Greetings,
Personal Commentary: “There’s gold in them thar hills” – 1875 when the first gold was discovered in Telluride. By 1900, $360 million of gold was extracted from the mines near Telluride and the population of Telluride was about 5000.
On March 14, 2020 the governor of Colorado closed all ski areas due to a national covid pandemic. For approximately two months, the real estate market sputtered until the first week in June. Then all heck broke loose and buyers were calling to escape the cities, find a place they could ‘hunker down’, somehow work remotely and set up online learning for their kids and grandkids. They also wanted an environment where they could get outside as much as possible to stay sane and healthy.
Lesson: The gold miners of 1875 should have held on to their real estate!
Thoughts about the real estate market for Telluride in 2021: Colorado is a beautiful state with a wide variety of wonderful summer and winter resorts. However, Mother Nature has significantly restricted the development in and around Telluride and the Mountain Village due to its tight terrain and mountains. There hasn’t been a new subdivision in or near either town in over twenty years. In my opinion the Telluride and Mountain Village supply of real estate is the most restricted of any resort in Colorado.
At the end of 2010, there were about 1,600 listings in the Telluride MLS in San Miguel County. On December 31, 2020, there were 344. If something comes on the market that is in your price range and reasonably close to what you’re looking for, put in an offer today at asking price or very, very close to it and pay cash if you are able.
Observation: Inventory goes away faster as it shrinks. By the summer I may get to play enough golf to lower my handicap. There is always a silver lining 😊
Prediction for 2021 Telluride Market: Due to a lack of inventory, we predict the dollar amount of sales dropping 30% to 40%. P.S. that’s a wild guess.
Market Commentary: Total 2020 sales volume in dollars was $1,161,696,436 and the number of sales was 814. Let’s put that in perspective. The last record high year was 2007 with dollar amount of sales being $756.6 million and the number of sales was 631. That makes the 2020 dollar volume up 54% and the number of sales up 29%. The last year we had more than 800 sales was 2005 with 882 sales. Not only was the sales volume record setting but the average sales price in San Miguel County was up 30% due to the buying frenzy. There was a total of 48 sales over $5M in 2020 compared to only 23 in 2019. Five sales were over $10M. The largest sale in the region was the Last Dollar Ranch at $17M; second highest sale was a home in Raspberry Patch at $12.75M and third highest was the Elks Building Penthouse in Telluride at $11.2M. For additional perspective, ten years ago in 2010 total annual sales for San Miguel County was $317.6M with the number of sales at 327. Inventory became so tight that the average discount off asking prices for a home in the town of Telluride was 5% and in the Mountain Village 6%. Several properties sold above asking price.
Market Segment Perspective: The average sales price went up in Telluride 37%, the Mountain Village up 27% and the rest of the county up 32%. The volume of sales growth in Telluride was up 97%, the Mountain Village up 77% and the rest of the county up 131%. The town of Telluride market accounted for $483M (42%) of the annual sales within the county, while the Mountain Village market brought in $423M (36%), and the remainder of the rest of the county tallied $256M (22%). The number of homes sold in Telluride in 2020 was 55 compared to 20 sales in 2019. The number of homes sold in the Mountain Village in 2020 was 52 compared to 26 sales in 2019. The average price per square foot (PSF) in the town of Telluride was $1,680 in 2020 compared to $1,237 PSF in 2019. For the Mountain Village those numbers were $771 PSF in 2020 and $748 PSF in 2019. In 2020, the number of condominiums sold in Telluride was 129 and compared to 94 in 2019. In the Mountain Village the number of condominiums sold in 2020 was 113 and in 2019 the number was 77. In our experience, buyers are motivated mostly by two things – location and price. While some buyers are able to purchase wherever they want, some buyers will be pushed out to the mesas and subdivisions near Telluride and the Mountain Village and some even farther out due to prices and more privacy.
Inventory Status: As of January 27, 2021 there are 99 properties under contract in our county, with a listing value of $182,080,289. Of course the actual sales prices of those properties might be slightly less. The most startling inventory stats as of 12/31/2020 are: Only nine condominiums for sale in the town of Telluride and only twelve homes. In the Mountain Village at the end of the year, there were thirty-one condominiums for sale and twenty-two homes. Some of those homes and condominiums are definitely included in the 99 properties under contract. For a detailed look at the inventory in twelve different categories click here.
Market Stats Potpourri: For Telluride and the Mountain Village home sales under $4M, 40% of the buyers financed their purchase with a loan. Buyers of homes over $4M got a loan as part of their purchase 33% of the time. In the Mountain Village, there were four homes that sold under $2M, and 24 homes sold between $2M and $4M, and 24 homes sold over $4M. In the town of Telluride, there were 19 homes sold under $2M, and 18 homes sold between $2M and $4M, and 20 homes sold over $4M. For a list of the Top Ten States and Top Ten Cities where buyers came from in 2020, click here.
Construction Permits: There were five homes with final approved home plans by the Mountain Village Design Review Board in 2020, seven homes are presently in the review process and an additional 31 homes and condominiums in DRB review process. In the town of Telluride, there are twelve new home construction projects and major home remodel projects combined in process, with over 180 smaller remodel projects in process with a total valuation of $35,639,271. The number of residential vacant lots for sale in the town of Telluride presently is nine, with 54 vacant lots for sale in the Mountain Village.
How did other Colorado resorts do in 2020:
- Land Title Aspen/Pitkin County reports sales of $4.174 billion which was 58% higher than their previous sales record of $2.635B in 2006. The most expensive home in Aspen to sell in 2020 was on Red Mountain at $31.85M. Pitkin County Assessor, Deb Bamesberger, says that the total value of all real estate in Pitkin County is approximately $38B. There were 90 real estate sales over $10M with one home sale over $6,000 PSF. For the first time in Aspen the average home sale in 2020 exceeded $10M. A top real estate broker in Aspen predicts that sales volume in 2021 will drop by 40% to 50% due to a lack of inventory.
- Per Land Title in Vail, the dollar amount of sales set a record at just over $3B. There were 73 home sales of $5M or more with the majority of buyers coming from Texas and Florida.
Other Markets of Note:
- Jackson Hole, Wyoming sales hit a new all-time record at $2.3 billion which was a 90% increase over 2019. The number of transactions increased 27% over 2019 with the average price of real estate increasing 50% in one year. Of note, only 3% of the land in Jackson Hole is privately owned which puts huge upward pressure on prices. Total inventory available including homes, condominiums and land is less than 140 listings.
- Lake Tahoe sales of homes in 2020 was a record at almost $2.6 billion with condominium sales at just past $1.3 billion.
- Lastly, you probably have heard how hot the market has been in Denver for the last ten years. The whole Front Range including Denver, Boulder and surrounding towns normally has a monthly inventory of about 14,000 units (condos and houses). This month that inventory level is about 2,500 units which is about a two month supply.
National Real Estate Market Perspective: We’re adding this section to our annual market report because of the extraordinary impact by Covid-19 on our national and regional real estate market trends. In an interview with Toll Brothers CEO, Doug Yearly, by Time Magazine, Mr. Yearly said that in the fourth quarter of 2020, Toll Brothers, one of the nation’s largest home builders, had 3,407 signed home contracts, the highest for any quarter in the company’s 53-year history; that was up 68% over the last quarter sales in 2019. He said buyers are customizing their homes with home offices and gyms, complete with rubberized floors, full-length mirrored walls and built-in ballet barres. Mr. Yearly said, “I think the concept of having some flexibility to work remotely will survive the pandemic.” This trend to move from high density urban areas has affected remote resort areas all over the country.
For this Annual Market Report, lets do the Top Twenty Fun Facts:
- For the year ending 7/1/2020, the U.S. population grew just 0.35%, the slowest rate since 1900. The primary reason is aging population and limited immigration.
- The population growth rate for the decade ending 2020 is the slowest growth rate since the first census was conducted in 1790.
- The GDP growth rate prediction for 2021 is 4% by most economists.
- The unemployment rate prediction for 2021 is 6.2% by most economists.
- It is estimated that 60+ million borrowers in the U.S. will miss $70 billion on their debt payments by the end of 2021 first quarter. Most of the debt is for mortgages, auto and credit cards.
- More than one-quarter of the total debt relief in the U.S. was provided by the private sector outside of the government mandates.
- The cost of building a home in the U.S. has been increased by the rising cost of land, construction material (lumber), rising water costs, and government permits and fees.
- In 2020, Colorado tourist spending statewide decreased 50.2% with U.S. travel economic losses surpassing $500 billion.
- The median cost to rent a one-bedroom unit in San Francisco in 2019 was $3,500 per month. In January 2021 that dropped to $2,660 per month. NYC and Boston has similar drops.
- New housing permits in the U.S. are running at 1.64 million/year, the best since September, 2006. The U.S. will still need about one million more new homes per year to meet demand.
- Total U.S. passenger vehicle sales in 2020 are expected to total 14.5 million units, down from 17 million units in 2019.
- In 2020, approximately 12,200 retail stores closed which emptied 159 million square feet of commercial/retail spaces. It’s unknown how much of that is permanent.
- Most economists predict the Federal Reserve will not increase rates in 2021.
- The median home price in the U.S. increased to $310,000 in 2020, 14.6% higher than in 2019.
- Florida, Texas and Nevada will be the biggest beneficiaries of new home buyers in 2021 with Colorado coming in fifth.
- New home starts will slow to 1.5 million in 2021, due to costs and loss of skill construction labor.
- Minnesota has the highest average credit score in the U.S. at 720. Colorado came in eleventh at 703 in 2020.
- Colorado Parks and Wildlife manages more than 400,000 deer, 300,000 elk, 82,000 pronghorn and about 3,000 moose.
- The world population in 2100 is estimated to be 10.9 billion with the greatest growth in sub-Saharan Africa.U.S. population will be only up about 5% with China’s decreasing by 50%.
- “Coming Soon” listings will be a relic of the last decade, with transparency, open markets and full disclosure being the new norm.
Real Estate Question of the Month: I have decided to list my vacant resident lot. Should I have it surveyed and what type of survey is best?
Answer: In our opinion, yes you should have your lot surveyed and ask for an Improvement Survey Plat. The surveyor will stake and flag the corners and also produce a paper survey that will show any structures like utility boxes, required building setbacks and encroachments if any. The benefit is that buyers are much more receptive to make an offer is they see where the corners of the lot are and see that any easements won’t seriously affect their ability to construct their dream home. The survey also allows title companies to deliver a cleaner/clearer title commitment to the buyer.
Our sincere thanks to the following sources we use all year long for providing us good, accurate information that we assemble and bring to your our readers: Land Title Guarantee Company in Telluride and all over the state of Colorado; Andrew Ernemann, Aspen/Snowmass Sotheby’s International Realty; David Viehman, Engel & Volkers Jackson Hole; The National Association of REALTORS; National Home Builders Association; Time Magazine; Colorado Association of REALTORS; Scott Benge, Telluride Consulting; my wife, Becky Harvey; our wonderful graphics assistant, Monica Panczer, and you our readers who send us good questions, suggestions and compliments. Thank you all!
Quoted in the Press in 2020: We are most grateful for having our market information quoted in 2020 in the Wall Street Journal, the Denver Post, the Colorado Sun newspaper, he Telluride Daily Planet, The Aspen Times newspaper and numerous other local newspapers all across Colorado. Thank you!
As always, thank you for taking some time monthly to read Tellugram. If you have any questions as a seller, buyer or just curious reader, we’ll do our best to give you a straight forward answer. We can be contacted at George@TheHarveyTeam.Net or on George’s cell phone number 970-729-0111.
"Art washes away from the soul the dust of everyday life" ~ Picasso
Best to you and your family,
George Harvey, Jr.
