More than $15 billion in property sales in 2020 in seven resort communities marks a 61% increase over 2019. Historic sales volume and sky-high prices are pushing locals out of mountain towns.
May 11, 2021
Brianna Anthony and her boyfriend, Keenan Montague, have lived in three homes over the past six months in Telluride. The five-bedroom house that the local bartenders rented with friends sold last fall, and the new owner, an East Coast doctor with a home in nearby Mountain Village, launched a major renovation. They moved into another house, which this spring sold — sight unseen — for $2.2 million. And they moved again as that owner began renovations.
They found a rental home in Rico, about 30 minutes away. And, yes, that house just sold. Now they are looking again for a place to rent.
“I feel like Telluride is becoming a community where locals are not welcome but the people who are there six weeks a year, they are welcomed,” Anthony said. “What happens when the only people in these ski towns are here for a month or so a year?”
When Anthony and Montague were living in a long-term rental home on the east side of Telluride last fall, they watched four long-term rental homes sell and get ripped down to studs as new owners renovated. The renters in those homes, some of whom lived in Telluride for decades, left town, they said.
“The culture is definitely changing in Telluride,” Anthony said. “I wonder if these new owners know the dramatic effect they are having.”
It’s not just Telluride. Across Colorado’s resort communities, a real estate frenzy is breaking records and transforming cultural landscapes. The record-setting pace of sales over the past year has turbo-charged a trend that has unfolded in recent years with more urban refugees relocating to mountain towns. This resort-home mania has happened before — and it didn’t end well.
In the few years leading up to 2007, mountain real estate brokers trumpeted their successes like a broken record. And, in fact, every month, quarter and year did break a record, thanks largely to loose lending that pushed ill-qualified buyers into homes with no money down and principal-only mortgage payments. When that lending fiasco fell apart, a yearslong recession and mighty crash in real estate values followed, leaving long-lasting impacts.
Last year’s real estate sales in Colorado’s high country looked eerly similar to 2007, with every month in the last half of the year setting sales volume and pricing records. More than $15 billion changed hands in property deals last year in eight resort counties, a historic 61% increase over 2019 despite a nearly three-month shutdown of all real estate activity. Land Title Guarantee Company reports show Eagle County with a 153% annual increase in sales volume in 2020. Pitkin County was up 129%. Sales in Telluride more than doubled, as did sales in Crested Butte.
Homes are selling sight unseen for highest-ever prices. Ultra-wealthy buyers, flush with 2020 stock market millions and the recognition they don’t need to be in an office, are flocking to mountain communities. Those who are not quite as rich are swarming into downvalley enclaves. Prices are at all-time highs while supplies of homes are at all-time lows. It’s a frenzy that leaves even the hardened longtime locals and brokers agape. And it’s forcing some locals to leave, which suggests that the real estate boom of 2020 in the high country could forever alter the cultural identities of mountain towns.
“It’s wrenching what’s happening in our communities,” said Amy Levek, executive director of Telluride’s Trust for Community Housing and a former mayor of the town, which has seen a mass migration of newcomers replacing longtime locals. “I don’t know of anywhere that isn’t saying, ‘What are we going through and what are we becoming?’”https://flo.uri.sh/visualisation/6062529/embed#?secret=elRZib42yC
Levek counts about 125 Telluride workers who have lost their rental housing in the past year because it sold. She talks about urban newcomers shopping for homes with a budget in the several millions. If they can’t buy, they are ready to rent for as much as $15,000 or more a month. That shift has left local employers struggling to find workers.
“There is a real shortage of people here right now,” Levek said, describing how the town of Telluride and San Miguel County are raising their subsidies for affordable housing to “obscene levels” to help offset the sudden spike in both homes and construction costs.
“I hate to be negative, but we are in a bad place,” she said. “The pace of change is so extreme. From month to month, we are seeing costs go up and our community change and our culture change, and it’s unsettling.”
Wealthy urban refugees spending big
The wealthy from big cities such as Chicago, New York, Miami and Dallas are driving some of the biggest shifts. In Eagle County in 2020, there were 83 deals for more than $5 million each, up from 40 in 2019. In Pitkin County, 51% of buyers were from out of state, marking the highest percentage of non-Colorado buyers in recent memory. The majority of out-of-state buyers in the Roaring Fork Valley came from Texas, followed by Florida, Canada and New York.
And those out-of-towners were dropping big dollars. In 2020, Pitkin County logged 106 deals for more than $10 million each, up from 27 in 2019.
And so far this year, homebuying in Pitkin County’s Aspen and Snowmass “has been off the charts,” said longtime Roaring Fork Valley broker Tim Estin.
From July to December, real estate records were set nearly every month in Aspen and Snowmass.
“A constant refrain last summer and fall was this can’t possibly sustain itself,” Estin said. “But at present, it is and even more.”