HIGH SALE PRICES
During an Aspen Business Luncheon in early September, Andrew Ernemann and Lex Tarumianz through some staggering statistics, reflecting Aspen’s increasing market revival. In the entire Aspen and Snowmass surrounding area, the average sale prices are 92% of list prices. Compared to previous years, this number is up from 2009-2010 (at 87%), but down from 2007’s rate of 96%.
In Aspen, home sales have soared and are up 14%, and add to Aspen’s overall YTD sales which are up 5%. Although condo sales are only up 2%, Condo and Townhome prices are up 20% this year (vary on location).
Single Family prices are also up 5-6%, but can increase even more based on the neighborhood, as with any property listing price. Currently in Aspen, the square foot price of said Single Family homes is $1,082. On average, the list price is $1,366/sq. ft, and sellers are asking for roughly 21% more than sales price.
LOW VACANCY RATES
In the downtown core area of Aspen, there is an extremely low 1% vacancy rate. Lease rates, in return, are seeing a come back for Class A properties, listed at $175-225/sq. ft. An influx of luxury retailers have been drawn to Aspen due to the realty that 1500 sq. ft. retails spaces need to “be at $2 million to be profitable”, which deters small local retailers.
The office market is also improving with B and C grade spaces, and Class A office leasing is on fire. Smaller office area is in high demand, and has led to eager businessmen and women moving in quickly to obtain Class A office space.
ANTICIPATED STABILIZED LEASE RATES FOR 2015
In 2014, cap rates have lessened to 3-4%, compared to 4.5-5.5% in 2012. During the luncheon, Tarumianz expressed his anticipation for more stabilized lease rates in 2015. Until then, the model is to “buy at 3% return and wait, improve the leasing, or redevelop”.
SNOWMASS MARKET IMPROVAL IN 2015, 2016
Although Snowmass has been lagging behind Aspen in terms of market growth, Snowmass homes are 40% higher than sales. In turn, overall sales are down 15%. This year, only one sale above $5 million has seen Snowmass. The market is anticipated to improve, but that won’t be for at least a year or two. Next year, Snowmass Village condos are expected to soar, and will bring more hope to the neighboring ski town.
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