The year of 2020 was undoubtedly the wildest ride in the history of the Telluride real estate market. Strong January and February sales performances succumbed dramatically to Governor Polis’ shut down of all ski resorts across Colorado on March 14, 2020. With the onset of nationwide lockdowns due to COVID-19, the year was presumed lost. Properties under contract fell out. Sellers showed new motivation. April, May and June produced relatively few sales. Then the extraordinary happened. In early summer, demand for resort real estate rose to previously unseen levels. New buyers flooded into the Telluride region snatching up condos and homes at an unprecedented rate. When inventories of improved properties waned, buyers turned their attention to vacant land. A historic run on Telluride real estate commenced across all segments depleting inventories and pushing prices skyward.
Sales records were set across almost all segments, which ultimately produced the single highest performing year of all time for the Telluride region. Total sales volume for the segments covered in this report reached a staggering $950 million dollars, more than doubling the previous high of $460 million set in 2007.
Why did the pandemic cause a real estate boom? A number of compiling factors caused the real estate boom beginning in the summer of 2020. First and foremost, the pandemic sent people home into lockdown for more than 60 days. During the lockdown, people watched the news of the virus spreading through densely packed urban areas such as New York and Seattle, which made large cities feel unsafe. Simultaneous with the lockdown came highly publicized and sometimes violent protests in many large urban areas. Just as importantly, many people learned definitively during the lockdown that they could work virtually giving them the freedom to work from anywhere. All together, these conditions created a surge to get out of town to some place safe. These people turned en masse to remote resorts such as Telluride for sanctuary. Add six years of a strong economy and historically low interest rates, and the pandemic real estate boom was born.
First time homebuyers were not left behind. In the past 12 months, 47 locals became homeowners for the first time compared to 49 in 2019. The Telluride Association of Realtors (TAR) provided financial assistance to 34 of those buyers by awarding them grants totaling $52,250. Since its inception in June 2002, TAR’s First Time Homebuyer’s Assistance Fund has donated upwards of $720,967 to 775 individuals in the form of 529 grants. The program is funded by the majority of brokerages and individual Realtors in San Miguel County.
Impacts of this historic rush on real estate will be felt for many years to come. Low levels of inventory combined with continued high levels of demand are likely to push prices steadily higher for the foreseeable future, especially in the Town of Telluride, where there is little opportunity for greenfield development. I expect a step change in pricing perhaps as much as 25 percent over the next 18 months in some segments. Inventories will remain low and days on market will plummet. For the first time, the Telluride real estate market will behave like the hot urban markets in the country with properties routinely receiving multiple offers within days of coming on the market. Sellers will have the upper hand across most segments, and buyers must be ready to act quickly. Welcome to the new fast-paced world of Telluride real estate.