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Aspen, Colorado, Has the Highest Entry Price in the U.S. for Luxury Homes

Nine homes sold for $9.6 million or more during the last quarter of 2017

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A five bedroom, seven-and-a-half bathroom home in Apsen, Colorado, currently on the market for $39.5 million.

ASPEN SNOWMASS SOTHEBY'S INTERNATIONAL REALTY
A five bedroom, seven-and-a-half bathroom home in Apsen, Colorado, currently on the market for $39.5 million.
ASPEN SNOWMASS SOTHEBY'S INTERNATIONAL REALTY

The luxury real estate market in Aspen, Colorado, is relatively small compared to popular U.S. metropolitan areas and beach towns, but the ski resort boasts the highest entry threshold for high-end properties across the country.

During the second quarter, nine homes were sold for $9.6 million and above, accounting for the top 10% of sales—the luxury segment in this area, according to a Douglas Elliman report released Thursday.

More:Aspen Home Sells For $24.4M, a 32% Discount

The luxury entry threshold is the highest among the 30-plus markets the Douglas Elliman tracks, according to Jonathan Miller, chief executive of real estate appraisal firm Miller Samuel, who prepares market reports for the national brokerage.

"Manhattan had an entry threshold of $4.8 million in the second quarter, meaning Aspen doubled the minimum-price requirement," Mr. Miller said.

By comparison, the top 10% of sales in the Hamptons, New York, had a starting point of $3.9 million, according to a Douglas Elliman report released also on Thursday.

The luxury sales, although still kept at a single digit at 9, was up 125% compared to the 4 from last year. The sales price increased 32.3% year-over-year to $14.88 million, while median sales price stood at $13.49 million, up 19.9% from a year ago.

In terms of price per square foot, a less volatile measurement than median sales price, the nine luxury homes in Aspen sold for $2,121 per square foot on average, increasing 60.3% from the same period last year.

More:A New Equestrian Estate Overlooking Aspen, Colorado

In the broader market, the median sales price in Aspen reached $2.6 million in the second quarter, up 84.7% from a year ago. Compared to the first quarter of this year, it rose 11.2%.

On average, a luxury home stayed on the market for 314 days, 83 days longer than the same period last year. But sellers made smaller concessions, discounting an average 9.1% off the asking price.

Aspen’s most expensive sale in the second quarter, a 9,613-square-foot five-bedroom home, closed for $30 million in April. The home came on the market in February 2016 for $42.5 million and later dropped its asking price to $39 million last December and to $36.5 million this February. The sales price represented a 29% discount from the original listing.

Aspen Luxury Market Snapshot in Q2 2017
Metrics Median home price Q-o-Q Y-o-Y
Average sales price $14.88M 25.7% 32.3%
Average price/sq ft $2,121 23.7% 60.3%
Median sales price $13.49M 92.7% 19.9%
# of sales 9 80% 125%
Days on market 314 25.6% 35.9%
Listing inventory 103 -15.6% 18.4%
Absorption rate 34.3 month -53.1% -47.5%
Entry threshold $9.6M 53.6% -7.2%
                            Source: Douglas Elliman

There were 103 luxury homes available for sale in the second quarter, 18.4% more than a year ago. At the current pace, it will take 34.3 months for the market to absorb the inventory, according to Mr. Miller.

"The Aspen market is moving much faster," he said, adding that the absorption rate there consistently stood at 49 months in the past five years.

In general, for the real estate market nationwide, a six-month absorption rate is considered a balanced market, but it changes drastically from market to market, Mr. Miller said. For example, Manhattan’s normal absorption rate is eight months while Aspen is more like nine to 12 months.  And luxury homes normally takes much longer to sell. "It’s a totally different animal," Mr. Miller said.