For the first time ever, several towns actually saw a whole month with no action at all last month. In December there were exactly 0 sales in Basalt, Marble, Redstone and Woody creek. This anomaly is representative of the dormant market we are operating (or not) in. Under these circumstances every listing is geared toward the very top of the buyer’s pool, maintaining high prices. Here is the median price point for a single family home in the following towns:

Aspen: $11,795,000
Basalt: $2,200,000
Carbondale: $2,617,000
Glenwood Springs: $1,333,000 (!!)
New Castle: $581,250
Silt: $500,000
Rifle: $443,250

Disconnection with the buyer’s pool

With only a handful of sales, these numbers can come across as skewed. How do you interpret a median price calculated based on 2 sales? But the truth remains: these 2 sales will be the comparables used to price the next listing. After a house sells in Carbondale for $2.6 million, all the similar homes in that town will be worth just that. In a “normal” market where people transact in more “normal” volumes, you would get feedback from the market if your pricing was off. If it was listed too high, buyers would go for another house listed at a fair price. Without any competition, houses are priced for the most able and motivated buyers. The top 1% is setting the bar. Hence the feeling of “overpricing” and the objective unaffordability of homes right now.

Supply and demand always rule

So if the current price can only be sustained at today’s level of inventory, are we about to see it go down, as soon as there will be more listings?

Well, why would more homeowners decide to list their home? In today’s condition, most homeowners want to do everything they can to keep their real estate. After the last few years and the rapid appreciation we experienced, most of us homeowners feel like we are sitting on a gold mine, and we would rather keep mining it. That being said, some will have to sell because of personal life events or difficulties to afford keeping their home. Can most people afford to keep their real estate? Or will they have to sell?

Level of debt

One’s ability to keep their home depends on the cost of owning it. Most of us have very low mortgage rates locked in for the next 30 years, but there is more to the cost of owning a house than just the mortgage. Costs of maintenance, insurance and taxes are extremely high. Even more worrying is the financial situation that people are in outside of their real estate ownership.

Credit cards debts, auto loans and personal saving rates paint the picture of a consumer that is being squeezed after a few years of high inflation.

At the same time, employment is abundant and everybody seems to be able to service their debt despite its high level, and the high interest rate that goes with it. The US economy is still dynamic and seems to be allowing most people to sustain their spending habits, in a virtuous cycle. Even the Fed’s high rates don’t seem to affect that dynamic. So yes, even if most attendees left already, the party is still on!

Breakdown per town below: