stepping up their search and acting. Due to the costs of construction, there are multiple homes for sale with asking prices that are less than replacement costs. By the end of this Winter, most of the better buys will be gone, and buyers will be paying more but receiving less. 

Five of the nine homes currently under contract have asking prices above $5,945,000.  Typically, when higher end homes are contracted, buyers at lower price points will gain confidence and begin to contract properties as well. 

The Mountain Village Condo sales are still strong with most of the condominium buyer attention still focused in the Mountain Village Core. I believe the best two buys are Dakota Place 6 and 7. Dakota Place may not be a full service development, but the HOA dues are low and the HOA reserve fund is very healthy. The complex location in the TMV core allows you to walk out your door to the Gondola; it cannot be beat. There are only 12 units in Dakota Place, and #6 and #7 are the only two units that are currently short term rented.  

Town of Telluride

Property values in the Town of Telluride remain firm, and there continues to be a real inventory problem. This summer, 235 East Columbia set a record setting comp for dollar per square foot when it sold for $7,625,000 or $1,914 sq ft. 

Town buyers need to act quickly on quality products, as their second options will be of less quality or cost more. That said, Town of Telluride buyers need to be very cautious about properties that lack high quality or other strong attributes. Some sellers are just not motivated or they overestimate their property’s worth because they see high sold comps throughout town. There should be a price distinction between strong quality products and properties that lack real desirable attributes. For example, the Transfer Project has seen the top floor penthouse units contract and three units on the second floor of the San Juan Building contract with prices from $1,600 sq ft to over $2,000 sq ft. These properties are contracting because they are new, high-quality products in a great location. It is my personal belief that there are two exceptional units left in the project. 

Overall, regional sales in the first quarter of 2019 were slow, and the results were negative in comparison to the prior year. This was in line with other slowing real estate markets, and many thought the whole year would be slow and end with negative year-over-year numbers. This will not be the result, as the Transfer Units will close in late November and the Mountain Village is posting strong numbers under contract. 

If you would like an update on a certain segment with statistics, please let me know as I would be happy to put it together for you. If you are looking to buy or sell, I am happy to put you into our MLS platform and set up saved searches for you. This will allow you to go directly to the MLS site and see everything on the market that meets your criteria.  

Sincerely,

Rick Fusting