Colorado Rockies Sees Uptick in Luxury Home Sales

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In Telluride there is a sense of normalcy settling over the market, broker Bill Fandel says.

The number of sales in Telluride has steadily increased in the last seven months, he notes, with 231 percent more sales in the fourth quarter of 2009 than the same quarter of the previous year (a.k.a. The Black Hole). And monthly dollar volumes for the first quarter of 2010 are anywhere from 50 to 300 percent ahead of the previous year's monthly total.

"The more important indicator of a rebound in the marketplace is the fact that the numbers for April are nearly two-thirds of those realized in April 2008," according to a market report from Fandel, vice president and managing broker of Peaks Real Estate/Sotheby's International Realty. "At that point in time, sales began to decline sharply with the ongoing economic crises."

In April Fandel made headlines by selling BootJack Ranch, a 3,100-acre spread of lakes and mountain passes, for $47 million (down from an $88 million asking price in 2008).

While price tags in Telluride may not be in the gaudy range of fellow Colorado resorts Aspen and Vail--always popular with the international ski set--the region is still making top-dollar sales, Fandel notes. So far this year there have been eight sales of more than $4 million, including three sales between $8 million and $10.1 million.

"The catalyst for stronger sales has been a willingness by some sellers to accept price levels 20 to 30 percent below the market highs of 2007," Fandel's report says. "Those sellers are not necessarily in 'must sell' situations, but are often times seeking liquidity for alternative investment."

Investors are gravitating to discounted "Grade A" properties and steering clear of "problematic foreclosure and short sale scenarios," helping to bolster prices.

At the same time, there is a contingent of sellers holding firm on prices, providing some backbone to the market. These stubborn owners "oddly have contributed to 'setting the bottom' and will influence the rise in future values," Fandel believes.

This scenario may sound familiar to anyone working in North American resort cities. Prices have dropped, but the people who don't need to sell are holding tight, waiting it out, ensuring that top properties will always be valued.

Realistically, Fandel's report does not anticipate "a boom cycle on the near horizon," but he does believe the data indicates "a strong renewed interest in investment."

"With the velocity of sales increasing, it is likely that a 'bottom' has been reached and sellers will over time resist these deeper discounts and the market will respond with gentle appreciation," he says.

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