Over the past several months, the real estate market has been in flux as the desires of buyers shift. A confluence of conditions created a market where remote, suburban, and rural properties won favor over those in the city.
Rising prices offered little resistance to historically low-interest rates: financing has been easy to secure, so motivated buyers were undeterred in their quest for a new property. Sales records were set across the country. In Pitkin County alone, real estate sales topped $3 billion for the first time, closing the year with more than $3.1 billion in sales. Much of that was in Aspen, where the average sales price for a single-family home was $11 million.
Remote luxury homes are an attractive investment for buyers—especially those deep-pocketed shoppers seeking high-end accommodations—and the market remains highly favorable for those willing to list a house. Below, we explore why the timing is good for listing your Aspen home for sale.
A prime opportunity to sell high
Selling a primary residence is never an easy task. Even when you have plenty of cash, choosing to move on to the next chapter of life is necessarily uncertain and presents plenty of emotional and financial challenges. Factor in the grandeur and comfort offered in Aspen's corner of Colorado, and it's a particularly nerve-wracking time to say goodbye.
Emotional factors aside, you can rest assured that if you choose to sell now, you’ll be taking advantage of an all-time high in terms of price.
A hot seller's market—where demand is up and inventory is down—must give way to a cooling-off period. During this slowdown market, buyers suddenly have a deeper inventory to choose from and can play "Let's Make a Deal" with desperate sellers.
Right now, however, Aspen’s market has unprecedented strength. Since summer of 2020, the demand from buyers has far outpaced the supply of homes, and the conditions that have allowed this particular market cycle to blossom have never been seen before. Demand is extremely high, and with it, so are home prices.
And though the current conditions should last until the end of the year, they won't last forever. Now is a prime opportunity to sell high, and it may be the last opportunity for years to come. As buyers and investors settle into the purchases and investments they've closed over the past 18 months, you can expect demand to decline.
If you had plans to sell three to five years down the road, it might be worth accelerating your timeframe. Even if selling hasn't been on your radar, it’s still worth exploring your opportunities.
Rare opportunities on both sides of your real estate transaction
Selling in a hot market allows you to take advantage of many of the same conditions fueling the recent frenzy of transactions.
For starters, you can use the cash earned from the sale of your home to upgrade your living situation. The equity you've generated (coupled with skyrocketing prices) means you'll walk away from the deal with a considerably higher return than if you sold in a less intense seller’s market. You can then turn that profit around and make a purchase using the same low interest rates currently driving the market.
If you want to remain in Aspen, this might be the rare opportunity to upgrade homes or neighborhoods in a city you already know and love. Take the opportunity to explore other areas in the Roaring Fork Valley—or maybe your future home isn't in Colorado at all. Use the proceeds from your sale to chart an entirely new path that doesn't involve a permanent residence or mortgage. Whatever your aspiration, it will likely be years before another seller’s opportunity like this one develops.
Historic interest rates won’t stay low forever
Much of the reason homes are in such high demand (even with higher prices) is that mortgages are cheaper than they've ever been. For the past 12 months, rates have hovered between 2.5% and 3.0%. Those are unheard of numbers—considering the annual average for the five years prior to 2020 was 4%. However, these historic rates are likely to shift. Norway recently saw the beginning of monetary tightening in Europe, the first in any advanced economy since the pandemic began. Four emerging economy central banks — Pakistan, Hungary, Paraguay and Brazil — also raised the cost of borrowing this week, while the US Federal Reserve and Bank of England both signaled a move towards tightening monetary policy.
You can take advantage of these rates when investing in your next property. But time is of the essence. Experts predict rates won't remain this low much longer, and over the past few months, the numbers have shown a propensity to inch upward.
Additionally, you may want to move quickly in light of the potential increases in the capital gains rates. Many people are selling their properties and reinvesting into safe havens like Aspen. Since there were no changes in the 1031 exchange legislation, they can keep offsetting their capital gains profits by purchasing another property.
Ksenia's passion is in doing in-depth market research and analysis so you don't have to and seeking out off market opportunities and investment deals before anyone else finds out about them
That said, there's still time to take advantage of the rates on both sides of your transaction if you act now.
Your next move isn't as complicated as you think
All Images: Listing courtesy of Maureen Stapleton Coldwell Banker
If you’re asking yourself, "Why would I want to sell now, only to house-hunt during the least advantageous time possible as a buyer?"—your concerns are well-founded. However, selling now allows you flexibility and enormous cash flow while contemplating your next move.
Just because you sell now doesn't mean you have to turn around and make an immediate purchase. Below are four options that go beyond a simple sell-and-buy scenario.
Custom home plan
Instead of selling and buying immediately, consider selling and building. If you've always dreamed of crafting your dream home from the ground up, the proceeds from a lucrative sale are the ideal way to jumpstart the project. Rent for one to two years while the house is under construction, and then move into a property designed and built exclusively for you.
Not in the market to build, but seeking a well-placed home to renovate? Plenty of those exist on the market, too. Fixer-uppers in secluded communities are often overlooked in a market where low interest rates motivate buyers to aim high—so your options to acquire an under-the-radar property with plenty of money left over have never been better.
Rent now, buy later
Cashing out on a big-time sale might prove the perfect time to take a vacation from homeownership. Invest your sale earnings elsewhere, and wait for the market to come back down to earth. When it does, you'll be primed to take your pick from an increasing inventory of homes, many of which will come at a discount.
Seek out an off-market deal
If you're set on owning another home but want to hold out for something exceptional, look for off-market deals. Known as pocket listings, these are exclusive properties that an agent or broker doesn't openly advertise, often at the seller's request.
In most cases, these private listings wait for the perfect buyer to come along, which ultimately compels a seller to finally let go of the deal. Certain off-market transactions may yield considerable savings for the buyer.
Work with an experienced real estate broker
All Images: Listing courtesy of Maureen Stapleton Coldwell Banker
Selling luxury homes is about more than the right sales price. It takes hard work and diligence to position your Aspen property to attract the right buyers: ones who are motivated, with money to spend, and an appetite for some of the country's most spectacular real estate.
As you focus on your future, you'll want a real estate broker who can anticipate and manage the intricacies of your sale. One to perform the heavy lifting of talking to other agents, clients, and lawyers, so you don't have to. Your broker's market knowledge and expertise are intended to place your home in the best possible position to sell, and their negotiating skills maximize a property's value by generating the absolute best offers.
The best agents in Aspen are those that market each home as if it were their own. They understand that selling a home is more than a transaction — it's about securing your future.
If you’re ready to explore selling (or buying) a home in Aspen, contact Ksenia Tyutrina today. Ksenia has years of specialization in the Aspen/Snowmass luxury real estate market and has earned the trust of her customers and colleagues alike.
*Header Image : Listing courtesy of Maureen Stapleton Coldwell Banker