Aspen Updates from Sally Shiekman

I was recently asked this question:
Why are mortgage rates rising when the Federal Reserve lowered interest rates? It’s a great question; understanding the answer can help you make more informed decisions when buying or selling property.

The key lies in how the Federal Reserve (the "Fed") influences the economy versus what determines mortgage rates.

The Fed and Its Tools

The Federal Reserve sets a target for the federal funds rate: the interest rate banks charge each other for overnight loans. When the Fed lowers this rate, it’s usually trying to stimulate economic growth by making borrowing cheaper.
This action affects short-term interest rates relatively quickly, like those on credit cards or personal loans. However, mortgage rates are long-term interest rates and behave differently because they depend on broader market forces.

What Drives Mortgage Rates?

Mortgage rates are closely tied to the yield on the 10-year Treasury bond. Investors consider these bonds a Quick read more or view full article safe alternative to riskier investments. When economic uncertainty grows, demand for Treasury bonds increases, pushing yields down and lowering mortgage rates. However, when the opposite occurs—such as expectations of inflation or strong economic growth—yields and mortgage rates tend to rise.

The Inflation Connection

Here’s the catch: When the Fed lowers rates, it often signals concerns about the economy, such as slowing growth or the risk of a recession. These lower rates are meant to boost spending and investment, which can spur economic recovery. However, if the market perceives that these actions might lead to higher inflation in the future, long-term rates like mortgages can go up. Lenders demand higher rates to offset the erosion of future returns caused by inflation.

The Role of Supply and Demand

Mortgage rates also depend on investor demand for mortgage-backed securities (MBS). If investors lose confidence in the bond market or fear inflation, they may sell off MBS, driving mortgage rates higher. Lower Fed rates can trigger such fears, creating a situation where mortgage rates rise despite the Fed’s efforts to ease borrowing costs.

Navigating This Paradox

This dynamic underscores the importance of timing and strategy for buyers and sellers in the Aspen real estate market. While lower Fed rates might suggest a more favorable borrowing environment, rising mortgage rates can quickly change the equation. Working with an experienced realtor who understands these trends can help you navigate these shifts effectively.

If you’re considering buying or selling in the Roaring Fork Valley, let me put my "Mountains of Experience" to work for you. Whether it’s understanding market trends or helping you craft a competitive offer, I’m here to guide you every step of the way.
  Read Less

The recent off-market sale of Patrick Dovigi’s Aspen mansion for $55,000,000, just months after he purchased it for $48,750,000, is another stunning example of the strength of Aspen’s real estate market. Even small changes can yield significant returns in a town where inventory is limited and demand remains at a high altitude. 

Dovigi, a former hockey player and entrepreneur, made only minimal updates to the property, including adding a bedroom, before flipping it for a $6.25 million profit between April and December of this year.

Located around the corner from my condo, I know this home well. It was originally built in 1975, renovated over the years and sold for $13,000,000 in 2018. Then, it was completely rebuilt in 2021. The home sold twice in 2024 and both were off-market sales. In April 2024, the nearly new home sold for $48,750,000 or $5,957/Sq.Ft., and in December 2024, Dovigi sold Quick read more or view full article it for $55,000,000 or $6,720/Sq.Ft. with an additional bedroom. To provide perspective, as of 11/30/24, single-family homes in downtown Aspen were selling for an average of $3,696/Sq.Ft.

It’s little wonder this transaction stands out. This practically new home is significantly larger than most homes in downtown Aspen; it’s sited on a large corner lot, on a quiet, dead-end street and has great mountain views. This type of short-term return is made possible by a scarcity of high-end inventory and a location that is hard to beat.

As someone privileged to live in this incredible valley, I take immense pride in helping others find their foothold here. Whether you’re a first-time buyer looking for a less expensive property in a prestigious neighborhood or a seasoned investor seeking to capitalize on Aspen’s booming and limited luxury market, the opportunities are extraordinary.

This sale also underscores a valuable axiom in real estate: owning in a highly desirable location provides access to long-term appreciation and lifestyle benefits that can’t be matched. Even properties that seem like stepping stones can become significant investments in markets like Aspen, Snowmass, and the Roaring Fork Valley. The down-valley town of Carbondale was recently honored by Forbes Magazine as the single top appreciating market in the country, with a stunning 20-year appreciation of over 460%!

The Roaring Fork Valley real estate market is as unique as its breathtaking landscapes, and with the proper guidance, your dream home—or next excellent investment—is within reach. If you are considering buying or selling in this fantastic market, let me put my Mountains of Experience to work for you. Read Less

Aspen Real Estate in 2024: Lower Interest Rates, Strong Demand & New Opportunities

As we wrap up 2024, there’s good news for the Aspen and Roaring Fork Valley real estate markets. With election uncertainties behind us and interest rates trending down, we’re seeing strong growth and exciting opportunities for buyers and sellers alike.

Lower Interest Rates = More Buying Power

With interest rates moving downward, buyers have newfound purchasing power. This means monthly mortgage payments are becoming more manageable, allowing buyers to explore properties that may have previously been out of reach. For first-time Aspen buyers, seasoned investors, and even those looking for a second home, this is a great moment to capture a unique property in one of the country's most beautiful areas.

2024 Market Trends: Robust Demand for Luxury Properties

The luxury market in Aspen and Snowmass Village remains incredibly resilient. According to the Q3 2024 Market Report Quick read more or view full article from Aspen Snowmass Sotheby’s, the total dollar sales volume is steady despite a slight dip in the number of properties sold. Aspen recorded an impressive $108 million sale in the third quarter alone—a clear sign that demand for premier properties is still solid.

Growing Appeal in Woody Creek, Basalt, and Carbondale. 

It’s not just Aspen and Snowmass Village that are seeing action. Our surrounding communities are also heating up. Woody Creek, for instance, saw its average sold price skyrocket by 159% compared to last year, underscoring its growing appeal for those seeking a blend of privacy and proximity to Aspen. Basalt has also become a hotspot, with a 10% increase in the average sold price per square foot. Forbes Magazine named Carbondale the number-one city in America for home appreciation over the last 20 years! Buyers are recognizing the value and charm of these communities, making now an ideal time for sellers to list in these sought-after areas.

What Does This Mean for Buyers and Sellers?

For buyers, these lower rates open up exciting options. You can afford more home for your budget, and in a competitive market like Aspen, this added flexibility can make a huge difference. For sellers, the increase in buyer interest—driven by both lower rates and strong demand—means there’s potential for competitive offers and quicker sales. Even if you’re not ready to sell right away, it’s worth having a conversation about your property’s value in today’s active market.
2024 is shaping up to be an exciting year for real estate in Aspen and the Roaring Fork Valley, with opportunities for buyers and sellers to make the most of these favorable conditions. If you’re considering buying or selling, let’s talk about navigating this dynamic market and achieving your real estate goals.

Call me, Sally Shiekman, at 970-948-7530, or visit SallyShiekman.com. Let me put my 'Mountains of Experience' to work for you!
P.S. If you would like a complimentary 2025 Aspen Wildlife Calendar, send me a text or an email with your contact information and mailing address and I will ensure that you receive one. 
  Read Less

Snowmass has long been synonymous with world-class skiing, but it’s so much more than that. As highlighted by a recent Wall Street Journal article, the luxury real estate market here has seen a significant surge, with high-end buyers flocking to the area for its breathtaking beauty, privacy, and seamless blend of modern design with natural surroundings. Snowmass is quickly becoming a hotspot for those seeking not just a home but a true mountain retreat.

According to the WSJ, one of the biggest draws to Snowmass is its relative calm compared to neighboring Aspen. Snowmass offers the same access to amenities but with a more laid-back, family-friendly vibe. The properties here, from sleek, contemporary estates to expansive ranch-style homes, offer panoramic views, cutting-edge architecture, and luxurious finishes. No wonder so many people are looking to invest in this mountain gem.

But it's not just the evolving homes—Snowmass is constantly improving. Quick read more or view full article With the Aspen Skiing Company investing heavily in upgrades, we’re seeing new lifts, expanded trails, and improved snowmaking capabilities, ensuring that Snowmass stays at the forefront of the ski world while prioritizing sustainability.

For those who love to ski and are interested in a brand-new condominium option, let me introduce you to Stratos, the last opportunity in Snowmass’s coveted Base Village. These 89 units, designed for those who want to experience the ultimate ski-in, ski-out lifestyle, offer a wide range of sizes and floor plans, from 2-bedroom residences to breathtaking 5-and 6-bedroom rooftop Sky Cabins. With two buildings offering unrivaled access to the slopes, Stratos is a truly exclusive opportunity. Reservations for Stratos will be accepted starting December 2024, so don’t miss this once-in-a-lifetime chance to be part of something truly special!

What I love most is that this community is perfect for all seasons. Whether you’re skiing in the winter, hiking in the summer, or simply soaking in the views year-round, there’s always something exciting to do. I’m thrilled about Snowmass's future and the endless opportunities it presents for residents and visitors alike. If you’re looking for luxury with a sense of adventure, Snowmass should be on your radar.

If you’d like to discuss real estate options in this vibrant community, give me a call, and let me put my Mountains of Experience to work helping you find your perfect mountain escape!
  Read Less

As a realtor for over three decades in Aspen and the Roaring Fork Valley, I’ve witnessed many changes in the local real estate landscape. One of this region's most remarkable growth stories has been in Carbondale, Colorado. What was once a quiet agricultural and mining town has become a booming hub for second-home owners, remote workers, and families seeking a laid-back mountain lifestyle.

According to a recent Forbes article, Carbondale’s growth over the past two decades is phenomenal. From 2004 to 2024, the median home value in Carbondale skyrocketed from $256,998 to over $1.44 million—a five-and-a-half-fold increase. This growth rate far outpaces the national median, which saw a 111.7% rise during the same period, as the U.S. median home value more than doubled from $170,603 to $361,676. These numbers highlight Carbondale’s standing as one of the hottest real estate markets in the country, which leads the Forbes list. Also on that list are Rifle, Quick read more or view full article Colorado, at #13, and Glenwood Springs, Colorado at #19. Even little-known Boone, Colorado, with a population of 306, made the list of 20 cities with the most significant home value appreciation over the last 20 years. 

Carbondale's transformation is closely tied to its proximity to Aspen. As Aspen grew, so did the surrounding towns, with Carbondale benefiting immensely from being just down the road. Once considered a "bedroom community" for Aspen workers and second-home owners, Carbondale has developed its own identity. Its artsy, eco-conscious vibe and strong sense of community make it a magnet for those seeking a mountain lifestyle without Aspen’s sky-high price tag.

What’s driving this growth? Carbondale has successfully balanced development with sustainability. Many buyers are drawn to the region for its outdoor amenities, thriving cultural scene, high quality of life and stunning views of Mt. Sopris. The town’s rise in home values reflects not just demand but also the influx of new services and amenities, and a strong tourism sector that has evolved in recent years.

For families and professionals, Carbondale offers excellent schools, a rich cultural heritage, and endless recreation opportunities. While its real estate market is proliferating, it still offers relative value compared to Aspen. Owner-occupied households in Carbondale have a median income of $133,333. While the town's median income of $92,083 is below what you might expect for an area with such high property values, it underscores the diversity of people who call it home.

If you’ve been considering Carbondale as a place to invest or relocate, now is a great time. With its rapid appreciation and growing appeal, Carbondale is no longer just a hidden gem—it's a thriving town with a bright future. I’ve been fortunate to work with buyers and sellers throughout this region for decades, and I’m always here to help guide you through your next real estate move.

Feel free to reach out if you have any questions about Carbondale or the Roaring Fork Valley market. With Carbondale’s upward trajectory, there’s never been a more exciting time to explore your options in this flourishing community.
  Read Less

The Federal Reserve's decision to cut interest rates by 0.5% in September 2024 marks the first interest rate cut since 2020 and a significant moment for the real estate market nationwide, including in Aspen, Snowmass, and the Roaring Fork Valley. While the effects may take some time to fully unfold, we can expect several vital impacts, particularly in a high-demand, luxury-driven market like ours.

1. Increased Buyer Confidence 
A rate cut generally brings a sense of optimism across the real estate market, and this one is no exception. With the Fed opting for a larger-than-expected reduction, buyers, particularly those in the mid to high-end price ranges, may feel more confident about entering the market or making their next move. Lower borrowing costs can make it more attractive to finance a home purchase, even in areas like the Roaring Fork Valley, where many luxury buyers pay with cash as opposed to obtaining financing. The psychological boost Quick read more or view full article from lower rates is likely to bring more activity to Aspen and the Roaring Fork Valley as prospective buyers see an advantage to purchasing now rather than waiting.

2. Potential for Increased Listings 
One of the challenges we've faced in the Roaring Fork Valley has been limited inventory, with homeowners reluctant to sell due to their locked-in low mortgage rates from prior years. With the Fed's rate cut signaling a shift towards more favorable financing conditions, we might see more homeowners willing to list their properties. This is good news for buyers and sellers, as it could help normalize the market and ease the upward pressure on prices.

3. Mid-Range Buyers Could Benefit Most 
While Aspen's ultra-luxury segment tends to be less affected by mortgage rate changes, the Fed’s cut could open doors for more mid-range buyers—those looking for primary homes or vacation properties in Snowmass, Basalt, or Carbondale. These buyers rely more heavily on financing, and their purchasing power increases as rates continue to decline. This could drive more transactions in this segment, bringing further balance to our local market.

4. A Boost for Local Development
Lower interest rates can also benefit developers, particularly those working on new residential and commercial projects. Financing costs for construction could drop, making it more feasible for developers to push forward on projects. For Aspen and Snowmass, where demand for both high-end homes and investment properties continues to grow, this could mean more new builds, further enhancing the vibrancy of our local economy.

5. Looking Ahead: What to Expect
While the immediate impact on mortgage rates may not be dramatic, experts anticipate that if the Fed follows through with more interest rate cuts later in the year, we should see a gradual reduction in mortgage rates. For those considering refinancing or purchasing property, this is an excellent time to stay informed and be prepared to act as conditions become even more favorable.

In summary, the Fed’s aggressive rate cut provides an opportunity for buyers and sellers in Aspen, Snowmass, and the Roaring Fork Valley. With improved financing conditions on the horizon, we expect increased market activity and a potential uptick in listings, making the coming months an exciting time for real estate.

If you or someone you know is interested in this fantastic market, please let me put my mountains of experience to work for you.

– Sally Shiekman Read Less

A successful lawsuit against the National Association of Realtors has shifted how commissions are represented in real estate purchase agreements. Here’s what you need to know.

Commissions: Up for Discussion?
Real estate commissions have never been set in stone. Traditionally, these commissions were paid by the seller upon closing and were split between the buyer's and seller's brokers. Factors such as the property's price, market conditions, the level of service, marketing efforts, and the agent’s expertise have always played a role in negotiating these fees. The recent changes in commission structure further emphasize the importance of negotiation, making it even more crucial for buyers and sellers.

The New Commission Structure
While contracts in every state may differ, in Colorado, there is now a clause in the contract that indicates who will pay the buyer’s broker’s compensation and how much the buyer’s broker will be compensated. It’s still possible to negotiate that the Quick read more or view full article seller pays the buyer’s broker’s commission. However, if the seller isn’t willing to compensate the buyer’s broker, this could affect buyers, especially those who can’t pay cash and need financing to purchase the property. If the buyer's broker's commission isn’t part of the deal and the buyer is obtaining financing, the buyer's broker’s commission cannot be rolled into the loan. As a result, buyers must come up with additional funds to pay their broker. This shift requires careful financial planning and a clear understanding of the transaction's nuances. For instance, negotiating a lower purchase price might allow buyers to cover their broker’s commission out-of-pocket, and cash offers that don’t require financing could streamline the process. 

Why Sellers Should Still Pay Both Commissions
Despite these changes, there is still a strategic advantage for most sellers to continue covering both the seller’s and the buyer’s broker’s compensation. Why? Because doing so incentivizes buyer’s brokers to show the property, increases the buyer pool for the property, makes the property more appealing, eases the financial burden on buyers and increases the likelihood of a quick and smooth sale. In a competitive market, this can be a crucial factor in attracting top-notch buyers.
Covering both commissions also simplifies the transaction process, sparing buyers the need to secure extra funds. This convenience can be a significant advantage in a market where ease of transaction can make all the difference.

The Bottom Line
The new commission structure introduces new financial considerations. Buyers may now need to budget for their broker's compensation separately, which could impact their purchasing power. Despite these changes, paying both commissions remains a reassuring approach that benefits both buyers and sellers, providing stability and clarity in these evolving times.

Navigating this new era of real estate requires staying informed and adaptable. With the right approach, these changes can be managed to your advantage. I strongly recommend seeking professional advice to understand and navigate these changes entirely. If you or someone you know is looking to buy or sell real estate in Aspen, Snowmass, or the Roaring Fork Valley, please contact me at 970-948-7530 and let me put my Mountains of Experience to work for you. Read Less

Concerns about a potential downturn in the real estate market are growing. Here’s a look at the key factors and predictions for the remaining 2024 year and how they compare to what's happening in Aspen.

National Perspective:

Interest rates and elections have a complex relationship. Historically, rates don’t consistently drop during election years, as the Federal Reserve bases its decisions on economic conditions rather than politics. For 2024, expected interest rate decreases have not yet occurred, affecting the broader market more than the luxury segment.

The National Association of Realtors (NAR) expects housing sales to increase by 13% in 2024, with existing home prices rising by 2.6% by August. Housing inventory remains low, 36% below pre-COVID levels, which could increase prices if interest rates don’t drop. High mortgage rates and slow inflation cooling have delayed potential rate cuts, adding to market challenges.

Experts overwhelmingly say that a housing market crash is unlikely in 2024. The lack of supply, a lingering effect of the last housing Quick read more or view full article crash, prevents prices from falling significantly. Mortgage rates are expected to fall this year as inflation continues to slow, and the Federal Reserve potentially eases its monetary policy. Lower rates make homeownership more affordable and stimulate market activity.

According to a recent report by Forbes Advisor, the challenging housing market has many would-be buyers wondering if home prices will ever go down. However, despite high mortgage rates and prices, home prices increased by 6.49% year-over-year in March 2024. Experts believe that a market crash remains unlikely unless there is a significant increase in supply or a major economic downturn.

In Colorado, Arizona, Texas, Florida, and Tennessee, which experienced a housing boom during the COVID-19 pandemic, the market is now seeing increasing inventory and price cuts. According to Reventure CEO Nick Gerli, up to 30% of the properties in this market are experiencing price cuts. This could signal a shift from a seller's market to a buyer's market in those regions.

Aspen Area Perspective

The luxury real estate market in Aspen is not just thriving; it's booming. High-net-worth individuals and investors continue to seek properties here, driven by Aspen's unique appeal as a premier destination for both winter and summer activities. Unlike the national market, Aspen's buyers are less affected by interest rate fluctuations and often pay with cash, a unique aspect that sets it apart.

Aspen faces a significant inventory shortage, with even more pronounced scarcity due to limited land for new developments and strict zoning regulations. This keeps prices high and competitive. While national home prices are expected to rise modestly, Aspen has seen more substantial increases due to its desirability and the influx of affluent buyers.

Preparing for Market Challenges

For buyers in Aspen, flexibility and understanding the market's competitive nature are crucial. Getting pre-approved for a mortgage can provide a competitive edge, even if it is not strictly necessary.

Sellers should maintain their homes well and work with local agents who understand Aspen's market dynamics. Pricing competitively based on current conditions and comparable properties will help attract serious buyers quickly.

In conclusion, navigating a potential real estate downturn requires staying informed and strategic. While national trends provide a broad overview, Aspen's unique market highlights the importance of localized insights. Buyers and sellers can make the best decisions in this complex landscape by leveraging expert analysis and staying attuned to national and local trends. If you or someone you know has real estate interest in Aspen, Snowmass, or the Roaring Fork Valley, please contact me, Sally Shiekman, at 970-948-7530 or visit me online at www.sallyshiekman.com. Your proactive approach can make a significant difference in this dynamic market. Read Less