It’s Spring in Telluride

The first quarter of 2012 has come to a close trailing first quarter gross dollar volume by 8% while being up 2% in transaction volume.  A robust March which showed significant gains of 29% in gross dollar volume and a 26% increase in transaction volume was brought down by the slowest January I have witnessed in my 26 year career. Total dollar volume in the amount of $9.6M represented a 62% decrease in total dollar volume versus 2011 and a 27% decrease in the number of transactions.

The lack of January dollar volume was partly attributed to the lingering effects of the US debt downgrade and debt ceiling fiasco which shut down the real estate market in late summer and early fall.  This slowdown was then exacerbated by the typically slow period of off-season prior to the opening of the Telluride Ski Area in late November. Since closings occur anywhere from 45 to 90 days from the date of contracting, the lack of off-season activity severely hurt the market in January.

February showed improvement, however was still below 2010 numbers in terms of gross dollar volume showing a 5% decrease while rebounding in transaction volume with a 4% increase. Notable sales in February included 106 Highlands Way.  This post bankruptcy single family residence closed for $6,550,000 or $475/s.f. A historic home located at 441 W Pacific Ave in Telluride closed for $1,650,000 o $650 per s.f. as well as a bank owned sale on East Columbia for $1,151,500 or $295/s.f.

The strong March which caused the market to rebound within 8% of 2011 first quarter numbers was the result of a combination of a very good Christmas Holiday and quality snow which started to fall in earnest in late January. This parlayed into the contracting of several significant homes in Mountain Village.  Most notably, 112 Autumn Lane closed for $12.5M ($826/s.f) which was the first sale over $10M since January 2010.  98 Hang Glider Lane also closed in March for $4,650,000 ($583/s.f.) and 11 Stonegate Drive closed for $3,000,000 or $486 per s.f. Regarding condominiums and townhomes, a significant sale included Castellina Unit B which closed for $2,320,000 or $470/s.f.

The first significant vacant land sales took place at the Idarado Legacy subdivision including a 1.8 acre riverfront parcel which closed for $1,415,000 and 248 acres on Horsefly Mesa which closed for $2,100,000.  Five condominiums located in the Town of Telluride also closed in the month of March totaling $4,070,000, most notably 211 South Oak Street which closed for $2,465,000 or $987/s.f.

The market continues to demonstrate a see saw effect, with distressed, bank-owned and highly motivated sellers selling on one end of the spectrum and sales of select premium properties at prices per square foot reflective of quality and location at the other end of the spectrum.  Overall, inventory slowly continues to be absorbed and certain market sectors such as single family homes in Telluride (with no new construction to create over-supply) continually proves to be the single strongest sector in the regional marketplace. Where inventory is abundant there is a direct correlation to lower prices per s.f.

Congratulations to all our brokers! Your hard work and professionalism make us proud.  Keep it up.

Granita 401A – Mountain Village
Sold Date: 4/4/12      Steve Cieciuch

109 Sabeta – Ridgway
Sold Date: 4/5/12          Polly Leach-Lychee

910 East Columbia Avenue – Town of Telluride
Sold Date: 4/24/12        Aric Maloy

513 East Columbia Avenue – Town of Telluride
Sold Date: 4/25/12        Brian O’Neill

406 Depot Avenue – Town of Telluride
Sold Date: 4/30/12        Kiki Froberg

533 West Pacific Avenue – Town of Telluride
Sold Date: 4/30/12        Kiki Froberg/Adam Black

River Club 203 – Town of Telluride
Sold Date: 4/30/12        Brian Gavin

12 Trails Edge – Mountain Village
Sold Date: 5/1/12      Eric Saunders

171 Elk Park Road – Ski Ranches
Sold Date: 5/1/12     Mike Shimkonis/Allison Templin

Palmyra 4G – Mountain Village
Sold Date: 5/1/12         Adam Black

Written by Patrick Pelisson, broker

March not only brings blue bird powder days to Telluride but gives us the opportunity to do something that you can do at very few other places on earth: Play golf and ski in the same day!

Recently some friends and I did just that. A 9 o’clock tee-time at El Conquistador Golf Club in Cortez, CO had us back in Telluride and on the slopes by 2:30 for some sunny afternoon spring skiing.

Incredible golf opportunities are available in the southern San Juan’s from late winter until late into the fall. Early and late in the year The Bridges, an 18-hole Nicklaus design course offers beautiful views and a challenging layout. In the warmer months the Divide Ranch & Golf Club is a short 40 minute drive from Telluride. The Greg Norman designed Cornerstone Club was named one of the top courses in the country by Golf Digest and Golf Magazine. Ask your broker for a tour and set up a round of golf on one of the most beautiful mountain golf courses in the world.

Keeping your eye on the ball and off the towering peaks surrounding the Telluride Golf Course may be your toughest challenge when teeing off at this breathtaking course, perched 9,500 feet above sea level. This par 70, 6,574 yard, 18 hole, mountain resort course is surrounded by the highest concentration of 14,000 foot mountains in the United States.

While the breathtaking beauty may be a distraction, the altitude works to your advantage as Telluride’s air creates less resistance against the golf ball during flight, translating to 15 percent more distance.

So the next time you come to Telluride pack your clubs. Our golf season has started and this is certainly the most beautiful place you’ll ever tee (or ski)!

Brian O’Neill of Telluride Properties represented the buyer of Lorian 16 in Mountain Village.  The property was asking $1,250,000 and sold on January 19, 2012.

Brian Gavin of Telluride Properties represented the buyer of Lot 18 Elk Run.  The property was asking $425,000 and sold on January 26, 2012.

Mike Shimkonis of Telluride Properties represented the buyer and seller of 114 Adams Way in Mountain Village.  The property was asking $1,690,000 and sold on January 26, 2012.

Mike Shimkonis of Telluride Properties represented the seller of Mountain Lodge 2307-2309 in Mountain Village.  The property was asking $390,000 and sold on January 31, 2012.

Tom Hess and Damon Demas of Telluride Properties represented the seller of 178 Geyser Drive in Placerville.  The property was asking $495,000 and sold on February 16, 2012.

Steve Cieciuch of Telluride Properties represented the seller of 950 Harcourt Trail on Hastings Mesa.  The property was asking $495,000 and sold on February 17, 2012.

Eric Saunders of Telluride Properties represented the buyer of 805 Shadow Lane in Telluride.  The property was asking $1,795,000 and sold on February 15, 2012.

Steve Cieciuch of Telluride Properties represented the seller of Pandora Lot 8 in Telluride.  The property was asking $1,625,000 and sold on February 29, 2012.

Aric Maloy and Adam Black represented 3 bank related sales they saw through to successful closings – not an easy task.

Written by Allison Templin, Broker

The buzz around Telluride this week isn’t the great powder skiing that everyone’s been doing.  The buzz this week is about blue bird skies, 40-50 degree temperatures, and slushy spring conditions…..aahhh.  If you’ve never been to Telluride during this part of the winter, you are truly missing out.  As things begin to thaw, our bones begin to warm and the tease of the yet so far away summer is here!  Spring Breakers from Texas, Arizona, and New York are all gathered in Telluride for vacation and taking a break from their busy lives in which they rarely have time to visit with one another.  Private parties where visitors host 20-30 people in their Telluride homes are not uncommon this time of year.  They are celebrating the end of winter, longer days, a break from school,  and time with family and friends!  You see skiers and visitors lounging on the beach at Gorrono or enjoying a decadent afternoon at Alpino Vino or Bon Vivant.  Why?  Because they can!

This is also the time of year where all the eagerly awaited on-mountain hike-to terrain is open.  Warm weather and blue skies make for perfect hiking conditions and beckons skiers to strap on their skis and enjoy the sunshine.  The Telluride Ski Resort’s hike to terrain includes Gold Hill Chutes 1-10 where skiers have the opportunity to ski 1900 vertical feet.  Or off of the Prospect Lift, skiers head up to Black Iron Bowl or Palmyra Peak.  Here skiers have an opportunity to hike anywhere from 10-30 minutes on the way to Mountain Quail in Black Iron Bowl.  Or if they really want to go for it, they continue hiking and ski the north face of 13,320 foot Palmyra Peak.   To have this kind of on mountain experience is truly unique.

Next time you come to Telluride, and you want to ski some of this amazing terrain, grab your favorite Telluride Properties broker to go with you.  We all welcome any excuse to ski! Hope to see you in Telluride soon.

Overview of the Town of Telluride and Ski Area

Written by Mike Shimkonis, Broker

Greetings from Telluride (with 30+ inches of new snow in the last ten days!),

In 2011, the San Miguel County real estate market saw a 17% increase in number of sales and a 22% decrease in dollar volume , year over year. The change in dollar volume/sales for the town of Telluride was a 7% increase in sales and a 7% decrease in dollar volume, year over year. For the Mountain Village, the change was a 22% increase in number of sales (because of fractional and Peaks hotel room sales)but a decrease of 40% in dollar volume. The region had its lowest level of sales in terms of dollar volume since 1997! The most vulnerable market segments are large ski homes in Mountain Village that, with limited recent exception, are not selling because they are seemingly overpriced; as well as many luxury condos in town and Mountain Village (although two Castellinas (ski-in/out near MV core) asking $2.775m each contracted in past ten days. At the same time, parts of the market have stabilized. The good news is that the number of transactions occurring in San Miguel County in 2011 is the best since 2007.

Since the downturn for Telluride in 2008, there is an overwhelming sense of a sputtering market with never-to-be-believed or who-would-have-thought new realities. Having a measured, informed perspective moving forward is prudent. Fortunately Telluride real estate sales have been steady this year with nearly an equal number of transactions occurring during each half of 2011. Not bad considering unexpected, major global events (earthquakes, tsunami, Euro crisis etc) caused everyone to pause.

In general, market prices have been reset by 20-40% while others have yet to re-establish themselves (nice ski homes in Mountain Village are moribund; property sales on both the nearby and outlying mesas are slim, luxury condos are only selling when priced to today’s market). Much depends on the property, unique circumstances and motivations in order for a property to sell. At the same time, many properties are still subject to continued pricing pressures.

The Telluride region is at historically high levels of inventory for sale in the marketplace and there are many more properties for sale than there are buyers. Over supply and under demand equals pricing pressure. It’s a great time to be a buyer, especially with cash or being qualified with attractive financing terms. About three quarters of the transactions I handled last year were cash buyers. There is certainly a sense that “catching the bottom” is driving some buyers. Others continue to espouse a “wait and see” attitude. There are yet other buyers who aren’t paying bank-owned prices but still are finding value for properties that meet their objectives.

Unless motivated by a property they can’t live without at a price that demonstrates real value, serious buyers will move onto the next property or wait until another property that interests them comes on the market. At the same time, there are several buyers who are ready to strike based on the few multiple offer situations I have been involved with this past year. There are also sellers wanting to sell who are waiting for market conditions to improve, yet the conditions aren’t getting better and, in certain market segments, likely to drop further. Any solid hint of price firmness might cause these sideline sellers to flood the market and re-exert downward pricing pressure. In the luxury sector of Telluride, price firmness is unlikely to occur in the next 12 months or at least until inventory levels subside. I expected meaningful price reductions in the luxury market to have occurred by now but they haven’t. There haven’t been many price reductions since the start of ski season with high-end properties either.

The uncertain U.S. financial and political picture along with a tenuous global economic situation has created a sense of vulnerability and a stressed global psyche. Conflicting, topsy turvy, volatile data being reported every
month by various governments and research firms is not generating confidence around the globe. Who should
we believe except our own intuition in determining how these global matters will affect our life? A general mood of fragility and lack of solid conviction that we’re going to pull out of this in a positive manner remains in collective minds.

Heading into 2012, there are certainly positive signs locally, nationally and globally. Locally, there are 42 properties currently under contract ranging in price from $69,500 for a fractional in town to $14.9
million for a home in Mountain Village according to the Telluride Multiple Listing Service. 1100+ acres of the Sound of Music ranch on Wilson Mesa recently contracted before Christmas, asking $18.8
million, by a buyer looking to park cash – certainly a positive sign if it sells. And there are several E52 contracts idling and hopefully closing soon. Nationally, the unemployment rate is falling, the U.S. is out of Iraq and the stock market is at promising levels. As long as various leaders around the globe skillfully handle their current situations as well as the unforeseen events bound to surface this year, the global psyche should firm up.

For a seller, if a buyer perceives the property is priced mark-to-market, the property stands a reasonable likelihood of selling in 3 – 12 months with perfect conditions (i.e. all cash buyer or well-qualified buyer working with a reasonable lender, a supportive appraisal and a skilled underwriter). Otherwise they will become part of the overflowing properties for sale with small chance of selling and wasting years on the market. At some point in the selling process, other factors in one’s life — such as the time value of money, the costs of maintaining a property, the opportunity costs of using money for better opportunities, and the importance of “getting on with it” in order to move into another life phase – should create strong enough reasons to get a seller to sell at a compelling price for a buyer.

Please see the subsequent blog posts for specifics on the home, condo and land components of the 2011 year end Telluride real estate market stats.

Written By Brian O’Neill, Broker

The Historic Town of Telluride and the Town of Mountain Village have always enjoyed vastly different characteristics, yet a very complimentary relationship. The Town of Telluride is the reason Mountain Village is here, but at the same time MV has sustained Town. Full time, part-time and short time residents have varied preferences as to which town they prefer.

Nowhere is this more evident than when considering the purchase of a home. There are more full-time residents in Town, most likely due to the convenience. The higher ratio of part-time residents in MV is commonly due to the increased privacy and sizes of homes/condos. Oddly, these varied preferences lead to cycles in our market.

In 2011, the region saw a decreased dollar volume in sales of 22% from 2010. Homes in Town decreased by only 7% and homes in MV decreasing by 40%. Further analysis shows that home prices in Town appear to have stabilized, most likely due to lack of inventory from decent sales velocity (21 homes sold in 2011 and 26 in 2010), while home prices in MV remain under more pressure due to a glut of inventory from a lack of sales velocity (9 homes sold in 2011 and 20 in 2010). The median home price in Town increased 14% and the median home price in MV decreased 23%.

What this translates into is an emerging opportunity as sellers in MV capitulate to the market. The MV home market appears slower to heed the market due to individual strength and therefore prices for the better products tend to hold firm, but sellers interested in selling will create opportunity along with condominium developers who look towards moving some of their swollen inventory. Once sales velocity improves in MV, the tides will change; MV will see some gentle appreciation and the Town will slow, inventories will increase and pressure will be put on pricing.

1985 – 2011 SALES VOLUME: TELLURIDE VS. MOUNTAIN VILLAGE

The snowy La Sal Mountains behind Arches National Park, Moab Utah

As Telluride locals, we spend months of our lives within our happy valley, surrounded by the massive and mighty San Juan Mountains. The San Juan’s are a sub range within the greater Rocky Mountain range that forms the nations Continental Divide. Our surrounding landscape is dramatic, with sheer granite walls, intense waterfalls and a multitude of high country streams that form the headwaters of the San Miguel River. The general impression one gets when eyeballing the Telluride surrounds is that of a lush, water abundant, high alpine paradise. However, we that live here understand the delicate balance that exists between the snowpack that hovers above us, providing the illusion of water wealth and the vast desert lapping at our flanks to the west, laughing at our precarious position. It is this juxtaposition, the gradual yet profound transition from mountains to desert, that gives our climate its temperate allure- mild winters and spectacular summers.  This desert influence plays a subtle yet important role in our remarkable weather here. The winters do offer up some powerful storms, yet they are brief and immediately followed by bluebird days of sunshine and warmth. The summers have their afternoon monsoonal downpours followed by rainbows and then crystal clear skies. I have not encountered a better climate to live in, it is as close to perfect as I could imagine.

My wife, Elaine Demas, hiking in Zion National Park - Utah.

Over the past twenty two years I have been exploring the beautiful red rock canyon country to our west. These adventures have proven to be some of the most satisfying of my life. My wife and I have always had a Volkswagen camper which is a perfect mode of transportation and lodging for our desert outings. Our children have accompanied us since their earliest years. The unique rhythms of our mountain existence have typically dictated that we take our vacations away from our valley when the ski runs close and before they open. The months of April, May, October and November are particularly compelling in the desert. The temperatures and setting are a perfect complement to the mountain existence we have been living, the best antidote to the high altitude box canyons that comforts and confines us in Telluride.

Cedar Mesa's Grand Gulch. Hand prints of the ancient ones.

The closest power spot to the west of us is Moab, Utah. This is home to Arches and Canyonlands National Parks. Moab lies about three hours drive from Telluride and is truly one of the wonders of the world with the Colorado River cleaving its way through the red rock canyons, domes and spires surrounding Moab. The biking is unparalleled and the visual panorama is magnificent. This is an easy way to gain an appreciation of the magic that the western landscape holds. We have found that going deeper and further south and west can offer up even more staggering scenery, most of it remote, wild and with varying degrees of accessibility. We have traversed much of the territory served by roads, then hiked into the Havasupai Indian reservation with its 500 foot waterfalls of aqua blue waters that spill into the Colorado River, backpacked sections of the Grand Gulch with its stupendous assemblage of ruins built by the Ancient Ones, slept on the edge of Dead Horse Point overlooking the confluence of the Colorado and Green Rivers, ruined my VW in getting to the Grand Canyons edge at Toroweap Point, hiked the Narrows at Zion National Park and floated the water filled canyons of Glen Canyon (Lake Powell).

Balanced Rock in Arches National Park, Moab Utah.

These are some of the gems that lay within striking distance of our Telluride home base, there are innumerable others waiting for us around every bend of the road or river. Telluride is uniquely poised on the western edge of the San Juan’s, looking west to the smaller mountain clusters of the La Sals, the Henrys and the Abajos- snow covered sentinels surrounded by desert. The main thrust of my message is that Telluride provides a remarkable platform from which to leap into some of the most astounding and inspiring landscapes of the world. This immense and stupendous territory is a hop, skip and a jump away, right out our back door. I came west with the barest inkling of what lay beyond the ski slopes that beckoned me to Telluride and have been happily astounded ever since. Telluride possesses all of the ingredients that provide for the ultimate life style, that is why we are here. However, I have become aware that within our big back yard to the west, extraordinary forces have been at work over eons, the product of which has resulted in a masterpiece of natural beauty- all seemingly meant for our exploration and pleasure. So, if you have thought you are lucky to be here in Telluride, you certainly are…yet there is so much more that awaits you. As this ski season winds down I am already looking west, perhaps a seventy mile float down the Escalante River, ending in LakePowell! Why not? Let’s Go!

Cedar Mesa ruin and sandstone panel.

Joshua Tree National Park.

Cedar Mesa Arch.