Bill Marshall
Broker Associate

office: 970.728.1601
cell: 970.708.2279
fax: 970.728.3049

Bill@TrideHomes.com
www.TrideHomes.com

Main Street Office:
232 West Colorado Ave.
Telluride, CO 81435

TELLURIDE MARKET FORECLOSURES

State of the Town Address
Every six months it is the responsibility of the Mayor to deliver the State of the Town address. This mid-year event helps us look at our Goals and Objectives and judge whether or not we have continued to work effectively towards their completion. Below are some of the projects that we have dealt with in the past six months. It is an impressive list and shows a continued desire to take on the challenges and opportunities facing our community.  Despite considerable economic uncertainty on the national level, our municipal budget remains stable. Our town staff and the council will continue to closely monitor our revenues and expenditures to insure that the town’s financial resources remain healthy.

Real Estate Update
June marked yet another month of declining real estate sales in the Telluride region, according to a report compiled by local real estate analyst Judi Kiernan, president of Telluride Consulting. Twenty-four sales worth a combined total of $10.6 million closed last month. The numbers represent a 48 percent decline in sales and 73 percent decrease in dollar volume compared to the same time last year. June 2007 saw closings on 46 properties totaling $38.6 million in sales. “Twenty-four sales isn’t horrible, but the low dollar volume is a direct reflection of what sold,” Kiernan said, explaining that 11 of the sales were of vacant land, while four more were fractional ownerships, the least expensive real estate transactions available. The June sales figures did not trouble Peak’s Real Estate/Sotheby’s International Realty broker associate J.J. Ossola. “Clearly the numbers don’t lie, but we are seeing a bit of activity,” more so in the single family home rather than condominium market, he said.

“Overall the general sense is that Telluride is not getting any less beautiful.” “We’re basically tracking along with other mountain resorts,” said Telluride Real Estate Corporation president T.D. Smith. “There’s a lot of negative outside factors that are definitely affecting the second home market,” he continued, citing volatile credit, financial and stock markets and a costly and uncertain energy climate. Nevertheless, “I expect we’re going to see a decent summer, and I expect an even more robust market in the winter,” Smith said.

Kiernan attributed the decrease in sales - four in Telluride, seven in Mountain Village and 13 elsewhere in San Miguel County - to the strong financial standings of potential sellers who can afford to wait until the market improves before selling their properties. “It’s very important to note that most sellers are not desperate,” she said. “Telluride is not a good place for a bottom feeder. Most of our sellers aren’t in a position to succumb to that pressure,” particularly at the highest end of the market. “So few Mountain Village home sales indicates to me that those people just don’t have to sell; they’re not going to give it away,” she said.

Despite the continued declining sales, Kiernan remained optimistic that local real estate values remain strong, explaining that sellers continue to acquire higher purchase prices than they themselves paid for their properties. “I don’t see that it’s time to send out the alarm,” she said. Still, the blue-sky asking prices of days gone by aren’t faring so well. “It’s a very typical behavior for a market to increase its expectations until there’s a reality check, and we’re in a reality check,” said Kiernan, who described the recent sales of three lots in the Ski Ranches as having taken a “fairly significant” reduction in their asking prices. “They were asking way higher than anything had sold for in that market,” she said. “A 5 to 10 percent [reduction] is fairly typical, these were coming in at more like 15 percent. “My really strong sense is that what things are selling for is what they should be,” she said. “This is not a reduction in value, it’s a reduction in expectations.”

Additionally, the high foreclosure rates that have sent property values plummeting in areas throughout the country remain minimal in the local area. Nationally, foreclosure filings in June decreased 3 percent from the previous month, but remained 53 percent higher than the same time last year, according to RealtyTrac, an online marketer of foreclosure properties, in its monthly foreclosure report. “Foreclosures are way, way up; people are in trouble,” Kiernan said. “There is a decline in value in other areas.”

The states of Nevada, California and Arizona posted the highest state foreclosure rates in the country in June, when one in every 122, 192 and 201 households, respectively, received a foreclosure filing. Comparatively, Colorado ranked seventh in the nation for foreclosures in June, when one out of every 429 households received a foreclosure filing. The number represents a 9.6 percent decline in the state foreclosure rate from the previous month, and a 14.5 percent decrease from the previous year, according to

RealtyTrac Statistics
Even closer to home, the San Miguel County Treasurer’s Office reported six active foreclosures. With the most recent statistics available from the U.S. Census Bureau indicating that there are 3,015 households in San Miguel County, the local foreclosure rate is approximately one per 503 households.

Finally, Kiernan pointed to incomplete projects such as Element 52 in Telluride, and Capella and Lumière in Mountain Village, which contain 102 condominium units between them, as impacting regional sales figures. Although a number of buyers have already entered advance contracts to buy the units, the actual sales have not been transacted because the projects have yet to come online, she explained. “We contracted most of our inventory in December 2005 and early 2006 as part of the pre-sales campaign that got the project launched,” said Ossola, who is the official listing agent for Lumière, which has 14 of its 19 units under contract. Fourteen of Element 52’s 35 units are also under contract. Smith suggested that units that are now beginning to close at the Arrabelle at Vail Square - which he estimated went under contract about three years ago - may be giving a bump to the Vail real estate market in an otherwise lean time.

Additionally, “We’ve got upwards of $50 million under contract right now, but nothing is going to close anytime soon,” he said. “The pool of available buyer money is committed into contracts,” Kiernan said. “They’re not shopping because they’ve already shopped.”