Since establishing the ski resort 50 years ago, Telluride's real estate market has experienced a consistent and well-regulated growth pattern marked by occasional fluctuations. With the exception of the Great Recession, the market has demonstrated remarkable resilience. During its pandemic era, the interplay between constrained supply and a swiftly expanding demand precipitated an impressive nearly 100% appreciation in property values within the most coveted sections of Telluride and Mountain Village.
As we step into 2023, we're observing a transition to a more balanced market. However, it is noteworthy that average sale prices have maintained their upward trajectory relative to 2022, boasting a 13% escalation in Telluride and a 25% surge in Mountain Village. This indicates a continuing trend of value appreciation in these real estate markets with no sign of distressed selling.
Like many other communities, the construction cost has almost overtaken property values, making it increasingly challenging to undertake speculative projects or construct new residences for end-users. Those costs, combined with severely increasing fees on building permits in certain unincorporated areas of San Miguel County, have caused a diminishing demand for single-family land and renovation projects. Consequently, there has been a growing demand for newer, turnkey properties. Affluent buyers are more than willing to pay premiums for their preferences, which include high-end features like oxygenated bedrooms, single-level floor plans, air conditioning, and extensive floor-to-ceiling windows.
The recent approvals of the Four Seasons and Six Senses Hotels in Mountain Village represent the next phase in the lifestyle that Telluride has been pursuing for years. The Four Seasons is poised to elevate the overall quality, influencing property values and visitor experiences.
Inventory levels in the Town of Telluride continue to linger at a staggering 50% below pre-Covid (normal) levels, while Mountain Village faces an even more substantial 60% decrease. In the context of year-to-date statistics for 2023, the dollar volume has surged by 6% compared to the five-year average, with Mountain Village claiming a substantial 51% market share, overshadowing the Town of Telluride, which stands at 28%.
This marks the first time since 2006 that Mountain Village has outperformed the Town of Telluride in terms of dollar volume, underscoring the growing equilibrium in our real estate market. As history has shown, these two towns tend to balance each other out – when one market heats up, it bolsters the perceived value of the other. During the Great Recession, the Town of Telluride managed to maintain and recover its value more swiftly due to a demographic focus on the convenience it offered over Mountain Village. However, recent trends indicate a shift in buyer preferences towards the value proposition presented by Mountain Village, as well as a growing demand for privacy and more spacious, modern properties.
