ASPEN — The Pitkin County real estate industry experienced its worst campaign in six years in 2009, but veteran brokers found reasons for optimism in the fourth quarter.
For the year, total sales sagged to $1.07 billion from $1.37 billion the prior year, according to a report by Land Title Guarantee Co. and The Aspen Times' examination of deeds recorded in December with the Pitkin County Clerk's Office. That is a decrease of 22 percent from a year that was itself lackluster.
The number of transactions fell to about 703 from 828 the year before. The dollar volume and number of transactions is based on deeds filed with the county clerk through noon Dec. 31.
“It was a perfect storm — going in the wrong direction,” said Bob Starodoj, president and CEO of Mason & Morse Real Estate and a 40-year real estate agent in Aspen. “It's been the most volatile year I've ever experienced and probably the most volatile in the Aspen real estate market.”
Carol Ann Jacobson Kopf, a 42-year veteran of the Aspen real estate industry, said 2009 unfolded in a “predictable” way given the national recession.
“The bottom dropped out a year ago October,” she said. “It was dead through the first three quarters of this year.”
Buyers remained cautious for most of 2009 because they wanted to make sure prices bottomed out. Their confidence is now building, said Jacobson Kopf, who owned and operated her own firm for 35 years and is now with Aspen Real Estate Co.
Many sellers “have gotten off the greed factor” and started pricing realistically for today's market, she said.
A home and adjacent lot on East Bleeker Street sold for $14.1 million this month. The best properties in every price category are moving when properly priced, real estate agents said. That signifies buyers are interested in Aspen.
Starodoj said discounts are ranging between 5 and 20 percent off listing prices, rather than the 40 percent level experienced for a while earlier this year. Jacobson Kopf concurred.
Both Starodoj and Jacobson Kopf have reputations for avoiding the hype and spin that often dominates their industry. They said their honest assessment is the mood improved in the fourth quarter and that activity is starting to pick up.
“2009 got better as we went into the year,” Starodoj said. “The last three months have been positive compared to last year.”
The dollar volume of sales increased by 27 percent in September; 46 percent in October; and 26 percent in November, compared to the same months in 2008.
“The gap is closing — yet another month of increases over 2008 in both dollar volume and transactions,” Land Title Guarantee Co. said in its November report.
The streak will be broken this month. December sales appear to be down by double digits compared to December 2008.
Starodoj said the number of transactions is more meaningful than dollar volumes, because a few large sales one year or the other can skew statistics. The number of transactions climbed in September, October and November compared to last year, and is on par for December.
Nobody is expecting a quick, drastic recovery, Starodoj said. It will be more gradual.
“I'd say we're cautiously optimistic,” he said about 2010.
Starodoj said he believes there are still a lot of homes on the market at an unrealistic price. The sellers aren't truly motivated but they are fishing for a big sale. That inflates the inventory because those homes don't stand a chance of selling, he said.
On the other hand, “we've weeded out the bottom-feeder” buyers who were trolling for steals and making offers substantially lower than listing prices, he said.
Jacobson Kopf said it will take until 2011 for the market to return to normal, and until 2012 for property to appreciate again. That assumes no worldwide economic or political calamities.
She said she wasn't rattled by the slow activity or discounts of 2009.
“The cycles are always going to come and go,” she said. The market “just corrects itself every seven or eight years.”
Realistically, a real estate market that tops $1 billion in annual sales in an area as small as Pitkin County is strong — even if it doesn't match past performance. This year is similar to 2003, when the market topped $1 billion for the first time and started an incredibly strong spurt of growth. Sales volume reached a record $2.64 billion in 2006 and was nearly matched at $2.52 billion in 2007.
“We're never going to see 2007 again,” Starodoj said.
He said he expects the Pitkin County market to bounce back strong but doesn't expect buyers to throw around “loose money” like they did in the middle of the decade, fueling unsustainable appreciation.