A single property could tip the statistics from a bullish to a bearish month. “Let’s say we have two properties available and then we get another listing, well that’s a 50% increase” in available material, Setterfield continues. “It’s going to take a bit longer to know if there is a real downturn here or not.”
One thing’s for certain: if the market slows, it’s not because of higher mortgage rates.
In Estin’s published market summary, he writes that over 70% of Aspen’s property transactions are paid for with cash. And if they do take out a mortgage, Estin says, “they get very beneficial rates if they’re borrowing money based on their portfolios.” It’s a chance, he continues, “for bankers to do relationship building” by offering the very wealthy excellent terms.
Instead, Estin suggests, a slowdown could come “from macro-economic uncertainty.”
No Relief
Even if there is a slowdown, it’s no guarantee that Aspen will become a buyer’s market.
“I think we’re going to see a leveling off of the kinds of price increases we saw in the last two years,” says Banner, “but we knew those were unsustainable. I don’t think we’re going to see a major drop in prices.”
And should economic conditions get worse, eventually trickling up to the owners of $40 million homes, it could take a while to actually show up in asking prices.
“In 2008, the market stopped in Aspen, at least in terms of unit sales,” says Estin. “But prices continued to rise until the end of 2009, so if there's a slowdown now and history serves us, it’s likely not going to be as sudden a slowdown as buyers would like.”
This article was provided by Bloomberg News.