In This Market, What is a "Low-ball" Offer?

When you make your initial offer on a property I think the goal is to take the Seller’s “temperature”. Are the Seller’s goals realistic in today’s market? If the property is over priced, 20% to 30% off of the list price is the right low ball offer. If the property has been priced to reflect the real market conditions, 15% to 20% off list price is the right “low ball” offer.

If you don’t get a response from the Seller everyone has wasted their time. That sometimes happens if the “low-ball” is to low. Your Broker should be able to guide you by getting information about the Seller’s motivation and property values in today’s market.

- Dale Potvin, Owner/Broker

Recent Sales - A Result of Long Standing Contracts

Of the few larger sales ($3,000,000+) we have seen in the last couple of months, many have contract dates from long ago, ie 1+ years. Expensive properties that have sold AND that have actually gone under contract in the last 6 months are very rare.

Matt Holstein, Associate Broker

Inauguaration lifts my spirits and hope for a new era for our country.

If you are like me, all the negative business news we have heard and been part of for the last few months can create a sense of confusion and test your positive outlook on life. I have always felt I could control my destiny, but melt downs like we have seen in the banking and the investment world lately have caused me to wonder if the United States is spinning out of control. For me, the event of Barrack Obama’s inauguration as the President of the United States brings a refreshing wave of new energy and optimism into every American life. It should remind us of how lucky we are to live in this free country. It is my hope that it is now our time to be part of a thoughtful, intelligent and inspiring approach to governance which will start to lead us in a new direction. The old world of greed in business and lack of respect for our environment is a time passed. Now we must roll up our sleeves and get back to work to produce real value for our rewards, find real approaches to sustainable living and develope real relationships with the world of nations we are a part of.

-Dale Potvin, Owner/Broker

Value in Decreased Construction Costs

The value right now is in decreased construction costs. Labor and materials are both down in price, so if you have been looking for a time to do a remodel, and have the money, this is a good time to do it.

- Matt Holstein, Associate Broker

Adding Some Vision Can Make a Deal Scream!

Cathers Vision Original Home

Many homes on the market in Aspen are older structures that have a distinctive late 60’s and 70’s feel. Some buyers can’t look past yesterday’s layout to find the true value for a deal. As a seller of a property like this, it might be worthwhile to engage a builder or interior designer to help create a new vision. This can be really effective and add accents to the bones of an older home. What might have been considered a scraper actually could turn out to be a screaming deal!For example, on one of our Red Mountain listings we added a new vision with the help of Mark Dougherty of Cathers Home Builders in Basalt (the construction division of Cathers Home interiors). The home, located on 41 Salvation Circle was built in 1972. At fist glance, many would argue that it has “that 70’s feel.” Mark was able to see thru this, make a few changes on a sketch and now you can see the home as the ideal canvas for a modern contemporary home. Mark's redesign of the interior layout highlights some of the older features, such as the massive beams in the living room, opened up the kitchen by eliminating a small office that presently is above it and added an ultra modern staircase.This 6,300 square ft home is listed for $8,450,000 or $1,341 per sq ft. There are ten (10) homes on Red Mountain 6300 square foot or larger. Excluding this property, the other nine (9) homes this size or larger are priced between $13.5 and $28 Million.Of the six (6) red mountain lots on the market, only one lot is listed under the price of this home ($6,995,000) and the other five are priced between $8.6 and $10 Million.Of course, fulfilling Mark Dougherty’s vision will require some investment in remodeling and construction cost, but the finished product gives you a spacious modern, mountain, contemporary home that feels new. As a seller, if you can get someone like Mark with a vision for your property, it may help prospective buyers see the value in your home better.

- Tom Kilby, Associate Broker

The Sales Tax Revenue Barometer

Sales tax revenues are a good barometer in gauging the strength of local economies. Aspen’s latest reported sales tax figures for November 2008 reflect the continuing economic downturn, slipping 5.5% overall. Tourist accommodations, sports equipment and clothing stores took the biggest hit – all off by approximately 20% compared to the same period in 2007. It is interesting to note that luxury items, namely furs, jewelry and galleries were up 49%, 58% and 38% respectively from November 2007 sales tax reports.

-Lynne Cantrell, Associate Broker

When Real Estate Gets Creative…

I just heard about an owner that has a newly completed 5,000 sq ft luxury home that he wants to share ownership of…And he’s offering a buyout in 5 yrs at a preferred return. He put in over 14 million but he’s willing to value it at less, given the current market. Interesting outcome of today’s market…

- Dale Potvin, Associate Broker

If it snows, they will come, but will they buy?

Holiday lift numbers were only down between 8% - 9%, most likely a pleasant surprise for Aspen Skiing Company - which like all Aspen businesses was holding its breath to see that would really happen. The town was “on sale” as all retail outlets promoted good deals. I checked with many of my broker friends from other offices to determine if holiday shopping included any real estate activity and confirmed few showings and fewer contracts. This period is traditionally not the busiest for real estate as Christmas, Hanukkah, short day light hours and visiting family members leave little time to squeeze in real estate showings. Early January continues to see new snow almost every day so skiers should be making last minute decisions to come to Aspen. The smart real estate investors in the group will take this timely opportunity to make offers on quality properties. Remember the old saying “Buy Low, Sell High”. Now may be the time to accomplish the first part of a good investment.

- Dale Potvin, Managing Broker

What Does 2009 Mean For Real Estate...?

It means, building inventories, more realistic Sellers, and Buyers with different motivations.

A group of Buyers looking for a very particular type of property will return to the Aspen market. They will enjoy a large selection of options and make deals at 10% to 15% below the high level in 06/07. Another group of Buyers will be thinking that the prices will drop 30% to 40% as they have seen with other equity investments. There may be a few opportunities for this group in the very high-end market due to a large inventory of unsold houses that where built on speculation and/or due to financial problems not associated with Aspen...Bottom line, real pricing will make 2009 a good time to buy.

- Dale Potvin, Managing Broker

The Greening of Aspen, Part IV

In addition to the efforts by the City of Aspen, the non-profit organization CORE (Community Office for Resource Efficiency – www.aspencore.org) offers grants and other financial help to those wishing to add renewable energy features to their home. CORE supports environmental initiatives in the Valley such as reducing the use of plastic bags. CORE also oversees REMP (renewable energy mitigation program). REMP requires homebuilders who want to install a high energy using feature such as a hot tub or heated driveway to either offset the extra energy use with the addition of renewable energy at their home or to pay into the REMP fund. These funds are then used to support renewable energy projects in Aspen and the rest of the Roaring Fork Valley.

- Lynne Cantrell, Associate Broker