Luxury Real Estate

By Tim Estin of Mason Morse Real Estate

On 12/24/09, Colorado Public Radio interviewed Aspen real estate broker and blogger Tim Estin about recent trends in one of the wealthiest markets in the country. To listen to interview, click link: "Aspen Real Estate Goes Through Peaks and Valleys" .. (See CO Public Radio Dec. '09 schedule). This posting is derived from notes in preparation for that interview by Tim Estin mba, gri - Broker Associate/Mason Morse Real Estate Aspen.

National Economy

- Stock market UP +; National confidence UP +

- Not as scary as we thought it was. In Aspen, buyers are still spending a lot for the quality of product they’re getting

- Lots of good news, may be at or near bottom… Likely to be choppy moving forward

- Heard on news the other day markets have vastly improved in LA, SF and Las Vegas: over 50% of the inventory has been cleared out.

- Signs every month that market and conditions are improving

Aspen: Current Data

In Aspen, there’s been an uptick in sales activity due to an increase in marketplace confidence and comparatively from where prices have been. More negotiations are going on, less of a standoff between sellers and buyers, and prices are adjusting.

3 of last 4 months (July, Aug, Oct) were better than 2008, ending a string of 21 months of year over year declines (Pitkin co/Land Title)

Aspen single family home avg price year-to-date (YTD) is basically unchanged from 2008 at $6.1M. But the averages have been skewed by some very high priced and notable sales in 2009 (esp. $43M Willoughby Way, Red Mountain Aspen home sale)

Aspen residential sales Aug 1- Nov 30th (these 4 mos compared to same period 2008)

• Closed sales transactions +26%

• Under contracts +94% (MLS)…under contracts/Pending are an indicator of future activity

This yr sales high end sales stats:

• $7.5M and above: 23 sales in 09 YTD; 28 last year

$8M+ and above, this year 19, 25 last year;

• $9M and above, 15 this year, 17 last year.

Aspen still has sellers who want to sell in this market, and some are still happy – content? – if they bought before the peak and are relieved to have negotiating room and be able to sell.

Average sales price are “holding” but new expensive property sales have distorted the average and median prices.

The Aspen average home sale price:

2008 = $6.2M

2009= $6.1M

But values are dropping as witnessed with Median price stats.

Median prices: (better indicator because averages get so skewed by very high priced sales)

2008 = $5.8M

2009 = $4.76M (-18%)

Market wide volume and dollar sales decrease (Land Title):

2007 = $2.2B

2008 = $1.3B (-50%)

2009 = $1.07B (-18%)

There has been significant listing price erosion led by builder/developers who want out of brand new properties at approximate range of $800-$1100 sq. ft.

But in Aspen, buyers are still spending a lot for the quality of product they’re getting

What’s Selling?

Anything new, recently remodeled totally pressed out, and great values. Fundamentally, buyers are looking for value. How do they judge value? It’s a combination of BEST QUALITY AT THE BEST PRICE …high quality, high grade properties, A-Grade stuff, AAA locations. These are selling at strong numbers or at great deals.

In this buyers market, shoppers are looking for quality and value. For middle of the road properties, it’s been difficult and really tough. Pricing correctly is the single most important element to a successful listing. If one doesn't have to sell, don't; if one does, be realistic...do not be as the 11/23/09 New York Observer article stated, "The Last Swaggerers: Hearty Bunch of Sellers Price Like it 2007".

Foreclosures

We still have foreclosures: this year in Pitkin County = 105 vs 35 last year. It is the most in 24 years according to a recent Aspen Times article. ..(the average is 40 per year). A big question mark is how deep the pool of distressed sellers is. National media indicates high end distress and foreclosures is a growing problem monthly (See 01/03/10 Denver Post and see 12/18/09 WSJ and 12/29/09 WSJ in the Aspen Real Estate Archives Section on this site), even as the lower end appears to be recovering albeit at vastly lower prices. The downturn is more severe than any we have ever experienced in our lifetimes.

Fractionals: Residences at the Little Nell (RLN) and Dancing Bear (DB)

RLN has been unfairly judged by their immediate and unsurpassed sales success out of the gate, when they started selling in summer 2006. By Sept 2009, they were 98% sold out, an unbelievable success. Offering prices doubled. Then fall 2009 hit and contracted buyers bailed.

Fact: they are almost 50% sold out now. The project opened opened in Feb 2009. The fractional industry in general forecasts selling out within18-24 months after opening, so many regard the RLN sales as still a success, but regretably it falls short of unrealistic expectations when compared to their sales boom of 2006-2008.

The product has always been about LIFESTYLE, not investment. It got skewed towards the investment side as offering prices increased, something a lot of buyers chose to overlook in past 3 years of wild “paper appreciation”. One thing is clear: if one wants to enjoy/own perhaps the ultimate Aspen ski-in/ski-out luxury experience, RLN and Dancing Bear (an in-town boutique experience that is a lower cost alternative to RLN but without ski-in/out) are the way to go.

Owners reputedly love the RLN product: its location at the ski epicenter of the “world” and level of service and amenities are simply unmatched and incomparable. Yes, I am a fan, financing for their product is now available. Call or email me directly for info, 970-920-7387.

Total Aspen Snowmass Fractional Statistics (Land Title)

- Oct 2009 = +101% to $11.9M from Oct 2008

- 2009 YTD = total fractional dollar sales are $173.8M, +314% from same time last year.

- Units Sold = 246 sold units, + 27% over same time 2008.

Future: where are we headed?

2010 is likely to be similar to 2009. I am cautiously optimistic: There will be some great deals, there will be some properties selling for very big $ numbers, importantly the number of transactions are increasing.

We know that in all price ranges we may not have reached bottom and that it cuts across the board and depends on the property, seller circumstances, motivations, etc.

Aspen is like a lot of places throughout the country. The real estate values and economy were not immune to global and national declines, Yes, some businesses failed but new ones are coming in here. We have new restaurants art galleries and retailers opening regularly.

But Aspen is NOT just about Real Estate: we are a four season destination resort offering unmatched recreational, arts and cultural amenities and that's what's going to pull us through all this.

Aspen Ski Co is a private family owned company that continues to invest in the quality of the ski experience. It’s put in approx.$130MM in past 6 yrs in capital improvements. This year it’s maintaining the same level of guest services as last year (staffing and hours of operation on or near mountain).

Even though inventory of properties for sale has swelled, there is still relatively little product available in Pitkin County. 92% of the land surrounding us is publically owned( USFS, BLM, Open Space and conserved land).

Bottom line: there’s only one Aspen - think sports, arts and culture offerings: short term, yes there are challenges and businesses will be choppy because as mentioned, we have found we are not immune from national and global economic events as previously thought. Aspen offers a small town community with world class amenities within a highly restrictive zoning environment that for the past 40 years has has successfully protected its unique beauty and historic charm. There is every reason to believe that in an over-crowded and somewhat homogenous resort fair, Aspen's unique attributes will be in ever-increasing demand in the future.

Buyer Opportunities

1. The best deals are on properties in which there is significant financial stress on sellers. These are new development projects, spec homes, property owners who bought at peak and may be highly leveraged, where loan pressure is motivating a sale. Buyers are looking for quality at the best price and these new build and remodel projects being sold by motivated sellers represent excellent quality at historically reduced prices.

Read: The Estin Report interview in 11/16/09 Aspen Daily News

2. Ability to obtain beautiful and unique homes seldom available. This is an uncommon period in which buyers can obtain Grade AAA properties in stellar locations - the Best Properties - and/or with unique circumstances that cannot be reproduced and are irreplaceable due to changes in Pitkin County land use codes.

3. Window for Buyers: Great Quality/Great Price = Great “Deals” will be gone before one knows it...by the time one does, it's too late.

There is a “window” of opportunity for buyers to purchase quality and uniqueness at the best price = Great Values. But the inventory of buyer opportunities suggested above are finite and limited. When they’re gone, they’re gone and buyers will have less high quality choices. Even though prices may still be down, the quality of what is available will be less. The Great Quality/Great Price =Great “Deals” will be gone.

For those market timers, one will not know or see the turn in the market until it has already occurred.

Why Care about Aspen Real Estate?

Aspen real estate is probably more interesting from a human interest point of view than real estate specific interest. Of course it’s always interesting to hear about the wealthy and what’s happening on their lives. It makes most regular mortals feel better, I guess.

But what happens in Aspen is certainly important for the Roaring Fork Valley …ripples in the pond theory: what happens here creates waves as one travels down-valley. The closer to Aspen, the higher the real estate prices, the greater the economic impacts. A lot of people who work in Aspen or own businesses here live outside the immediate area, so their jobs and businesses and livelihood depend on the Aspen economy.

Other than that, probably no reason for the national media to really care. But they do. Our market is watched, and people do appear to be paying attention.

Disclaimer: The statements made in The Estin Report represent the opinions of the author and should not be relied upon to make real estate decisions. Information concerning particular real estate opportunities can be requested from Tim Estin at 970.920.7387 or at testin@masonmorse.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it . A potential buyer is advised to make an independent investigation of the market and of each property before deciding to purchase. To the extent the statements made herein report facts or conclusions taken from other sources, the information is believed by the author to be reliable. However, the author makes no guarantee concerning the accuracy of the facts and conclusions reported herein. For reproduction use of any parts of The Estin Report, the author requests direct attribution to him as, "By Tim Estin, The Estin Report, at www.EstinAspen.com" or please contact him directly. All rights are reserved and the articles and blog posts are copyrighted.

By Jean-Yves Piton

LuxuryRealEstate.com is proud to introduce our new member in Switzerland.

As a leading luxury real estate company in Geneva, Switzerland, PRAEMIUM Immobilier specializes in brokerage (sales and rentals), property management and property renovations. PRAEMIUM Immobilier’s portfolio is constituted of residential and commercial properties, to include apartments, villas, hotels, buildings and plots.

As a market and real estate expert, PRAEMIUM Immobilier understands how to deliver personalized services to its international clients. PRAEMIUM Immobilier thoroughly handles the marketing process of its properties with the utmost discretion requested by property owners and buyers. Agreeably, PRAEMIUM Immobilier assumes the complete responsibility of locating the best market/investment opportunity to fit its clients’ short and long-term needs.

PRAEMIUM Immobilier also goes above and beyond the traditional services provided by real estate firms by handling property renovations. From start to finish, PRAEMIUM Immobilier works hand-in-hand with property owners and contacted companies (business relationships with contractors, business quotations, comparisons, control and monitoring of building works) to ensure renovation needs are successfully achieved.

For more information regarding PRAEMIUM Immobilier’s portfolio of luxury properties, please feel free to visit http://www.praemium.ch and/or contact Mr. Stephane GRIS (Director) at info@praemium.ch.

About Who’s Who in Luxury Real Estate:

Who’s Who in Luxury Real Estate is an invitation only network representing the best luxury real estate firms and professionals from around the world. Each affiliated member is carefully selected to represent his/her market area. Who’s Who in Luxury Real Estate also hosts the industry leading Website www.LuxuryRealEstate.com (a 2009 Webby Award Honoree).

Courtesy of: Peter Linsey of Summit Sotheby's International Realty

By: Andrew Kirk, of the Park Record

Management calls it one of the most 'grand' of the luxury brand

One of the most anticipated moments of the winter occurred Friday morning when the ribbon was cut on the St. Regis Deer Crest hotel ushering in a new era in which Park City is expected to have a higher profile and greater exposure among the most wealthy vacationers from the Northeast.

Michael Zaccaro, managing partner of the ownership group Deer Crest Janna, said the vision for an internationally-recognized, five-star-brand hotel was inspired by the site itself.

Perched above and to the east of the base of Deer Valley Resort, the site is adjacent to one of the ski runs in the private community of Deer Crest. From below the site can only be seen from a particular angle near the south tip of Jordanelle Reservoir.

With ski-in, ski-out access, incredible views of the Wasatch Back, situated in one of Park City's most upscale communities adjacent to a resort repeatedly voted No. 1 in America by affluent skiers, something like a St. Regis was the only thing deserving of the site, Zaccaro explained Thursday. The ownership group in conjunction with the developers, Stan Castleton and DDRM, chose Starwood Hotels' St. Regis brand because of the large and loyal following it has among elite travelers especially those in the Northeast.

General Manager Michael Hatzfeld said St. Regis is excited to be in Park City because being at the best addresses in the best destinations is core to its values. Deer Crest and Deer Valley is one of those addresses and Park City is one of those destinations.The St. Regis in Aspen, Colo. has been "an iconic ski destination" for the company, but it isn't ski-in, ski-out. Furthermore, the summer activities in Park City are superior to those in Aspen, he said."It's not just a focus on the three or four months of ski season, but the summer months can bring Fortune 500 companies to these destinations," he said.

So as not to overload Deer Crest with traffic, most guests and visitors are brought to the hotel by a funicular starting near the Deer Valley parking lot. A gondola just wouldn't have done, Zaccaro said. The smooth, roomy and unique experience the funicular ride provides is the perfect introduction to the hotel. It was a focal point in the planning process, he said. "It's not that much different than an elevator but far more spectacular," he said. It is the first commercial funicular in the United States, holds 15 people plus luggage and is a 90 second ride that is touted as energy efficient. The views are expansive as well. "Nothing else has the same impact," he said.

Zaccaro said the condominium-hotel industry was "given a black eye" by the start of the recession, but said the financial structure of the hotel is incredibly sound. The committed buyers are closing at a rate that has soothed fears, he explained. At the ribbon cutting, Hatzfeld and Starwood senior vice president of operations Carla Murray both said they had been general managers at the Aspen location and both agreed St. Regis Deer Crest was "a little grander." "This is by far the most spectacular and interesting (St. Regis) I've had the privilege to run in my career," Hatzfeld said. "Count on us," Murray said during her remarks. "We plan to be an active member of this community." Lt. Gov. Greg Bell addressed the crowd at Friday's ceremony and said he considered the hotel to be one of the country's most amazing structures. Conceptually, legally, financially and structurally it is a "remarkable" feat, he said, and called its completion despite the recession "miraculous."

As the hotel and its three competitors (Dakota Mountain Lodge, Stein Eriksen Lodge and The Montage) create more world-class amenities it will garner greater world-wide recognition, Zaccaro said adding, all four hotels are "looking forward to working with each other."

By Jean-Yves Piton

LuxuryRealEstate.com is proud to introduce our new member in Turkey.

Vartur Real Estate was first established by Seref Varli in 1987. Vartur Real Estate was one of the first qualified international real estate companies on the Mediterranean side of Turkey. Vartur Real Estate is differentiated by its V.I.P. and property management services.

While Vartur Real Estate’s successful network of representatives supports the company’s property portfolio, it also owns more than 20 real estate websites in Turkey. Vartur Real Estate’s extensive property portfolio includes apartments, condos, villas, mansions, estates, hotels, restaurants, commercial buildings, and lands.

For more information regarding Vartur Real Estate’s portfolio of luxury properties, please feel free to visit http://www.vartur.com and/or contact Mr. Dogan Nadi Varli (International Sales Manager) at info@vartur.com.

About Who’s Who in Luxury Real Estate:

Who’s Who in Luxury Real Estate is an invitation only network representing the best luxury real estate firms and professionals from around the world. Each affiliated member is carefully selected to represent his/her market area. Who’s Who in Luxury Real Estate also hosts the industry leading Website www.LuxuryRealEstate.com (a 2009 Webby Award Honoree).

By Jean-Yves Piton

LuxuryRealEstate.com is proud to introduce our new member in the Dominican Republic.

Established since 2005, Always Sun Investments is a comprehensive expert for luxury real estate in Las Terrenas, Las Galeras, Sanchez, Cabrera and other parts in the Dominican Republic such as Punta Cana and Cap Cana and at the North coast Puerto Plata, Sosua and Cabarete. Always Sun Investments offers a complete portfolio of investment opportunities, ranging from luxury properties for sale and for rent, lands for sale, new luxury communities, to architectural and construction services. With a multilingual team (English, Dutch, French, German and Spanish), Always Sun Investments is dedicated to fulfill the needs and dreams of its international clients.

For more information regarding Always Sun Investments’ portfolio of luxury properties, please feel free to visit http://www.altijdzon.nl and/or contact Mr. Tony van der Heijden (Owner / Broker) at tonydomrep@gmail.com.

About Who’s Who in Luxury Real Estate:

Who’s Who in Luxury Real Estate is an invitation only network representing the best luxury real estate firms and professionals from around the world. Each affiliated member is carefully selected to represent his/her market area. Who’s Who in Luxury Real Estate also hosts the industry leading Website www.LuxuryRealEstate.com (a 2009 Webby Award Honoree).

Courtesy of Terry Spice of RE/MAX High Country Realty, New Zealand

Changes to New Zealand business migration laws, due to take effect at the end of November, is good news for those seeking residency in New Zealand.

Reported in the New Zealand Herald, more than 12,000 people have registered their interest under the new Entrepreneur Plus immigration category, which offers a fast track to residency for those who invest $500,000NZD in their NZ business and create three fulltime jobs.

The Investor category offers residency to applicants looking to invest and maintain $1.5M NZD to $10M NZD in New Zealand over three to four years. Immigration NZ lists their five preferred areas of investment as: existing business, commercial or investment property, education and training, professional, scientific and technical services and tourism.

These new immigration policies offer a wonderful opportunity for those seriously looking to expand their portfolios in a secondary country of residence. Investing in New Zealand offers financial benefits such as: No capital gains tax, no financial transfer tax, generous depreciation rates and no wealth or death duty.

For further information or discussion contact:

@: terry.spice@highcountryrealty.co.nz I t: +64 21 755889

By Carina de Sousa of IRG International Realty Group

The European Real Estate Network is the only truly pan-European network of independent, top quality, boutique brokerage companies. It brings together their considerable expertise, international contacts and resources to the benefit of their clients, be they buyers, sellers, investors or developers. The network is an international platform at the highest level for the acquisition, marketing and sale of premium real estate.

Bi-annually the European Real Estate Network issues a market update for luxury residential tourism in Europe.

In general summertime has seen slight confidence coming back to the property market. Although the lower end markets have been hit severely, the high end residential tourism market remained steady throughout and especially in “isolated pockets” throughout Europe. In these areas sales have been steady and ongoing although often fuelled by realistic pricing or accepted offers.

From September 2008 to June 2009 all affiliates have seen a decrease in sales for the luxury residential market. Inquiries still kept coming in but were for 50% not serious inquiries or are still in the sales pipeline.

Our affiliate in Austria, Peter Marschall from Marschall Immobilien is not sure if the bottom of the financial crisis has been reached and expects the prices to go down slightly.

Though in Switzerland both affiliates, WETAG Consulting and CGI Immobilier have signaled that prices

remained steady and in the Lake Geneva area there has even been an increase due to the large demand and limited offer of real estate. For Wetag Consulting that is covering Ticino with its lakes, Lago Maggiore and Lago di Lugano, parts of Graubünden, the Italian side of Lago Maggiore and Lago di Lugano as well as some parts of Lago di Como, and 80% of the buyers are international, namely from Germany, Italy, The Netherland and United Kingdom. Due to the changed tax laws in Switzerland foreigners have a great advantage to buy.

By Ron & Alexandra Siegel of Napa Consultants, International

Most vacation home buyers associate the island lifestyle with white sand beaches, tropical climate and also the escape from civilization. For those of you who would rather immerse yourselves in an island experience that is also rich in history and culture with year-round temperate climate, consider the Mediterranean island country of Malta for your next home.

Centrally located at the very heart of the Mediterranean Sea, just below Sicily, Malta is easily accessible from all major European and North African cites. A member of the European Union, Malta, with its relatively low cost of living, genuinely friendly people who speak English as one of two official languages, is politically stable, and is also one of the safest places in the area.

For sports enthusiasts, Malta has it all, from country club sports such as golf, tennis and squash, to water sports including world class scuba diving, water skiing, windsurfing and sailing, to mountain biking and hiking among ancient ruins. The variety of cultural experiences such as a carnival that dates back to the 16^th century, the world’s most successful Kung Fu show, music, dance and theatrical events, set Malta apart, not just as a wonderful island to visit, but also great place to live.

Malta also enjoys a stable property market with outstanding tax advantages for foreign buyers. An exemplary Maltese property currently on market is an impressive castle built in the early 1900’s. It is one of the architectural jewels of Rabat in Malta the other major island of the Maltese archipelago. The castle lies at the edge of an elevated plateau with spectacular 360 degree views from all four towers. It is surrounded by approximately 13,500 square meters of beautifully landscaped gardens and is enclosed within high protective walls. Complimenting this castle is a beautiful private chapel—the Rotunda church of St. Maria—that can be seen from miles away.

According to Carl Peralta of 77 Great Estates, “Malta is the Mediterranean’s best kept secret; why wouldn’t someone like living in Malta? It is safe & small therefore proximity to beaches & work/schools is an advantage. Everyone speaks English and schools including University enjoy an extremely high level of education ideal for kids. Foreigners find it easy to purchase real estate in Malta”

To learn more about the Castle and other extraordinary Maltese properties, plus the tax advantages of owning a second home in Malta, contact Carl Peralta: carl@77GreatEstates.com .

Carl Peralta is a member of the LOL Team of Experts & Discussion Leaders. Please introduce yourself to Carl and comment on his discussion at LOL on Linked In.

By Maureen Buckley of Buckley & Buckley Real Estate

Barefoot Contessa Ina Garten gives you a private tour of The Kitchen of the Year, that has been in the process over 6 months. Learn about the Kitchen Triangle, what is the best sink, why she uses open cupboards and best of all, put two comfortable chairs in the kitchen!!