In the summer of 2009 the Aspen, Colorado condo inventory peaked at about 400 units on the market. Over the past couple of years, this number has slowly eroded to about 200 which is about a 3.2 year supply at the current absorption rate. At the same time, the average asking price has fallen about 44% from a high of about $1,500/square foot in late 2008 to roughly $950/square foot today. In addition, the average days on market has steadily increased over the past couple of years to 316 days. In 2009, 54 condos sold in Aspen for a total dollar sales volume of $75.6M. In 2010, the total volume of condo sales increased 13% to $85.5M with 63 closings.
What do all of these numbers mean? They mean that the market has hit bottom and is now beginning to come back. The first thing that had to happen for a “comeback” was for the inventory to come down. As mentioned above, this happened with the inventory being reduced by about 50% during the past two years. Does this mean the market is now turning toward being a sellers market? To determine the answer to this question one has to look at the Market Action Index which measures the supply relative to the current level of demand and average days on the market for unsold properties. It is a collective index of all market factors combined and an early indicator of future market trends. An index value above 30 indicates conditions favorable to sellers – seller’s market. Whereas, a value of under 30 indicates the market is getting more favorable for buyers. Since early 2007, the Market Action Index fell from above 30 to a low of about 3. During the past year, the index has risen to about 11 signaling the market is still very much a buyer’s market. It is estimated that with the current rate of improvement, it will take about 18 to 24 months before this market will reach equilibrium between being a buyer’s or seller’s market. Consequently, during the next year plus there will continue to be some extraordinary deals available in the Aspen condo market. Please give me a call (970 309 3620), drop me an email (jgausnell@roaringforkrealty.com), or visit our website at http://www.roaringforkrealty.com/ to take advantage of the current buyer’s market.
Jack Gausnell
Roaring Fork Realty
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