Market Information

2019 Telluride Real Estate Market Update

The 2018/2019 Telluride real estate market continues to roll. We are still seeing great values in Mountain Village and the occasional hot deal in the Town of Telluride. The surrounding Mesa's and Ranches saw increased demand and pricing pressure as well. 

  • YTD Transactions Down 19%
  • YTD Dollar Volume Down 13%
  • Data Excludes Deed Restricted and Fractional Properties 
  • Smaller more affordable inventory have sold leaving larger more expensive properties for sale in general
  • I Update and Distribute This Report Quarterly - Please Contact Me with Questions

Local, State and National Politics Affecting Telluride Real Estate

Affordable Housing Proposals see Mixed Results on Election Day.

Three issues specifically facing voters in Telluride on Election Day saw mixed results. The hotly debated proposals for a property tax increase for Affordable Housing seem to have passed by the narrowest of margins. Measure 2A, which levies a 2 mil increase on Telluride residential properties seems to have passed by about 32 votes. 2C, which requires voter approval to bond the money collected passed by a slightly larger margin. One affordable housing measure that did not pass was measure 2B, which proposed a sales tax increase and would have likely raised more money for affordable housing than the property tax measure.

The Telluride Association of REALTORS® will continue to monitor new developments in the affordable housing discussion and will always be an advocate for housing for all.

Property Tax Proposals Pass in Telluride, other Local Areas

In addition to the ballot questions regarding affordable housing, a number of different property tax proposals that raised money for specific needs/purposes all received approval from area voters.

Voters said yes to property tax hikes requested on this election’s ballots that will help support the fire, school and hospital districts. Each of those measures passed with convincing margins, ensuring that voter approved funding will be in place to compensate for funding shortfalls brought about by declining property tax revenues.

The Telluride Fire District won a 2 mil increase and a Gallagher Amendment adjustment that makes up for revenue gaps in lean tax years. The proposal won by a 70-30 margin.

The Telluride Hospital District won a similar increase and adjustment by a slightly larger margin. Officials say the revenue will assist with better emergency facilities and better overall service to the public. 

Finally, the Telluride School District won their question by a slightly smaller 64-36 margin. The $1.2 million in annual revenue the district will receive as a result of the approval of Ballot Issue 4A will be used for attracting and retaining high quality teachers, general operations, programming, and maintaining class sizes.

Business Improvement District Plan Fails for Third Time

The third time was definitely not a charm for supporters of the creation of a Downtown Improvement District. The third go round at this issue was defeated by a count of 64 supporting and 108 against.

The BID funding would have been spent on improvements within the district, including snow removal, more frequent trash pick-up, marketing, way-finding signage and other services.

Under the BID plan, downtown was split into two zones. Businesses on Yampa Street and Lincoln Avenue and the side streets between them were in the premium zone. If the BID funding were approved, these businesses would have paid a special frontage assessment of $10.29 per linear foot and a mill levy of 2.22 mills. Nonprofits in the areas of Lincoln and Yampa would only have paid the special assessment and could have applied to waive or reduce what they paid on the special assessment. Nonprofits on Oak Street would not have paid any additional taxes. All other businesses in the district would have been in the standard zone and would only have paid the 2.22 mill levy.

It is unclear what will happen moving forward.

State News: Colorado Legislature Turns More Blue, Most Statewide Ballot Issues Fail

Colorado Democrats had a huge night on Tuesday, gaining control of all houses of the Colorado General Assembly. Jarod Polis becomes Colorado’s Governor, Democrats held their majority in the House of Representatives, and were able to gain three seats in the Senate to gain a 19-16 advantage. For the Colorado Association of REALTORS®, there were many wins and losses across the state. Groups like CAR are always hoping for a split legislature, which makes it tougher for bad ideas to make it all the way through the legislature. However, CAR remains excited to greet and work with the many new members of the legislature and work with them to insure that housing issues remain high on their lists of priorities.

On the ballot measure side, Colorado voters rejected nearly every proposal put in front of them that included tax increases. Both transportation funding measures (Prop 109 and the CAR supported Prop 110) failed to gain approval by similar 40-60 margins of defeat.  Amendment 73 (Opposed by CAR) would have significantly raised taxes for education funding was defeated by a 55-45 margin. Proposition 112 was opposed by CAR and would have significantly increased restrictions on the oil and gas industry was also defeated by a 56-44 measure.

National News: The Election Shows Political Divide Still Strong Across the Country

As is the case in almost every mid-term election in the modern area, the party not in the White House experienced large gains across the country on Election Night. However, the party in the White House actually strengthened its majority in the Senate, a phenomenon that does not usually occur in the midterms.

The end result is that the Democrats regained control of the House of Representatives after 10 years of Republican control and the Republicans increased their majority in the Senate. While it’s easy to lament these results as a forbearance of gridlock for the next two years, it's important to remember that balance between the parties isn’t a bad thing. The founding fathers of this country sought balance in the structure of our government and gave us a system to fully debate and vet all ideas before they become law. It might feel like gridlock, but it is actually our country at work making sure bad ideas don’t get fast tracked into law.

Opportunity Zone Proposed Rules Released

On October 19, the Treasury Department released proposed rules for Qualified Opportunity Zones, a federal program created by the Tax Cuts and Jobs Act in 2017.  The program incentivizes investment and development in distressed communities, designated as “Qualified Opportunity Zones” (QOZs) through tax benefits for investors.  These benefits include deferral of federal capital gains tax on qualified capital gains reinvested into a QOZ (via an “Opportunity Fund”), and potential reduction in the tax ultimately paid on those gains (if held for five years they receive a step-up in basis of 10%; if held for seven, 15%).  In addition, gains accrued on investments while in an Opportunity Fund and invested into a QOZ may be exempted from federal capital gains tax, if the investments are from a proper deferral election (reinvested capital gains that the tax is deferred on) and held for at least ten years.

The proposed rules provide important clarifications for interested investors, including the type of gains  eligible for tax deferral (capital only), how investments into Opportunity Funds made of both capital gains proceeds and non-gains funds are treated, the overall timeline for the program, how to certify an Opportunity Fund and meet the “90% asset requirement” (that 90% of a fund’s assets be held in a QOZ), and how they will determine that an Opportunity Fund has “substantially improved” a QOZ business property.  Further proposed rules are expected on other aspects of the program, and the IRS will hold a hearing on the issue on January 10, 2019.

Source: Telluride Association of Realtors - Government Affairs

 

Town of Telluride Commercial Real Estate Market Report

Information Provided By Rocky Mountain Real Estate Brokers

Whole Building Sales:

  • The Strong House, 283 South Fir, sold for $2,600 MLS #33887
  • The Belmont Building, 124 East Colorado, sold for $2,200,000 MLS #32628
  • The Yarn Store, 320 W. Colorado, Sold for $1,400,000 MLS# 33705 Commercial Condominium sales:
  • Art House Corner of Fir and Pacific, sold for $835,000 MLS #33923
  • Eye care store, 395 East Colorado, sold for $550,000 MLS #34373
  • Pack it Ship it, Old Watch Space 125 West Pacific, sold for $479,000 MLS #32379
  • There Restaurant space, 627 West Pacific, sold for $570,000 MLS #34610
  • 110 South Pine, Sold for $550,000 MLS #35490

The following office spaces sold:

  • John Steel’s office, 126 West Colorado Ave, sold for $425,000 MLS #34855
  • New San Juan Office suites 211 & 212, 220 East Colorado Ave. sold for $265,000 MLS #34260 Vacant Land
  • 219 West Pacific, sold for $880,000 MLS #35504

Availability in the commercial sector is very slim and limited. Current whole structure commercial properties listed include:

  • Old Bank Building 109 West Colorado, latest asking $2,790,000 MLS #35785
  • 115 West Colorado, Asking price $4,400,000 MLS #35263
  • 121 North Pine Storage/Residential, Asking price $3,000,000 MLS #34234
  • 398 W Colorado, Pederson Building, Asking price $7,000,000 MLS# 35732 Commercial Spaces listed:
  • Fir House Commercial 2, Asking price $1,425,000 MLS #33928
  • Fir House Commercial 1, Asking price $1,010,000 MLS #33926
  • 547 ½ West Pacific, Vet Clinic, Asking price $939,000 MLS#35586
  • 124 East Pacific, Old Security Title, Asking price $350,000 MLS#35759 TREB Bulletin Under contract
  • Bell Building, 217 West Colorado, Asking price $3,250,000 MLS #32563 Recently Expired/Withdrawn properties:
  • 215 East Colorado, Hell Bent Leather, Asking price $995,000 MLS #34908 Business Opportunity
  • Baked in Telluride, Asking price $695,000 MLS # 35948

A few notable changes in business moves and startups:

  • The Last Dollar Saloon is undergoing a major renovation to be opened soon, there will be a roof top bar expected to open in August. The National Restaurant behind the Last Dollar is planned to open for the Winter Season. 
  • Taco Del Gnar opened up at 123 South Oak
  • SMART transit service is moving into the commercial space in the Spruce Street House on the corner of Spruce and Pacific.
  • The Town of Telluride is moving forward with the construction of the building on south Fir and Pacific on what is locally known as the S.M.P.A. lot. This building will contain underground parking, The Ah- Haa School for the Arts and Affordable Housing.
  • The Merriweather four corners project is moving along, one building on the corner of Fir and Pacific is complete. The Transfer warehouse received a facelift and has been conveyed to Telluride Arts, and the main building to the south of the Transfer warehouse is framed and being finished.
  • Of the two buildings south of the Library on Pine, one of these buildings is finished and the other is nearly complete. I am not aware of who will occupy the commercial spaces in these buildings.
  • The Pederson building on Colorado Ave. on the corner of south Aspen is undergoing an extensive remodel and expansion.
  • Down to Earth was sold to Lauren Reed and the business was moved to South Oak underneath the Visitors center.
  • The old Belmont Building is now occupied by Crossbow Leather shop.
  • The Senate Building on South Spruce has been completed.
  • The old Wagner Gallery on 120 North Fir is totally being remodeled into residential units.
  • The Wizard moved to the Old Yarn store at 320 West Colorado.
  • No news regarding the state of the Hotel Ajax.

Information provided by Rocky Mountain Commercial Brokers

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.

 

Telluride Real Estate Market Inventory Snapshot

The Telluride real estate market continues to hold great potential for investment, rental income, personal enjoyment and asset appreciation. The Condo segment in the Town of Telluride is seeing the greatest demand for listings and inventory and is thus enjoying the highest rate of pricing growth. The best values and available inventory currently exist in Mountain Village and the nearby mesas. 

Please contact me for more market information and specific property questions. 

Telluride Real Estate Market Velocity and Absorption Rate - January 2018

Today's topic is "Velocity". While we are enjoying velocity on the slopes and the momentum recent snows have provided, I also want to discuss the velocity in the Telluride real estate market. Also known as "absorption rate", it is rate at which properties are sold and is a leading indicator of the health of a particular real estate market. Another way to look at it is how long properties are listed for sale before they are actually sold. The two graphs below reflect the velocity in the market in the last year. Pay particular attention to the amount of inventory sold in the last year versus the amount of inventory currently listed for sale in each segment. 

In the Town of Telluride the Absorption Rate for Homes was 25 months in 2016 and only 15 months in 2017. For Condos, the Absorption Rate was 12 months in 2016 and only 8 months in 2017.

For Mountain Village, the Absorption Rate for Homes was 36 months in 2016 and only 27 months in 2017. For Condos, the Absorption Rate was 21 months in 2016 and only 11 months in 2017.

Telluride Real Estate Market Update Through November, 2017

The Telluride real estate market continues to hold strong 11 months into the year with dollar volume and number of transactions at a 6-year record high. $547.5M in contracts closed through November, and sales are up 35%. The number of sales are up 13% compared to those through November of 2016. TREC is pleased that its transactions have exceeded that of the market up 38% over those through November of 2016.

Mountain Village continues to see a steady number of high-end luxury homes and condos trading hands. This year has seen twelve sales over $4M in Mountain Village. Overall, Mountain Village single-family home and condo/townhome sales are nearly twice that relative to sales through Q3 ‘16.

Despite the limited inventory, properties in the Town of Telluride are still trading briskly, with the number of sales up 32% over the third quarter of 2016. This year has seen eight sales over $4M in the Town of Telluride. 

Nearing a close to the final quarter of the year, the Telluride real estate market outlook is positive. October and November saw four $5.0M+ Town of Telluride home sales, four $2.7M+ Mountain Village condo/townhome sales, and a $5.15M Mountain Village home sale. With $83.7M in sales currently under contract according to the MLS, we look forward to December's sales results.

Telluride Real Estate 2017 Mid-Year Market Report

The Telluride Real Estate market continues to gain momentum as we garner worldwide recognition for being one of the best small towns in the nation. The Telluride Ski & Golf Resort has been named the #1 resort in North America for 4 of the last 5 years by the readers of Conde Naste magazine. We have the most amazing festivals, shops, restaurants and lodging options you could hope for and the natural beauty of the San Juan Mountains allow for a lifetime of exploration and multi-generational alpine lifestyle. Given all these factors, it’s no wonder we are seeing the real estate market respond so positively to the increasing allure of the Telluride region.

Here are the mid-year highlights of the 2017 Telluride Real Estate Market:

  • Year to date (YTD) real estate transactional dollar volume is up 50% over 2016 at $267 Million.
  • Telluride Real Estate Corp./Christie’s International Real Estate’s dollar volume is up 51% YTD.
  • YTD number of transactions is up 21% over 2016 at 307 transactions
  • Currently there are 104 homes, 175 condos and 124 lots listed for sale in Telluride and Mountain Village proper representing 21 months of inventory.
  • Because of the lack of inventory in the Town of Telluride, it has become a seller’s market and the best deals on a price per value basis are now larger homes and lots in Mountain Village. Mountain Village home sales are double over prior year.
  • Distribution of sales so far this year are roughly split in thirds between Telluride, Mountain Village and the remainder of the County.
  • Condos represent roughly 44% of sales and lots and residential sales represent about 25% each.
  • The subdivisions of Aldasoro Ranch, the Ski Ranches and residential homes on 35-acre parcels represent some tremendous values in the region.

This year’s real estate market is in a very interesting position where Sellers can achieve good value and there are still very good deals for Buyers compared to our competitive set of Aspen, Jackson Hole and Sun Valley.

Please contact me for additional information and discussions on the Telluride Real Estate market. To stay informed, check out my website at www.telluriderealestates.com and Like my Facebook page at Telluride Real Estate News. 

The Ultimate Telluride Real Estate Buyers Guide

Interested in buying real estate in Telluride? Perhaps a mountain condo or multi-generational retreat? A property you can 1031 exchange into or a real estate and rental investment? Look no further for insights into the nuances of what it means to be a property owner in Telluride. It’s my pleasure to present the ultimate buyers guide for Telluride Real Estate.

What to Be Prepared For:

  • The 3% Real Estate Transfer Assessment:
    • Both the Town of Telluride and the Telluride Mountain Village Owner’s Association (TMVOA) have a 3% real estate transfer assessment almost always paid by the buyer. But before you fret, understand that these funds go for very important property value enhancing programs. In the Town of Telluride, the fund is used exclusively for Town capital projects. In Mountain Village, the fund runs and maintains the free public gondola, Dial-A-Ride on demand transportation for owners and guests, member social events and economic stimulus.
  • Understand Your Purchase Power:
    • If you are a cash buyer, you are in the driver’s seat. If financing, make sure to get a pre-qualification to understand how much property you can afford. We as Brokers have shown many dream properties that buyers fall in love with only to realize the lenders won’t back the purchase.
  • The Emotional Roller-Coaster:
    • Offers are submitted and countered. Competing bids may trump your offer. Dates for due-diligence, inspections and their resolutions can be an emotional roller coaster. Title and HOA document review are important part of the process. This is where a knowledgeable and committed broker understanding and representing your interests are worth their weight in gold. You will be well guarded against the risks of the process.
  •  Appraisal and Inspection:
    • Is the home you are purchasing worthy of the price and condition of the property? An independent appraisal is required if you are financing and is a good idea overall for your piece of mind.
    • After inspection, the deal can get tricky. What are you going to ask the seller to fix? What if they refuse? Many a deal has been undone by the inspection and subsequent resolution negotiations.
  • Home Insurance, Warranties and Title Insurance:
    • Your broker will have a list of trusted and recommended professionals to assist you with policies and coverage to put your mind at ease
  • Closing – Congratulations!
    • The final walk-through will give you the opportunity to make sure you’ve found the perfect property to fulfill your real estate objectives
    • Your closing costs and settlement charges will be clearly outlined in the closing statements. Applicable expenses such as property taxes, utilities and rental income will be appropriately pro-rated.
    • Your broker should provide you with a buyer’s checklist to switch utility billing, cable and internet services, rental management companies and property maintenance specialists.

Please contact me for additional information and discussion on the Telluride home-buying process. To stay informed, check out my website at www.telluriderealestates.com and Like my Facebook page at Telluride Real Estate News. How can I assist you today?