Posted: June 01, 2009
Who owns Colorado: Telluride
Comatose but not dead: Smaller houses gain fashion in downturnBy David Lewis
In this state, Telluride vies only with Aspen and maybe Vail when it comes to glamour and glitz: Tom Cruise and Katie Holmes, Gen. Norman Schwarzkopf and now Jerry Seinfeld. Oprah.
Need more be said?
Telluride was and is more or less a remote little mountain town in a box canyon with Bridal Veil Falls at one end, noted as seat of San Miguel County, which is still a jurisdiction without a stop light, and for its wild silver mining days and its downtown Telluride Historic District.
To condense Telluride history a bit, there was mining, then came skiing, then came the Telluride Regional Airport, then came glitz and glamour. Without skiing and flying, Telluride might have ended in obscurity, which in real estate terms means something less than the $1,300 per-square-foot and up stratosphere the town heretofore has sometimes occupied.
To keep the glitz and glamour going, the town of 2,221 (2000 U.S. Census) hosts: the Telluride Film Festival, Mountain Film Festival, Telluride Jazz Celebration, Balloon Rally, Telluride Bluegrass Festival, Telluride Wine Festival, Fireman’s Fourth of July Celebration, Telluride Tech Festival, Telluride Festival of the Arts, Mushroom Festival and Telluride Blues & Brews Festival.
And that’s just the summer festivals.
That’s why the Olympic Penthouse, a $5.9 million condo for sale downtown, was designed with an 800-square-foot roof deck so tony cocktail partygoers can hear the music and see the fireworks, and also designed with high-end sound suppression windows, so partygoers don’t have to see and hear the fireworks and music.
Great idea, but is the party over?
Olympic Penthouse had been on the market about five months at this writing. “Because it hasn’t sold, is still sitting on the market and no one has made an offer, you can argue that our market is not supporting” the condo’s price tag, said broker Corey Chandler. “It is a one-of-a-kind piece, so that we feel that we can price aggressively, but we are not in denial; we recognize that we are in a full-blown recession.”
Is the town’s real estate market, like its mega-resort cousins, wasting away in the doldrums? Or is it worse than that?
"Telluride is “lethargic,” says town of Telluride director of planning and building Chris Hawkins. “Comatose.”
And that’s the good news, because “comatose,” let us not forget, is still not “dead.” Out of about 170 homes on the market as of this writing, about two dozen could be classed as distress sales, said Chris Sommers, real estate broker with Telluride Real Estate Corp. That means they are being offered for 20 percent to 40 percent off comparable listings.
That does not mean these homes are selling, Sommers added, “But there are certainly sales going on, and value seekers in the market.”
Another symptom of the slowdown, he said, is that even the most affluent buyers are adding debt to what a year or two ago might have been a cash purchase. This is both because interest rates are low and because of an understandable desire, even among the mega-rich, to preserve capital.
George Harvey Jr. has been a Telluride Realtor for 25 years and he is the president of the Colorado Association of Realtors, so when he says he has never seen anything like this market, that’s saying something.
“This has never happened before in our lifetimes,” Harvey said. “In past recessions, every one of them, our clients flew above the storm.” Even the nasty crash of the 1980s caused merely a “six-month lull,” Harvey says, while he predicts Colorado resort real estate activity this time won’t recover for another five years.
Telluride real estate sales fell 46 percent in 2008 from 2007, with sales volume of $343.3 million, down 55 percent. This year, the Telluride real estate market is down as much as 20 percent, Harvey said, with other state resorts slumping by 8 percent to 15 percent. (Meantime, Harvey reported, the ranks of the Telluride Realtors Association thinned 20 percent year-to-year.)
“I really thought the market was going to slow down and predicted that,” he said. “I did not know that by October 2008 we were going to have what I call ‘the end of civilization’ fear. You knew it was slowing down all year. What you did not know was that there was a cliff out there that all of these people started going over.” But people don’t last in the real estate business by dwelling on the everlasting negative. “2010 will see an uptick, “Harvey predicts.
Harvey and planning director Hawkins bring up the same amazing trend. “You’re going to see smaller houses, houses that are more energy-efficient,” he said. “We’ve been talking about this for 20 or more years, but we’re finally going to get it.”
Meanwhile the planning office is actually “seeing people ask for less square footage” in their applications,” Hawkins says.
One of these is a project on the drawing board of Ray Messier, president of Telluride-based R.A. Messier Construction.
Messier had planned previously a triplex of about 5,200 square feet on a 2,800-square-foot lot. Then he amended his submission to the town to about 3,000 square feet.
To Messier this re-filing represents “a shift in philosophy. We are entering a period of development where the concept of maximizing every property and getting as much square footage as you can as the driving philosophy has reached its limit. The concept of ’more is better’ is over, it’s outdated. It’s been proven ‘more’ doesn’t equate to happiness.”
David Lewis is a freelance writer based in Denver.