Three Aspen Snowmass Real Estate Graphs Worth Understanding…
There always seems to be interest in the Aspen area real estate market, not just from current and future owners, the national (and sometimes international) media is constantly on the hunt for sensational real estate news, and the properties & people in Aspen tend to provide regular opportunities for consumable content.
The problem with media coverage of Aspen Snowmass real estate is the headlines and articles tend to have a narrow focus and therefore miss the details that actually matter…the “meat” of the story below the surface-level anecdotes and trends.
I’ve been thinking quite a bit about the future of the Aspen Snowmass real estate market, and what the recent/current sales, listings and contracts might tell us that isn’t so obvious to the casual observer. The following three graphs are each interesting on their own, and collectively they tell an interesting story.
First, listing inventory…the number of available Aspen residential listings has almost doubled over a two-year span from a low of 110 to a level hovering above 200 (and growing). It’s easy for potential buyers to look at this trend and quickly decide sellers are no longer in control of the market, and that “low” offers should be made to capitalize on the “glut” of inventory. HOLD ON, let’s take a historical look at Aspen residential listing inventory:
Looking back nearly 15 years provides some excellent context; clearly the recent trend has been rising available listings in Aspen, but 200+/- available listings is absolutely meager compared to 500+/- during the Great Recession and well below the 300-400+/- range established during the “good” market years prior to COVID changing the market dramatically.
When listing inventory rises (i.e. more supply) there often tends to be a correlation with softening prices. There are a multitude of ways to evaluate local real estate prices and each has their own merits (and limitations), and generally speaking I feel the average price per square foot for Aspen condo-townhome sales is a good proxy for the overall Aspen real estate market.
Why? Partly because the quantity of condo-townhome sales often provides a more reliable data source than single family homes, and partly because there are very limited “new” condo-townhomes available at any given time in Aspen so the price appreciation trends tend to be more organic than an area like Snowmass Village which has been saturated with new condo development properties.
Let’s take a look at the historical trends for Aspen Snowmass condo-townhome prices:
Interestingly there was a modest dip in Aspen prices last year (2023) compared to the year prior, while Snowmass Village price increases didn’t skip a beat thanks to the Base Village new construction properties that continue to set records with each new building that sells out. Despite the downward shift in Aspen last year the closings through the end of June of this year indicate that prices have resumed their upward trajectory.
It’s also worth noting the gap between Aspen and Snowmass Village pricing has been widening, and this is in the face of impressive price appreciation in Snowmass Village (again largely thanks to new construction sales). Aspen prices have exceeded $3,000 per square foot on average for the first time in history this year - and this comes only three years after breaking the $2,000 per square foot average, and five years after topping $1,500 per square foot on average (meaning the average sale price per square foot has doubled over the past five years).
There’s one additional trend that I think is critical to track in combination with the current listing inventory levels and historical price per square foot trends…the average discount buyers are achieving at the closing table. The corollary is the average sale price relative to the list price, and in my opinion is a better illustration of this trend:
This is one of those “wow” graphs that has just so much to learn from…for instance, take a look at the pre-Great Recession averages - pretty similar to the past few years! And, how about the gap between the two trend lines during the heart of the Great Recession? For sure sellers were giving much higher discounts (on average) of the asking price (10%+) but even more striking concessions from the original list price (20-25%+).
Over the past 10 years the gap between the two lines on the graph has been fairly tight - meaning that sellers have been making modest price adjustments to the original list price and modest price concessions at the closing table (remember, this is all based on the averages of all sales in a given year…the range of discounts provided on list price and sale price are much higher).
Most recently it looks as though the prior 10+ year trend of increasing seller negotiating power is starting to swing back towards buyer favor. I’m particularly interested to see that sales are closing nearly 10% below the original list price (on average) but only 5% below the asking price at the time of going to contract…that increasing gap indicates sellers are making two adjustments that are modestly larger than the past few years…a first adjustment to the original list price (i.e. sellers on average determining their original list price was too high) and a second adjustment on the average concession they provide when going to contract.
Keep in mind a 5%+/- average asking-price to sale-price discount is nominally pretty small, buyers are not yet finding significant discounting opportunity on the whole. And when considering all three graphs together it’s clear that historically modest number of available listings is allowing for continued sale price increases…but those increases are beginning to cause new sellers some challenges about finding the sweet spot for list price (and an appropriate sale price).
What a fun time to be in the business of creating value for buyers and sellers utilizing market knowledge and real estate business expertise!