While the entire U.S. has been in a phenomenal real estate boom that has caused many homebuyers stress with constantly rising prices, few markets have been as intense as Aspen real estate. Some changes to real estate in Aspen, Colorado, over the past few years even have local government intervening. If you’re also interested in what’s going on with Aspen real estate, here’s a brief run-down of the market as well as some signs pointing toward improvement.
Housing market summary
Overall, the housing market is intense. The average home price in April 2021 was $12.6 million. This average price has seen an astounding 15.7% increase in the first quarter of 2022 and is still on the rise.
The national records that have been set from 2019 until now are staggering. Yes, it makes sense that prices would rise each year because of inflation. However, the current rates are less typical. It’s no surprise that people have been hoping that the market will correct itself.
An attempt at balance
Since the real estate market has not been slowing down, the Federal Reserve has stepped in and raised mortgage loan interest rates. The hope is that raising loan rates will slow down buying, which will stave off constantly inflating prices. In January 2022, mortgage interest rates were sitting at about 3%, but the national average has gone up to about 5.25%.
Since this rate increase, the overall market has been leveling off a bit. There have been drops in home tours and in some areas, sellers are cutting prices. While the mortgage interest rate change may not be stopping the boom entirely, it’s clearly causing some level of decreased competition in the market.
The Aspen real estate market, however, has not followed the same trends.
The market in Aspen
For people looking for houses for sale in Aspen, Colorado, recent trends haven’t been as promising. The area has reached record pricing, it has better mortgage loan rates than other places in the country (in the 4% range), and the average home stays on the market for only a little over a month. When residential and all other types of real estate are included, Pitkin County property sales broke the $4.6 billion mark in 2021. Aspen real estate is very popular and desirable, and the mortgage interest rate changes haven’t done enough to dissuade people from looking for homes here. Buyers looking for luxury homes in Aspen may not be influenced by high interest rates.
What’s special about Aspen?
Photo courtesy of CN Traveler
Because so many other markets are dropping off, one can’t help but wonder about the unique appeal of Aspen real estate. A number of factors make Aspen appealing to a certain group of homebuyers.
As mentioned, a certain niche of homebuyers is looking for houses for sale in Aspen, Colorado. If homebuyers are seeking out the things that make Aspen so famous and unique — skiing, hiking, high-end restaurants, and more, — they will buy in Aspen regardless of the market. Those who are passionate about the ski resort culture in the area and visit multiple times a year want a home nearby. Another thing to consider is the fact that Aspen real estate is booming; there are many people who look at real estate here as an investment and want to turn homes in this area into vacation rental properties.
Another thing that makes Aspen unique is the fact that this area was a little behind on the real estate boom. Aspen homes were still sitting on the market for an average of 247 days in February 2021. As of February 2022, though, that number dropped drastically to only 37 days on the market, an unheard-of and historic number for luxury homes. Furthermore, there have been over 205 Aspen homes sold in the past 12 months, which is more homes sold in this area than in any previous period. It seems it’ll take longer for Aspen to come back from the extreme heights it soared to.
Why the market might get better
Because so much of Aspen’s boom has involved buyers looking for investment properties, the Aspen City Council has taken some matters into its own hands. On December 8, 2021, it adopted emergency legislation to ban residential development within city limits because it determined that the current market wasn’t delivering “meaningful housing for local residents.” This may discourage out-of-towners from buying land at high prices and building new homes to rent or flip.
There has also been some talk among local real estate agents that demand will move toward the outskirts of Aspen and away from the city center itself. Homebuyers are looking for more acreage, open space, and privacy, which might help improve the Aspen real estate market.
Why it might not
However, despite the locals’ work to improve Aspen’s housing problems, the market there may not correct anytime soon. After all, new resorts are still being built, and there is a quick turnaround for in-demand homes.
For example, it was reported in the Aspen Times that a Russian-born billionaire spent $76.25 million to build a new 81-room resort. This was a big enough deal that the city council had to vote to approve it, and the approval was won by only 26 votes from over 3,000 voters. Although the vote happened three years ago, having more bold and exciting attractions will only bring more people to the area.
Local realtors themselves have also noted the intense stakes of the recent boom. In October 2021, one Compass broker described listing a $12 million dollar home and receiving a competitive offer within 48 hours. While the mortgage interest rate changes are certainly slowing down housing markets, they might not be enough to make a big dent in this kind of speed and competition.
We’ll just have to wait to see whether local interests and Federal Reserve changes effectively slow the Aspen real estate boom or whether Aspen will continue to be one of the hottest markets in the entire country.
Do you want to buy or sell real estate in Aspen? If so, reach out to trusted local agent Ksenia Tyutrina for guidance.
