Home Construction or Modification

To Build or Not to Build? A Telluride Real Estate Market Construction Update

Many of my clients have inquired with me recently about the options of purchasing an existing home or buying a lot and building a home to their specification. It’s a very interesting question in today’s Telluride real estate market. Please allow me to be clear that I’m talking about residential construction here, not commercial or condominium development. It also needs to be understood that I am talking in generalities and that each project will have unique factors and costs unique to its own.

The equation to understand construction cost is land + hard costs + soft costs = project total cost

The important factors to understand when evaluating new home construction in the Telluride market:

Availability of Labor, Services and Materials:

There are incredible home builders in the Telluride market. However, basic supply and demand is dictating an increase in construction costs due to the supply of qualified contractors. Workers are being drawn to Denver and other areas of the Western Slope where conditions and pay may be favorable. There is also a shortage of young people entering the trades.

Almost all the materials used for building homes in Telluride are now imported; lumber and steel from Canada are an example where proposed tariffs may increase the costs further.

Hard Costs

Hard Costs are the actual construction costs and can vary dramatically upon the size of the home and what quality of finishes, lighting and appliances are desired by the owner. These costs also depend on which municipality you choose to build in. In the Town of Telluride there may be workforce mitigation fees and historical preservation impacts. The Town of Mountain Village has very specific architectural guidelines such as a 35% stone requirement which ultimately preserves the overall consistency and property values of the community.

A general range of hard costs is between $450 to $600 sq/ft

If you are looking to build a mountain modern, contemporary home, Mountain Village, or Aldasoro Ranch may be the best options as their design guidelines are now more geared to this style of home.  

Soft Costs

Soft costs are fees for architectural design, engineering, and municipal development fees such as building permits, construction mitigation, water and sewer tap fees.

One important tip is to identify your builder early in the process and connect them with your architect to avoid over-designing outside your budget. Some builders and architects already have a great track record and comfort with each other to achieve this.

A general range of softs costs is 10% of the project total for architecture and engineering and 15% to 20% of the project cost for development fees.

Purchasing a Lot

There are currently 86 lots for sale in Mountain Village at an average size of .67 acres at an average price of $1 Million. One item to note is that I have seen recent engineering and architectural designs that work well with steep lots that can provide excellent land value and amazing views.

In the Town of Telluride, there are only 17 lots available for sale at an average size of .84 acres and an average price of $1.6 Million. Price is at a premium as the Town of Telluride is rapidly approaching build out.

Other options for vacant land two surrounding sub-divisions that provide amazing access, privacy and value. In Aldasoro Ranch, there are 16 lots available for sale at an average size of 3.3 acres and average price of $787K.

The Ski Ranches there are 6 lots for sale at an average size of 1.7 acres and an average price of $488K

New Construction vs Purchasing an Existing Home – The Bottom Line

A general range for total new construction costs are $700 to $850 sq/ft plus the cost of the land. In today’s market the cost of new construction may be similar to the cost of purchasing an existing home.

The question to ask is if the owner is willing to invest time in the process and then be OK with an up to 18-month construction timeline once municipal approvals are granted. The benefits of new construction are to design and enjoy a home of your dreams and there may greater appreciation potential for newer homes.

Please contact me for more information on vacant land and home construction.

 

The Telluride and Mountain Village Architectural Design Process

Architectural design standards in our destination vary greatly, from the objective of historic preservation in Telluride as a National Historic Landmark to the recently updated guidelines in Mountain Village to allow for more contemporary homes. The standards are in place to keep the character and look of each jurisdiction in line with its master development plan. The Architectural design guidelines also are good for overall property values. If you are thinking about building a house or modifying a property, here is what you need to know:

How it works in the Town of Telluride:

  • The Planning and Zoning Commission or P&Z has the authority to grant approvals concerning uses permitted on review, zoning variances, conceptual, preliminary and final planned unit developments, preliminary and final subdivisions. It is directed to initiate amendments to the Land Use Code for Town Council review. It is also directed to make, adopt, and recommend Master Plans to the Town Council.
  • The Historic Architectural Review Commission or HARC is directed to issue Certificates of Appropriateness prior to the issuance of permits pertaining to the erection, demolition, moving, renovation, restoration, addition to, or alteration of any structure or sign. It also recommends designation of structures, significant landmark interiors and areas of outstanding historic and architectural significance; proposes preservation standard and policies, and maintains inventories of historically and/or architecturally significant structures and areas.
  • HARC gives out annual awards, the “Preservation Award” for projects that keep have outstanding commitment to preservations and compatible building techniques.
  • Both Commissions have 7 members that are appointed by Town Council and they meet at least monthly.
  • If building or modifying a property in the Town of Telluride, be prepared to for these strict guidelines. A local architect with intimate knowledge.
  • There are currently 26 lots listed for sale in Telluride

How it works in the Town of Mountain Village:

  • Two-step process: the first step involves getting sketch approval, the second step is to get final approval, both steps are required to be publicly noticed. This process takes 10 weeks.
  • Mountain Village recently revised their guidelines to include more modern design, here are the changes:
    •  The Code was bolstered to emphasize the Board’s principal duty of ensuring the implementation of the Town Design Theme and applicants must be responsive to the Board’s direction.
    • Substituted references to “solid, heavy” and “thick” bases as a design requirement for a building design that appears “grounded” to the site to withstand alpine forces of wind, snow and heavy rain. The list of materials that support this design was expanded that could make up the base, but stone remains as the principal base material.
    • Eliminated the requirements that a gable roof shall be the primary form, and the roof pitch must be a minimum of 6:12 and a maximum of 12:12. Added the requirement that roof design shall be made up of multiple forms that emphasize sloped planes, varied ridgelines and vertical offsets.
    • Increased the list of appropriate roof materials to include black or gray standing seam materials that are not reflective. Provided for the general approval of certain synthetic materials after they have been proven to meet stated standards of durability, high strength and high quality design.
    • Eliminated the requirements that individual windows could not be larger than 40 square feet and only 20% of the north elevation shall be glass. Instead, the new regulations require window use and placement be responsive to energy requirements, be an integral part of the design of the structure and be sensitive to adjoining properties. The standard that no more than 40% of the exterior of a structure be glass remains.
  • There are currently 82 lots listed for sale in Mountain Village

Please contact me for additional information and discussion on our design review guidelines and if you’re interested in buying property to build a home. To stay informed, also Like my Facebook page at Telluride Real Estate News.