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- Colorado real estate is booming despite pandemic uncertainty and a volatile market, especially at the high end and among millennials looking for a big move.
- Business Insider spoke with millennial migrants and top real-estate agents from all over the state who described a massive influx of buyers as urbanites flock to open spaces.
- The median sale and list prices for homes in three of Colorado’s most popular cities have increased since 2019, while price cuts and inventories have seen major drops.
- Denver real estate had a record-setting July, and Vail recently set a local record for a sale, at $57.25 million. Even Mike Bloomberg bought property in Colorado during the pandemic.
- Steven Shane, an agent in Aspen, said the resort town was set to close over $1 billion in sales over the 35-day period ending on September 30 — almost 10 times the volume for the same period in 2019.
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Steven Shane, Compass’ top agent in Aspen, Colorado, says the resort town has $1.084 billion in property under contract.
The figure from the same period last year — the 35 days to September 30 — was $111 million, he said.
“We’ll close more than nine times what we did last year in dollar value,” he said. “Almost 10.”
Shane, who has worked in the Aspen market for 20 years and ranks among Real Trends’ top 20 agents nationwide, said the market had welcomed a huge influx of buyers since the onset of the pandemic, despite agents’ inability to show properties from March through May.
Craig Morris, a top Sotheby’s agent, said he’d had a similar experience in Aspen.
Where he generally has five to 10 properties under contract at a time, he has 24 right now, he said, and his 42 closings this year have already outpaced his yearly average of 30 to 35.
“It has become glaringly apparent that people have been moving from densely populated cities to an environment that provides open space,” Shane said.
“Even though we were unable to show property, if you were to look at Aspen-specific sales in 2020 from January 1 to date” — through August 25 — “we sold $916 million worth of real estate. In the same time frame last year, $647 million in sales. So even though we were unable to show for three months, there’s been a YTD increase of 30%.”
Zillow data shows that median list-price and sale-price numbers are up year-over-year in Denver and popular suburbs like Colorado Springs and Fort Collins. Price cuts and inventories for sale saw major drops in all three markets — inventories in Denver, Colorado Springs, and Fort Collins were down by 28.3%, 7.1%, and 18.2%.
UBS said in an August research note that it thinks the trend of “interstate migration to lower-cost, more tax-, business-, and regulatory-friendly states” is “structural in nature,” meaning permanent.
In short, people are moving to states a lot like Colorado.
The Rocky Mountain state is hot, especially with millennials
Denver is especially attractive to millennials, ranking second on a SmartAsset list, published in June, of the most popular cities for movers of that generation. It’s increasingly attractive to companies as well — the Silicon Valley firm Palantir Technologies relocated its headquarters to Denver from Palo Alto in August.
The Denver suburbs also boast one of the richest neighborhoods in the US; Cherry Hills Village was the only neighborhood not in New York or California to make the top five in Bloomberg’s annual ranking.
In December, US News & World Report said Colorado was the eighth-fastest-growing state. Census data released in May indicated that Denver ranked among the 15 cities with the largest numeric increase in population over the past decade (from April 1, 2010, to July 1, 2019).
Many millennials (and rich millennials in particular) have been flocking south and west over the past few years, and Colorado is a favorite spot.
Business Insider talked with eight 20- and 30-somethings who had moved to the Centennial State since April. They said they fell for Colorado’s charm for similar reasons: job opportunities, good weather, accessibility, and plenty of outdoor activities.
Turns out, Colorado is the epitome of what people want in a quarantine world.
Demand for Denver and its suburbs has skyrocketed and isn’t slowing down
Jessica Occean is one of these recent Denver transplants. The born-and-bred New Yorker told Business Insider that as she recently turned 30, her city needs and wants had changed.
“I wanted things that NYC just couldn’t offer, even on a $90,000 salary for a single, fiscally responsible person,” she said. “I wanted a good quality of life, space in my home, a less crowded existence — especially in my commute and general day-to-day — and access to the outdoors for some mental healing.”
But the pandemic sped it all up. She lost her job as a sales account executive in tech and was paying $2,000 a month for a fourth-floor walk-up apartment with roach problems.
“There was nothing to stay in NYC for,” she said.
But she also didn’t want to give up city life completely, or her career in the tech industry.
Denver “ticked so many boxes I needed in this stage of my life,” she said. She added that while she had never visited before making the move, the practicality of it — and the fact that her sister had just moved there — was enough for her to take the leap in June.
Now she’s living in a North Capitol Hill apartment that’s nearly $600 less a month for 300 more square feet than her New York apartment.
Dawn Raymond, a top Denver agent who’s been selling for 25 years, told Business Insider that the city’s market had been driven largely by out-of-towners moving in.
“I sold two places in the last month, sight unseen, to people from out of state,” she said. “In all of my years, I’ve not seen this type of demand.”
“Our new average-price home is just over $600,000,” she said — an average price point the city had not seen before. She also said market pricing had seen a 10% increase since just last year.
The Denver Metro Association of Realtors reported that average prices in Denver were up by a record amount in July. A local NBC affiliate, KUSA, reported in August that buyers in Denver closed on a record number of homes and condos in July while prices surged. (The median list price of Denver homes on Realtor.com is up 7.5% year-over-year, Norada Real Estate Investments said earlier this month.)
To accommodate demand, developers have been carving out new neighborhoods in suburbs, in places like nearby Summit County. According to data from REColorado, the state’s largest multiple listing service, this demand is behind the price surge: Single-family homes in the Denver metro area are increasingly scarce, and prices are being driven up because inventory can’t keep up.
“There are a lot of multiple-offer situations,” Raymond said, adding that buyers can and have written offers tens of thousands over the asking price and still found themselves outbid.
“People are coming in hundreds of thousands over ask to get these properties,” she said. “It’s not slowing down, because inventory is quite low. It’s a seller’s market.”
Raymond said many of her clients — many New Yorkers and Californians, and even some from cities in Washington state — were fleeing “hot spots.” She said she believes 2020 has given people time to rethink their focus and futures.
“It’s unprecedented,” she said. “Seasonally, it’s usually slow this time of year, but I’m not seeing that. Schools that are open have waiting lists.”
She added that the year has had a “dramatic real-estate impact.”
Resort towns are feeling the effects of the market too
Aspen has long been the leading light of Colorado’s many ski towns that cater to the ultrawealthy. The town has a famous “Billionaire Mountain” where the Bezos and Dell families own mansions and homes sell for as much as $49 million. And Mike Bloomberg, the former New York mayor, made a splash in April when he dropped $45 million on a ranch about an hour outside Aspen.
But Colorado has been a place that the ultrawealthy have called home (or second home) since long before the pandemic struck the US.
In a history of Aspen published in March 2003, Vanity Fair’s Mark Seal tracked its evolution over the past half-century from a hippie and celebrity haven to a billionaire magnet. Seal reported that a private plane landed or took off at Aspen’s airport every six minutes on 17 days of the year.
Several blockbuster real-estate listings and deals have made headlines in recent years, from the $279 million listing price of the Discovery Channel founder’s 8,700-acre property in Mesa County to the $18 million Aspen ranch that belonged to Walter Paepcke, considered one of the founding fathers of the town.
Another resort town, Vail, smashed its record for a property sale during the pandemic, with a $57 million sale in August that nearly doubled the high-water mark.
Telluride is yet another popular ski- and golf-resort town that has been fielding heavy demand despite a typically seasonal real-estate market.
Bill Fandel, who’s been a real-estate agent for 25 years, said the area’s inventory had shrunk to a 15-year low while his sales volume was up well over 100% since 2019.
“The average price has gone up dramatically in terms of both gross price point and also price per square foot,” he said. “The absorption rate is so outsized. In both our town and mountain village area, we have well under six months’ inventory, which is a big deal for a resort town.”
He added that “because of the hyperseasonality of a place like this, it’s remarkable.”
By August 1, Fandel had surpassed the $67 million in deals he closed in all of last year. In the last 35 days, he’s brought in $55 million under contract.
“It’s across all market segments,” he said.
“Prior to COVID, you would see activity in the immediate resort area,” he added. “Since COVID, there’s been a greater willingness to move outside the main hub of resort properties, and we’re absorbing vacant land at a pace we haven’t in 15 years’ time.”
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