Skyrocketing Real Estate Prices Could Bring "Significant Cultural Change" To Aspen And Snowmass
Last year was unprecedented in a lot of ways. In Pitkin County, that meant record-breaking home prices and a huge volume of real estate sales that both have continued into this year. In April 2021 the average price for a single family home in downtown Aspen was $12.6 million. Jason Blevins, a journalist with the Colorado Sun, looked into the impact of the changing real estate market on mountain towns across the state. You can read his original reporting here, and read his conversation with Aspen Public Radio below.
Let's start by zooming in on Pitkin County specifically. You talked to a real estate broker and looked at real estate transfer data. What did that tell you about the housing market in Aspen and Snowmass?
Jason Blevins: It just went gangbusters. For years now – going on 30, 40 years – investment in Aspen and Snowmass has been a pretty safe investment. The values have increased at such a rate that it's a better investment than, say, the S&P 500 and most commodity markets. So people have long parked money in Aspen. And in 2020, they did that in spades.
People are buying up houses, most of them paying cash, paying record prices. It's continued in the first quarter of 2021 with astronomical price increases.
One of the most interesting numbers I saw was that three-bedroom condos – 30 of them sold in April in Aspen and the downtown core. They sold for an average of $2,500 a square foot. That's how much it costs to build a skyscraper in downtown Manhattan. It's kind of nuts.
Are there other comparable communities elsewhere in the state where we're seeing the same kinds of changes and the same scale of real estate boom?
Yes, just about all of them. Eagle County for example, driven largely by Vail, was up 153% in 2020 over 2019. There were 83 sales over $5 million. The same could be said in Pitkin County, where there were 224 sales over $5 million compared to 92 in 2019. That’s more than doubling the number of super high-dollar homes, more than doubling the total sales volume. And the values of these homes went up 20%, 30%, or even more in 2020.
What is this doing to people who are not on the high end? What is this doing to affordability and workforce housing?
Yeah, that's where this is truly problematic. In the story that I wrote, I noted that a significant cultural change is underway in these resort communities. We are pricing out even attainable housing. It's not just the service workers and the teachers. It’s doctors and lawyers in Aspen and Vail. It's become completely unaffordable to live in these communities.
So what does that mean as we go down the road? When folks move to places like Aspen – what do they move to these towns for? They love a cool restaurant, a great ski area and great galleries and shops – all the cultural amenities that are part of these really high dollar resort communities. What happens to those amenities when there's no one left to run them?
That's a question that Telluride and Crested Butte and Vail and Aspen are really going to have to grapple with. Last year, we sent hundreds of locals packing because the homes they used to rent sold, and there's no place for them to live.
Are we going to see real estate prices this high for a long time? What will this mean for the future?
We heard this same soundtrack and we watched the same movie in 2007 when all the brokers were saying, “Oh, it's not a bubble. This is great.” And of course we all remembered what happened in 2008, 2009, 2010 when the world fell apart.
So we're going to see a market correction – everyone says that. But will it collapse like 2008? Not likely. These values are going to stick around. They might not grow as fast as they did last year, but they are not going anywhere. I talked to a lot of brokers and they say we've set the new bottom.
So what does that mean? I don't have a crystal ball, but we can probably learn from looking back at the recession. Times are going to be rough for housing. If your community housing authority is not on the ball with new units coming online every year, you're almost too late to the game.