March 14, 2022

When is it Time to Buy (or Sell)?

The questions most asked by my clients are:

 

Where does the Aspen/Snowmass market go from here?

Will the market correct and if so, when, and how much will prices decline?

Should I cash in and sell or ride the wave?

There are no easy answers, but I’ll do my best at addressing factors to consider in making your decision to Buy or Sell.

 

The future of the Aspen/Snowmass market can be affected by so many local, national and international factors; but, it is unique in that most Sellers and Buyers are not typically affected by financial factors. Sellers do not need to sell and Buyers are driven by instant gratification and want what they want. Aside from the financial crisis of 2008, factors such as national security (9/11) and the pandemic have had a more significant impact. The current unknowns are the looming war and inflation. Will a war keep people traveling within our borders and will inflation hurt the Aspen/Snowmass Sellers/Buyers?

 

Most recently, the Aspen/Snowmass market cycle was impacted by the change in the Federal tax laws that negated property tax deductions. People living in urban cities with significant taxes began to migrate to states like Colorado, Florida and Texas where they found the property prices high but the carrying costs, property taxes combined with low interest rates, low. The influx of new buyers to Aspen/Snowmass combined with the scarcity of available homes and condominiums put an upward strain on prices. On the heels of taxes, came the pandemic, which accelerated the exodus from the big cities in a way we have never seen before. Panic buying became the norm and prices sky-rocketed in both the sale and leasing of Roaring Fork Valley property. After two years of pandemic related buying and travel restrictions, will there be a return to the cities as the world begins to normalize and will there be a significant increase in listings? Increased listings could put into play “supply and demand” and turn the market in favor of Buyers. Just as we were rejoicing, the Russian/Ukraine war has once again upset the world. Will travel to Europe be curtailed again? Will the war widen into a global conflict?

 

Bottom line, if you are still contemplating a purchase of Aspen/Snowmass property, the market remains strong for Sellers as inventory is limited. While prices may stabilize, the Aspen/Snowmass market is unique in that it typically does not retreat in price, it plateaus. The recent wave of Buyers has significantly raised the “wealth meter” with High Net Worth and Ultra High Net Worth leading the way. This level of wealth, as I hinted at above, is not normally affected by the ups and downs of the economy. Sellers sell when they feel like it not when they miss a few mortgage payments. Will the recent Buyers succumb to the lure of their previous cities and sell or will Aspen/Snowmass remain as their new home base? Tipping the “supply and demand” scale is the key to whether the market continues its upward climb or stabilizes.

 

In my 40 years in Aspen there has never been such a meteoric rise in prices. For Sellers contemplating a departure from Aspen/Snowmass, now is a great time to cash in with 150+% increases in values over the past two years. Or if buying back into the market can wait a bit, it’s a good time to sell, bank the proceeds and wait for a future flattening in the market. For Buyers, it may be a time to wait out the direction of the war and whether recent newcomers decide they prefer their urban cities, resulting in a rise of listings/supply. However, while prices may flatten the Aspen/Snowmass market has always shown resiliency and staying power.

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