ASPEN — Deep discounts in Aspen's luxury home prices have lured the wealthiest buyers off the sidelines in recent weeks and fueled hope among real estate agents that the market has turned a corner after a rough couple of years.
There have been five home sales between $13.74 million and $20 million in the Aspen area since Dec. 30, according to deeds recorded with the Pitkin County Clerk & Recorder's Office. At least two other properties are under contract to sell in that range later this month, according to real estate agents.
The luxury market is driving the recovery right now, said Chuck Frias, a partner in Frias Properties. “There certainly are more large deals closing than smaller ones,” he said.
There were two sales at prices greater than $15 million in all of 2010, Frias noted. There have already been two sales at that level and two other properties are under contract just two months into 2011.
“The wealthiest clients are less averse to the economic downturn,” Frias said. “Even though they may have lost asset value and have reduced earnings, they still have plenty left to spend.”
Craig Morris, a partner in Morris and Fyrwald Real Estate, said many sellers have “come to grips” with the realities of the new real estate market. They are pricing property at what is required to sell today rather than holding onto past values from the last boom. That helps spur sales.
High-end buyers are recognizing that prices might be the lowest they will see in this cycle, so they are seizing opportunities, he said. “There's been a lot of money on the sideline,” Morris said.
Most people aren't in a position to consider a $16 million purchase a bargain, but that's what happened last week. Morris represented the buyer of a $16 million home at 875 Star Mesa Road, off McLain Flats Road, in a cash deal that was recorded Feb. 15. His firm also had the listing. The home was originally listed for $32 million and was most recently listed for $21 million. The sale price was 24 percent less than the asking price.
The buyer was Aspen Kiwi Properties of Aukland, New Zealand. The seller is MFPI Partners LLC.
The Star Mesa transaction is a perfect example of how homes must be “priced competitively” for any chance to sell, Morris said. Discounts of 24 percent and greater aren't uncommon.
The other big sales in recent weeks are:
• A home sold on the Ridge of Red Mountain for $13.74 million on Dec. 30.
• A second home on Red Mountain sold for $14 million on Dec. 30.
• A home in Wildcat sold for $17.75 million on Jan. 31.
• A home in East Aspen sold for $20 million on Feb. 10.
Morris said one of his listings in the five-lot Pyramid Point subdivision near the Maroon Creek Club went under contract recently for $17.5 million and was scheduled to close Feb 17. A prospective buyer was preparing a back-up contract when they learned about a vacant lot next door and signed a contract to buy a house that will be constructed, Morris said. That deal is also for $17.5 million, he said.
Brian Hazen, vice president at Mason Morse Real Estate, said the flurry of activity in the high-end market is particularly encouraging and symbolic.
“The real key is [the high-end buyers] still find Aspen attractive,” Hazen said.
The ski season has been busy with a lot of showings of luxury homes, he said. He expects that to continue through the unusually long ski season, then expects it will pick up again during the summer.
“I've been saying all along this is going to be a better year,” Hazen said.
Aspen continued to attract buyers with discretionary incomes after the Great Recession struck. Some of the current buyers had contracts to buy property last summer but got cold feet because they felt prices might slide further, according to Hazen. Other prospective buyers just watched.
“People have been hesitant to pull the trigger. Now that's changing,” he said.
Nevertheless, the recent run on luxury homes isn't close to exhausting the supply. There are 49 homes listed at $10 million and more in the Aspen zone. “It's still pretty substantial,” Morris said. But if activity continues as it has during the first quarter of 2011, it could soon make a substantial dent in that inventory, he added.
Hazen said it remains a buyers' market despite the flurry of activity. The high level of inventory above $10 million will continue to dictate competitive pricing, he said.
Provided by the Summit Daily
By Scott Condon