In 2023 we witnessed a year marked by both undeniable challenges and distinct opportunities. Through a year-end lens, the overarching narrative of Telluride is that area real estate values have largely returned to a rate of appreciation similar to pre-pandemic trends. The Town of Telluride, the Town of Mountain Village and the surrounding region concluded the year with $865.73 million in total sales volume across 445 transactions, translating into considerably higher dollars per incident of sale. While the year ended just 22% down in gross dollar sales, this still is the fourth highest grossing year in recent history. When compared to the prior five-year average, including the anomaly of the COVID buying frenzy for 2+ years, the total dollar volume has decreased only by 10% related to the prior 5-year average. Sellers were emboldened by scarcity and buyers naturally reacted with some hesitancy to the lack of inventory, in the face of global economic softening. However, the lack of inventory with steadily increasing demand has had a positive influence on real estate values. Once again, if one compares total gross dollar sales of the pre-pandemic (2019), dollar volume increased over 30% with 20% fewer sales.
There were a total of 50 sales exceeding $5 million. Among these, 12 surpassed the $10 million mark, with TREC’s 8121 Preserve Drive ($17.5 million) standing out as one of the most significant sales of the year. The Telluride market contributed $231 million (27%) to the annual sales within in county, while the Mountain Village market generated $440 million (51%) and the remaining county areas amassed $194 million (22%). The average overall sales price experienced a 2% increase from 2022 to 2023, reaching $1,945,000.
2024 begins with a sense of cautious optimism. While home prices will likely remain elevated, economists are optimistic that the federal funds rate, which tends to indirectly influence mortgage rates, will go down. The 2020-2021 housing market was possibly too hot and cooled off in 2023. However, several signs point to 2024 getting closer to ‘normal’. For the housing recovery to continue to occur, increasing inventories will ease the upward pressure on home prices. Rate reductions happening at a metered pace will also incrementally improve buyer optimism, even though the Telluride market is largely infused by cash transactions. Increased interest from investors and the continued desirability of the area are also continuing to attract buyers.
There is added value with new projects currently elevating the Telluride market. Luxury buyers in Telluride desirous of new high-end products are willing to pay the premium for them. The home-builder outlook is trending back up amid declining mortgage rates and inflating property values that more than offset building costs. Millennials entering their prime home-buying years and amassed financial wealth will also help sustain the market in 2024.
Multiple ultra-luxury projects are scheduled to commence in the Telluride area including the Four Seasons Hotel and Private Residences, Highline Residences in the Mountain Village, the Town of Telluride Hotel and Residences and a continued progression of single-family spec projects. These new development projects will offer an elevated level of luxury, together with pricing, that will keep Telluride’s values and desirability in line with competing resorts.
The Telluride region itself remains a desirable draw, boasting one of the most exclusive and community-centric areas for savvy investors. The demand is primed for acceleration which will most likely unlock more inventory among sellers who have waited on upgrading for their next purchase. Being geographically restricted in the box canyon, the maximum capacity of the area will only increase fractionally while keeping the Telluride lifestyle and standard of living desirable.
If you have any questions about the data presented here or how it relates to your real estate goals, don’t hesitate to reach out. We pride ourselves on having a pulse on the lifestyle, the Telluride market and surrounding region.