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 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. 

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.

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.

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. 

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?

The Peaks Resort & Spa has been part of Telluride Ski & Golf Resort since July of 2015. At that time the resort purchased the commercial spaces and obtained the management contract for the hotel and the adjacent See Forever Village. The resort’s involvement is for the long term and although many improvements have already been made, there are even more exciting things to come.

Here are some highlights of recent Peaks activities:

• Talent: the great business management guru Peter Druker said “culture trumps strategy” and the team culture at the Peaks has shown an impressive resurgence under VP of Hospitality Rudy Sharp, Spa Director Todd Shaw and Food and Beverage Director Chris Wisocki.
• Physical Plant: It’s been the goal to get the core of the building running efficiently and although it’s a lot of non-sexy stuff, the HOA understands it is the foundation that allows great guest service to happen.
• Owner Engagement: Homeowners at the Peaks are now more engaged than ever and their participation is a great thing as they look at room-standards and other improvements.
• Telluride Golf Club Improvements: A major investment in snowmaking as part of a completely renovated golf practice facility are a huge benefit for the Peaks owners and guests.
• Steaming Bean: Smoothies, a juice bar, great breakfast items and grab and go selections are fantastic additions to the Peaks coffee shop.
• Altezza: A new and eclectic menu, a fresh décor and improved service added to the already un-rivaled views of Wilson Peak and the San Sophia mountain range now make Altezza a can’t miss dining experience in Telluride.   

Because of these factors and some future grand plans, real estate momentum is picking up at the Peaks. The values remain some of the best buys in Telluride. Owners enjoy special benefits and access privileges.

If you have comments, questions, or want to learn more about the Peaks or Telluride Real Estate opportunities, contact me anytime.

 

You may know that the Telluride box canyon was formed by a giant and ancient volcanic caldera subsequently carved out by ice age glaciers.

You may know that Telluride was founded in the 1870’s as a mining town and that it is a national historic landmark. And that the Town of Mountain Village is contemporary, modern and only 21 years old and that the two towns are connected by a free gondola.

You may also know that Telluride Ski & Golf Resort has been named the #1 resort in North America by Conde Naste 3 out of the last 5 years.

But did you know that our little slice of alpine heaven was once zoned for over 400,000 residents?

Here’s the Story…

The last mine was shut down in Telluride in 1978. About the same time, Ron Allred came to town with a vision for the new economic engine, the Telluride Ski Resort. The Resort had been operated only out of the Town of Telluride side as a very small ski area since 1969, but Ron Allred, using his vision and experience as a developer in Beaver Creek, had grand plans.

Due to the change of economic sustainability from mining to Tourism, a group was put together named TREPAC, the Telluride Region Planning Advisory Committee. TREPAC was put together to complete a master plan for the next 45 years.  TREPAC was comprised of 18 members, 6 representatives from San Miguel County, 6 from the Town of Telluride and 6 members at large that represented the four major landowners in the area. Their work was intended to virtually eliminate motor vehicle transportation, create zoning for hotels, keep telluride small, build an airport and infrastructure to support a resort tourism economy.

TREPAC’s vision was for 5 mountain villages, all connected by gondola, and each with its own commercial core. These villages included Telluride, Mountain Village, the Valley floor, Aldasaro and west meadows. Subsequently the zoning was reduced by TREPAC from 400,000 to 18,900 residents and guests. Outside of Telluride and Mountain Village in unincorporated San Miguel County, the residential zoning is 1 single family home per 35 acres of land.  

Of course, this vision of a European style gondola connected resort destination was laid to rest when the Valley Floor and West Meadows areas were permanently preserved as natural open spaces – further reducing the zoning in the area. Today there are only around 3,000 residents, and Telluride welcomes over a million guests per year to our Mountain Hamlet.

The moral of the story is today, mountain resorts have experienced an incredible amount of sprawl, congestion and density. Think of great resorts like Vail, Aspen and Park City that sprawl 50+ miles from their resort centers. Because of our zoning restrictions in place, Telluride will always be a small boutique destination.

Despite our limited zoning and density restrictions, Telluride remains a very attractive value for real estate investment when compared to other luxury mountain destinations.