Pitkin County has plenty of bragging rights when it comes to its expensive housing market, like that flashy $ 72.5 million house sale in Red Mountain last month, or the 650-acre Snowmass Falls Ranch that has recently hit the market for $ 50 million.
But for all the furious action on the Aspen area’s jaw-dropping home sales, there has been multiple backlash. This includes making it even more difficult to rent or own a home in Pitkin County.
A recent study underscored this point, concluding that the trend of dwindling inventory and escalating house prices will persist for the foreseeable future in Pitkin County, as well as surrounding mountain town counties.
“Prices appear unlikely to correct as year-round residents can buy homes in the market or compete with part-time tenants and newcomers for rental homes,” the report said.
Released in June, the Mountain Migration Report is an in-depth review of the impact of the coronavirus pandemic on housing and services in hill station communities in Pitkin, Eagle, Grand, Routt, San Miguel and Summit counties. These counties are home to Colorado’s premier resort towns – including Aspen, Breckenridge, Snowmass Village, Steamboat Springs, Telluride, Vail, and Winter Park – which have attracted increased demand not only due to the relocation of people due to the pandemic, but also because of civil unrest, according to the report.
There are spillovers to that come with it, said the report, which issued a call to action of sorts to community leaders in the region studied. The report acknowledges that some potential solutions to consider are taboo – like building affordable housing on public property such as “school grounds, oversized parking lots, and prized civic properties like adjacent federal lands and (gasping) open spaces.” .
Still, “we don’t mind taking risks here. May this report be a wake-up call for local leaders, a renewed call to action for those already involved in community problem-solving, and a point of reference for those seeking to understand trends so that they can can have a positive impact on the places where they live. The consequences are real, ”wrote Jon Stavney and Margaret Bowes in the report’s introduction.
Stavney is executive director of the Northwestern Colorado Council of Governments, which partnered with the Colorado Association of Ski Towns, led by Bowes, to initiate the study. Supporting grants also came from the Colorado Department of Local Affairs and the Economic Development Administration.
Moving to the mountains
High-level employees and executives once strapped to their office chairs in Manhattan or Los Angeles, and also with the financial means to buy or rent at the more expensive resorts, have taken their jobs to higher altitudes. high.
These “location neutral” workers were already moving from metropolitan areas before the pandemic, a trend that the coronavirus “has rapidly accelerated,” according to the report.
These remote workers, however, do not fill local jobs and they “outperform local workers for housing,” according to the report. “It hurts the ability of local businesses to find, retain and attract employees, reducing the level and quality of services they can provide to residents and visitors. It has been a struggle for resort communities for years; and is poised to get worse, at least in the short term. Businesses, existing residents and communities could face a difficult transition in the years to come. “
Visitors also extended their vacations to seasonal rentals. Add in investment buyers and local labor, and the housing market becomes even tighter.
“Strong demand from part-time residents for homes, demand from visitors for vacation rentals and investment buyers were all competing for scarce housing stock with residents earning a living locally,” the report said. report. “The increased demand for housing fueled by the ability to work from home and, to a lesser extent, fears related to COVID and civil unrest, have further compounded this competition, causing house prices to explode and plummet. stocks. “
Aspen and the rest of Pitkin County fit a “trend that will continue to make mountain towns popular places to live for neutral workers,” according to the report.
If high house prices are a sign of popularity, then Aspen is in the running for the prom queen.
The average price of a single-family home purchased in Aspen in 2020 was $ 10.38 million, up 47.5% from the 2019 average of $ 7.25 million, according to data from the Real Estate Board of Aspen. Last year in Aspen alone also generated 176 purchases of single-family homes listed for sale, 77% more than 99 similar deals in 2019, according to the Board of Realtors.
And this real estate bubble that we were talking about bursting in 2021? Hold that thought.
“Some correction is possible for house prices and rents; However, the general perception among realtors in the area was that the high demand and low supply housing market is here to stay, at least for a while, ”the report says.
As of May of this year, 48 single-family homes listed in Aspen alone have sold for an average price of $ 12.1 million, according to statistics from the Board of Realtors. Residential stock in Aspen was also at its lowest level in May since 2009. There were 137 listings (which did not include deed-restricted residences and fractional ownership) that month, according to Andrew Ernemann of Aspen Snowmass. Sotheby’s International Realty.
“Last year there were approximately 375 residential sales in Aspen and approximately 260 sales in Snowmass Village,” he wrote in a recent newsletter. “This means that there are only a few months of supply (current listings) across the Aspen / Snowmass market today, and we are just heading into the main summer sales season. “
The report also noted, “The other side is reducing supply. Despite continued high demand, many regions are facing a stagnant market and a sharp drop in sales simply due to a supply issue. Some communities are already at a critical low sales inventory level. In Aspen, brokers call homeowners to ask if they want to sell to find homes. For the most part, those who wanted to cash in have; others who could cash the price are not because they cannot find another home.
Tenants are also affected. The cost of rent has increased by 20-40% in the area, where in “Aspen, a three-bedroom townhouse was renting for $ 6,800 / month. Upon delivery in October 2020, the rent was increased to $ 10,000 / month, ”the report says.
Since the pandemic disrupted local life as residents of Aspen knew, it was if the very issues the community had struggled with over the years were sprayed with fertilizer – whether it was lack of housing, size of traffic jams, shallow employee pool, congested backcountry trails and increasing cost of daily living.
As the report notes, mountain communities such as Aspen may feel the pressure when operating at seemingly near or full levels, with visitors staying longer and more homes purchased for longer-term use, rather than a few weeks a year. .
“When stays are increased and extended over longer periods of time, as happened during COVID, stress on the community and infrastructure is felt by all,” the report said.
The survey yielded 4,710 responses from residents of the six-county area. Pitkin County had the lowest number of responses, 446. Summit County’s 1,428 responses exceeded the others.
About 50% of homes in the six counties covered by the report are occupied by full-time residents, “the remainder being owned and occupied by part-time residents, investment buyers and visitors.”
Since half of these residences are occupied, “the influx of more landlords and visitors staying in part-time and short- and medium-term housing can, in theory, allow the region’s population to seemingly double overnight; and this does not include visitors who may be in commercial accommodation units (hotels). … When stays are increased and extended over longer periods of time, as happened during COVID, stress on the community and infrastructure is felt by all. “