Not unlike the rest of the nation’s real estate market, some pain is being felt by sellers in the Telluride region. Many however are becoming more realistic with asking prices. The most difficult segments of course are bank-owned or about to be bank-owned properties that are being sold at very deep discounts. These deep discounts have created havoc for the appraisers in the region, and not helped new buyers that require financing on more conventional transactions. For cash or high equity buyers however there has rarely been a better time than this to, with patience and persistence, find exceptional value. We anticipate for 2011 that absorption of the better priced and positioned (remember location, location, location) properties to pick up some steam when buyers see the better properties disappearing and realize these opportunities will not last forever. Call Telluride Real Estate Brokers now at 970-728-6667 if you are a buyer or a seller, and we will give you a personal update of market conditions for your property type.

Telluride Real Estate Brokers is printing its 2011 Telluride Community Calendar. This is the 6th year that this historic community calendar has been published. The calendar hosts historic photos and ephemerae and a thoroughly researched calendar of events for those people who would like to know what is going on in Telluride. Telluride Real Estate Brokers sends these calendars free of charge to most Telluride region out of town property owners. Locals can pick one up at the Telluride post office during the holiday season. Calendars can also be picked up at the Telluride Real Estate Brokers main street office at 126 W. Colorado Avenue or in the lobby of the Hotel Columbia year round. If you have not received a Telluride Community Calendar and would like to receive one, click here to send us your contact information and we will send you a calendar.

Update on the Real Estate Market in Telluride

Nothing like a late August dusting of snow on the peaks around Telluride to make us aware of the upcoming winter, ski and tourist season. We locals still hope for a beautiful Indian Summer in September and October with outstanding fall colors before the onslaught of another busy winter season.

Speaking of Indian Summers the real estate market in Telluride is in a similar phase and is currently an investor’s delight.  Many sellers have gone through serious storms and have become more realistic about asking prices and many savvy investors have already taken advantage and picked up great bargains over the last few months. Many clients and other real estate broker friends have asked me, “Has the Telluride real estate market reached bottom? Have prices stabilized? When will the market rebound?“ All very valid questions and for most of us the crystal ball is still pretty foggy. However, this is a perfect time to analyze where Telluride is and how the future looks.

This type of analysis always brings me to look at two major influencing factors: first, location (remember real estate is all about location, location, location) and second, demographics. It cannot be denied that the current economic condition has had significant impact on the Telluride real estate market; it is not being called the “Great Recession” for nothing. The equity markets will probably continue to be volatile, testing lows and not improving until after the November election removes political uncertainty. Historically, the months following a mid-term election, no matter who wins, are positive for the equities market.

Before I get back to real estate in Telluride, I want to address current attitudes that affect the broader real estate market: the popular press is painting real estate, including primary residences, as the worst investment vehicle that will never regain its former importance economically as the mainstay of a family’s investment portfolio. I dismiss this popular wisdom as hog wash. Surprise, homes are still the single most important family investment. A home is a family’s identity. This is where the kids grow up and come home to. It is most families’ pride and joy and will always be a primary investment, not to be confused with other investments like stocks, bonds, CDs, etc. that are not as easily enjoyed.

Back to demographics: the United States currently has 300 million residents and in the next 30 to 40 years this number is expected to grow by another 100 million (33%). According to the experts, most of this population growth is going to take place in the Sunbelt, from Los Angeles to Miami including Las Vegas, Phoenix, Salt Lake City, Albuquerque, Denver and the Colorado Front Range, Dallas - Fort Worth, Houston and Atlanta. This brings me to location. This population growth particularly in the Phoenix, Albuquerque, Denver - Colorado Front Range, Dallas-Fort Worth and Houston area, is very well suited for Telluride as both a summer and winter resort community. Many of these people will be seeking mountain get-always to enjoy the skiing or escaping the summer heat. With improving air service into the Telluride region through both Telluride and Montrose airports, I see stable growth ahead for our tourist industry.

But, how soon will real estate recover? Americans by nature are an optimistic lot and will, as history has proven, only sit down and be set back by economic bad times for so long. In the ultimate battle of market forces between fear and greed (remember “There is nothing to fear but fear itself” -F.D.R), fear will run its course and be replaced by optimism and growth. The longer the economic uncertainty lasts, the steeper the ultimate recovery will be with population growth, lack of current building construction and need for replacement all being contributing factors. Those who position themselves well will profit when the economy picks up steam. How about timing? It is impossible to pick the absolute bottom, as it is impossible to pick the timing when the bottom ends and price escalation starts to occur. However, I believe it is reasonable to say the current real estate market condition is bouncing along the bottom and absorption at this level is occurring. When will all supply at this price level be absorbed, and how much will become available at this price level is uncertain. But, the Telluride real estate market is so small that it is only a matter of time; 6 months, 1 year, maybe two ski seasons, it is difficult to predict. As the end of the real estate market bottom approaches, the supply and quality of real estate at this historically low price level will start to disappear. Once the market starts to move there will be the usual array of investors that will say, “I should have, or I could have”. Therefore, with pricing as low as it is and probably not going lower, it is time to get off the fence.

Please give us a call and we will try to match you with the best value for your needs. 970-728-6667

Dirk de Pagter
Managing Broker
Telluride Real Estate Brokers, Inc

    Telluride, first and foremost, is a ski town with great summer activities. Because of the nationwide financial crunch, we are forced to examine the underlying basics of our local economy, cultures, lifestyles and priorities. When I get enough of the local and national media financial reporting frenzy, I go back to look at the basics.
    Telluride is a wonderful tourist destination in both summer and winter and despite the economic turmoil we are holding our own. Our lifestyle and culture are extraordinary. It may possibly be adjusted but not likely to change. Our priority still is to enjoy, contribute and support our community. Telluride’s motto used to be “the most beautiful place you will ever ski” but its recent trends demonstrate “Telluride is the most beautiful place you will ever live”. With telecommunication a reality, many people have chosen to move to places a little more rugged and beautiful with a strong sense of community to enjoy the outdoors and raise a family. I do not see these basics changing. The markets will swing, the banking crisis will pass and the liquidity will return; it is a business cycle. Now how is this affecting real estate in Telluride? What is my home, condominium, land or ranch worth in these uncertain times? If I had to sell, how deep do I need to discount or if I want to buy, what bargains are out there? Telluride’s real estate market is small and a handful of sales in any market segment will be a perceived boom. Undeveloped or unbuilt lots or land are probably the least affected, but with proper research there is value to be found. Improved property, homes and condominiums, are a different story. Having been part of the building industry, I look at these conditions more in depth, analyzing the premiums paid or discount taken off the replacement value of improved property. For example, how much is the land value and how much will it cost to build this home. The discounts compared to replacement value have never been deeper. The last time I observed these types of deep discounts was in the inflation era of 1979-1983. There are a few contributing factors of course, in recent years construction costs have seen a significant increase. This is not only due to wage and price increases, but also level of detail and use of materials that are of significant higher quality, cost than ever before. These construction costs will be adjusted down in the future, but not to previously low levels. My advice for buyers is: Analyze what you can afford, do your research, connect with a competent broker who has extensive market knowledge and with superior local connections who knows who is truly motivated to sell and who is not. The reason for a buyer to act now is no building permits are being issued; the inventory will not increase. The largest selection is now available and the best bargains will go first. Lock in with the current low interest rates; when inflation surfaces rates will go up. My advice to sellers is if you do not have to sell, take your property off the market. Current buyers are sophisticated and will not be paying premiums for dreams or emotion; it is a buyer’s market. Be realistic in your expectation of value in today’s market conditions; an offer from two years ago or what the neighbors sold for is no longer relevant. If you can afford it, offer seller financing. This will most likely get you a better price. Also, talk to your listing broker and ask the hard questions: If this property has to be sold in 30 days, what would the price have to be?
    The market pendulum has swung too far in the opposite direction and as with any cycle, it will start moving to equilibrium. But after all, the mountain will be here, the tranquility will continue to sooth us no matter how much chaos is occurring beyond our mountains.
For more Telluride real estate news, to search the Telluride MLS, or view our live Main Street webcam, please visit us at http://www.telluridemls.com.

    As some of us are boldly spending some of our discretionary funds, snapping up consumer bargains on anything from automobiles to socks and underwear, this deflationary cycle will probably soon come to an end. It has been swift and ruthless and hitting this bottom has been painful for would-be sellers of real estate in Telluride. This swift downward market correction caught many sellers and real estate brokers by surprise, and with sellers not adjusting prices very quickly, the number of transactions was sliced in half. Most sellers in the Telluride market are strong enough to wait out the cycle and will hold firmer on their pricing, but some sellers have had enough and will discount significantly to move on with life and may comeback into the market another day.
For real estate brokers representing buyers and sellers it has been an interesting dance to see how much courage buyers have and how much pain sellers are willing to take. There are savvy buyers who are buying now when everyone is trying to sell; they will be picking the low hanging fruit in this deflationary cycle, snapping up some bargains for themselves and their families to enjoy. These sporadic fire sale priced properties will not last long and deals not made by the end of the ski season usually have sellers resigning themselves to the fact that a sale will not occur until next summer season, holding firm on their pricing in anticipation for a better summer sales season. Recent broader economic numbers show very slight inflation, inflation with our government printing money to pay for our past sins can be a problem and as the business cycle swings the other way it would be wise for investors to brace themselves for future inflation. Real estate has historically been a good inflation fighting asset; and resort real estate, unlike gold, has an added enjoyment component. The conclusion of all this is it maybe wise to pick up a price deflated property today and have an enjoyable inflation fighting asset in the future. As the old saying goes: buy when others sell and sell when others want to buy.