We have seen a real estate market like never before these past few years. It is creating buzz and concern about entering a real estate bubble. For many of us, the memories of 2008 are still fresh. Aside from the fact that the past few years are nothing like what we have seen before in many ways, signs are not pointing to a real estate bubble or a proceeding real estate crash. Aspen’s real estate market doesn’t always follow the same trends as the rest of the nation, though. It has a unique environment and a unique economy.
So, what does 2022’s real estate market hold for Aspen? Let’s dive into the past few years and the conditions shaping the future of Aspen’s real estate market.
It’s not a bubble
In the fall of 2021, though, Aspen real estate had a record number of high-end sales. Just in the four months from September to December, 13 properties sold for over $20 million. In the entire year of 2019, only six homes sold for over $20 million, and in 2018 there were only two. In 2020, there were 24. The increase reflects the impact of the pandemic and the transition to working from home. High net worth families were able to make Aspen their permanent residence. All of this is to say: Aspen is not in a real estate bubble heading for a crash.
The low availability of real estate to buy in Aspen is one of the reasons real estate values have always grown, or at least held steady. When demand is high and inventory limited, it creates a competitive real estate market. So competitive that millionaires are trying to buy property only to find they are competing with billionaires who can easily outbid them. The price per square foot of houses for sale in Aspen, Colorado is rising at a steady rate.
Since then, there have been several off-market properties in the same area listed in the $100 million range. Savvy real estate investors are flipping properties for a high return on their investment. Realtor Ksenia Tyutrina saw one investor flip a property for a 100% return in a matter of months.
Aspen is not your typical real estate market
There is no other city that provides low taxes and a peaceful, stress-free living environment, surrounded by happy residents and gorgeous mountains. Aspen is not a typical real estate market. People will always want to live here, and for those who can, price is not an issue.
The effect of the commercial market
Mark Hunt, one of the area’s top developers, partnered with Restoration Hardware to invest close to $300 million into redeveloping the commercial core in Aspen. They plan to build an RH store, restaurant, boutique hotel, and a bathhouse. They are transforming the old and dilapidated buildings into high-end shopping centers, fine dining, and hotels.
As a result, commercial leases are rising and hitting record levels. Even so, there were several new stores and restaurants that opened this season. There will not be any pop-ups because the owners are seeking lucrative five-year leases, which will provide the area with stability. Downtown’s facelift will attract even more sophisticated buyers to Aspen real estate.
What will have an impact on homebuyers is the environment, if their children can walk to school safely, and if they will gain the best education. They are looking for a lifestyle, one where they can enjoy classical music concerts from the front lawn of their mountain home.