Pitkin County real estate values continue to increase
ASPEN, Colorado ” Bucking the trend once again, Pitkin County home values are not only holding steady, but they are rising.
That’s according to Cyberhomes, an online real estate information portal from Lender Processing Services (NYSE: LPS). Marty Frame, president of Cyberhomes, said median home values in Pitkin County showed an increase of 9.72 percent in February over the same month last year. The median home value in Pitkin County is $1,052,122, according to Cyberhomes.
“It’s counter cyclical to what you see out there,” Frame said.
Cyberhomes recently looked at nearly 2,000 counties across the country. Frame said 24 counties stood out ” areas where home values were holding steady or actually rising from a year ago. Pitkin County ranked fourth on the list, coming in behind Morgan County, Tenn.; Rock Island, Ill.; and St. Louis, Mo.
The company, which compiles and analyzes data for lenders, used property transfer figures to determine the rate of the increase.
Frame said some notable trends are happening behind the scenes in Pitkin County, and specifically Aspen. The first is that area property owners have one of the lowest mortgage delinquency rates in the country. Pitkin County’s rate is about 1.8 percent, whereas Colorado’s is 4.8 percent, and nationally, 7.2 percent of property owners are delinquent on their mortgages, Frame said.
Also notable is that Pitkin County ranks as one of the highest in the country for homeowners using “exotic” mortgages, which are nontraditional loans. They allow homeowners to be able to afford high-priced homes. Buyers are sometimes allowed to defer principal or interest payments to a later date. Those mortgages are historically risky for both the borrower and the lender, and have contributed to the housing meltdown experienced in places like California and Las Vegas.
Frame said 38.4 percent of all home loans in Pitkin County are exotic mortgages. That’s compared to 15.9 percent in Colorado and 19.6 percent nationally.
“You see people using leverage but so far they are making their payments,” he said, adding if conditions worsen, some local property owners could default. “There may be some declines ahead and heightened risk for them.”
Cyberhomes’ forecast for the next four quarters shows a 5.2 percent decline in home values around Pitkin County.
In February, the average home price in Aspen was $6.7 million; it was $1.9 million in Snowmass Village.
Brian Leasure, president of the Aspen Board of Realtors, said there are a few reasons why home values continue to rise in Pitkin County. The first is that a lot of properties that change hands are either heavily remodeled or replaced, creating a new product, which commands a higher price.
In addition, pre-sales are frequent and properties take longer to close on, Leasure added.
“It’s the strength of the sellers here,” he said, adding homeowners can hold out longer for a higher price. “We are dealing with a higher net individual.”
But more than anything, it’s the amenities and lifestyle that Pitkin County and Aspen offer that keeps property values strong here, he added.
“We have access to it all,” Leasure said.