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George R. Harvey, Jr., Debbie Howard, Mike Owens
2009 REALTORS® Conference & Expo
San Diego, California
November 2009

Telluride Airport - Now Open!

Telluride Regional Airport Runway Improvement Update

Phase II reconstruction started on April 7th and was completed November 4th, 2009.

Phase II consisted of the removal of the existing runway and reducing the grades which resulted in the west end of the runway being lowered by 30 feet the center of the runway (dip error) was raised 16 feet, and the east end of the runway was lowered 14 feet. The result of this is a runway that now meets FAA standards. In addition, the safety areas west of the old dip area have been widened to 250 feet from 150 feet. We have also added all new runway lighting and extended the length of the runway to 6,911 feet.

Phase III we’re anticipating having completed in 2010 which will widen the remaining safety areas and add engineered material arresting system (EMASS).

For more information visit www.TellurideAirport.com

Have we found the bottom?

Yes: The average number of sales in San Miguel County for the first nine months of 2009 has been 20 sales per month; however, in August there were 30 sales and in September there were 28 sales. I am not including foreclosure sales at this point because they are a relatively small number of sales. Most of the foreclosure sales that have happened are coming back on the market to be resold.

The major question most Telluride brokers have now is whether the August and September spike in sales was a normal summer increase or a long-term trend. My personal guess is a little of both. We will know much better at the end of this year if the number of sales hold closer to 20 per month or 30 per month. My forecast is from now through the end of 2010 we will see the number of monthly sales gradually increasing.

No: We haven’t found the bottom for sellers. Unfortunately we still have a tremendous amount of inventory and roughly a 7-10 year supply of real estate in every category. As you will see on the attached spreadsheet the number of listings has remained fairly stable at a high level.

Maybe: The last half of the summer has generated some terrific buys for the astute purchaser. There is no question the number of showings has gone up significantly this summer compared to this last winter. Buyers are now looking for bargains and they are finding and purchasing some. If you’re a buyer you should be looking now. Even if you believe prices will continue to adjust that doesn’t mean you will find better purchases. Remember our buyers are smart, just like the sellers, and will be looking for the best buys first with the future buyers having the leftovers.

Conclusion: My conclusion about whether we have found the bottom depends if you are a real estate broker, a seller or a buyer. Each one’s perspective is different but generally speaking I think the discounts of 20-40% off of 2007 prices will continue to be seen through 2010 and inventory will start to sell at a faster rate.

P.S. Be sure to open the attachment for a specific area of interest. Feel free to call or email me for my Best Buys list. My cell is 970-729-0111.


Sincerely,

George R. Harvey, Jr.
Broker Associate

Telluride Properties

237 South Oak Street
Telluride, CO 81435

Located at the Telluride Gondola

Direct: 970-369-5373

Fax: 970-728-5407

www.TheHarveyTeam.net

CAR Inaugural Event

Telluride and the Second Homeowner

No other resort community in Colorado has benefited more from the support and involvement of the second homeowner than the Telluride community. Since 1981 when the 3% real estate transfer tax was initiated over $54 million has been paid into the Town of Telluride coffers. The majority has come from second homeowners. Not only have they paid the highest transfer tax of any resort in Colorado but also the highest building approval and governmental fees compared to any other resort. They pay the majority of our school taxes yet for the most part don’t have children enrolled here. They also helped pay for our library and most recently gave the significant majority of the donated money for the acquisition of the Valley Floor. Yet Telluride seems to have a love/hate relationship with the second homeowner. Many seem to resent their presence here. Some want to penalize them for not being here often enough. In other words, a home vacancy tax. Many of the second homeowners have become permanent residents of our community. They and our part-time residents support our sporting goods stores, our restaurants, our art galleries, our cultural events and volunteer for many of our non-profits. Without the second homeowner and major regional developers the Telluride Foundation would have never been created.

I am sad to say that Telluride has the lowest number of real estate sales year-to-date compared to any resort in the state of Colorado. While we have always loved being small, contained and remote, real estate has historically been a vital part of the economics of this community. Recently at the urging of several long-time locals the Telluride Town Council has initiated a new penalty fee for job creation in one of the most significant unemployment times in our history. Unemployment is on the rise in our community as well the U.S. and penalizing home builders for creating jobs seems to be exactly opposite of what the President of the United States is trying to do.

How high are our fees? Our real estate transfer tax is double Aspen’s, triple Vail’s and competes with 0% transfer tax in Breckenridge, Steamboat Springs and Durango. Some of the regular locals who attend the Town Council meetings while the rest of us are working would have you believe that we can continue to gouge the affluent with more fees that they won’t notice. Even some of our Town Council members have stated that publicly. In addition to these new fee suggestions are discussions by some locals to reduce the size of houses that can be built in Telluride and even tell people what kind of refrigerator, washer and dryer they can own. Where will it stop? Some have suggested that we need economic diversification and to the best of my knowledge the vast majority of the real estate community supports that idea. That would not only be good for the local economy but be good for real estate and give more second homeowners and part-time residents a reason to move here. However, I would like to point out that every other destination resort in the U.S. is trying to diversify and has been trying for the last 20-40 years. It is most difficult for destination resorts and far easier for resorts that are closer to metropolitan areas to diversify their economies.

Someone has to send a message to Town Council and the community at large that this clavier attitude that the town of Telluride can continue to tax, fee and permit our way out of this recession will kill the last bit of real estate economy that we have. The second homeowner still wants to come enjoy Telluride and many of them have begun to look at real estate again. If we kill the last remaining real estate fruit-bearing tree that we all have benefit from, it will be impossible for many of the local businesses to survive much less the Town of Telluride government to meet its bond issues and budgetary requirements in the coming years. In this person’s opinion our town government and many in our local community needs to change their attitude toward the second homeowner. We need to tell these important part-time members of our community that we appreciate them being here supporting our local businesses and charities. I propose that the current Mayor of Telluride write that letter with every member of Town Council signing it, have it published in both newspapers to be sure that the current second homeowners and future second homeowners know that they are welcomed and appreciated.

Lastly, we have got to be competitive in the resort industry in Colorado. We can’t continue to have the highest governmental entry fees no matter how beautiful Telluride is and no matter how much we love this place. We are now in the most serious economic times since the ski area opened in 1972. We have to change our attitude and start being more friendly, thankful and appreciative of the second homeowner who has helped create our wonderful public facilities and help pay for the great recreation that we all enjoy.

George Harvey
Local Realtor

San Miguel County Sales Activity through June 2009

BEST BUYER’S MARKET IN A DECADE

For 25 years I have listened to potential buyers say “I wish that I could have bought some property here a few years ago.” Now, buyers can purchase some properties at prices five years ago… and in some cases even better.

Here are the market stats for the first six months of 2009. See spreadsheet below.

BY THE NUMBERS

• 1750 - the # of listings in the Telluride MLS on 12/31/08
• 1715 - the # of listings in the Telluride MLS on 6/30/09
• 111 - the # of properties sold in the first 6 months of 2009
  
• 15 – the # of years that it will take to sell the current inventory, at the current rate
  
• 30% - the % of listings that dropped their price in 2008
• 35% - the % of listings that have dropped their price in the first 6 months of 2009
  
• 50% - the % of listings that are still priced at 2007 prices
• 1500 - the approximate # of 2009 listings that will still be for sale on 12/31/09 (85%)
  
  

COMMENTARY
In my 25 years in real estate in Telluride I have never seen a better time to be a buyer than now. Our market is comprised of 1700 different individual sellers who all have different motivations and different staying power. While I see our market unfortunately continuing at this slower pace for 6-12 more months, I do not see the buying opportunity getting any better than it is now. If you have questions about different market segments and different price ranges please review the spreadsheet of the major categories of real estate in our region to see their absorption rate. If you have specific questions about properties for sale or unique buying opportunities please contact me at george@tellurideproperties.com or 970-369-5373.

Sincerely,
George

Telluride Current Market Axioms

Sometimes, when things are just too confusing, you need to just remember a few simple thoughts. Here are some quotes, ideas and axioms that you will need to remember to get you through these economic times safely and profitably.

$19 trillion--The value of our country's real estate in 2008. In 1999, the value was $10 trillion, increasing to a whopping $22 trillion in 2006. The total amount of real estate doubled in seven years! It would seem that we really shouldn't complain.

Warren Buffett is the world's richest man---and the most successful investor in history. Here's Buffett's advice: Realize that markets always come back---they did after the Bear market in 1974, after the stock market crash of 1987, after the dot.com bust in 1990, and he bought in the 'down markets' everytime. Bad news is an investor's best friend. He is buying now!

"Where there is change, there is opportunity".

"Real Sellers....attract Real Buyers". Sell ahead of the market, don't follow it all the way down.

You make money on the buy, not the sell. If you're a seller, get what you can for your property now and buy the 'best buys' to make your profit.

A recession is a terrible thing to waste.

Focus on the above Axioms and adjust your sail in the middle of a storm. This is when fortunes are made.