ABOR Market Update 2025 with Lawrence Yun & Randy Gold

Yesterday, I attended the Aspen Board of Realtors 2025 Market Update with NAR Economist Lawrence Yun and local Aspen Appraisal Group’s Randy Gold. It was a great event and a fun opportunity to network with our Roaring Fork Real Estate friends and gain some national and local market insights and predictions. I wanted to share my notes below with you. A few key takeaways for me are macro impacts, i.e., inflation, tariffs, and equity markets, and how that affects our local real estate market. We’ve always said that Aspen Real Estate often follows equities.

Randy Gold highlights changes ahead in local Pitkin County and City of Aspen restrictions, which are detailed below. It’s going to get harder to build bigger, and energy codes will further limit snow melt, pools, gas appliances, and heat tape. The gross square footage limit will probably decrease from 9,250 sq. ft. to 8,750 sq. ft. in 2025—making larger homes more valuable as they will be nearly impossible to create, other than vested properties like my Maroon Creek Lot 16 or Aspen Highlands Lot 13 opportunities. Significant changes are ahead, with TDRs going from 2,500 sq. ft. in Pitkin County to 500 sq. ft., which we will learn more about in the coming months. These proposed changes aren’t finalized and may be implemented later in 2025 or 2026, but they seem imminent. If you’re contemplating a project or expansion, don’t wait, or you may lose out or find the process much more difficult, expensive, and lengthy in the future.

2025 is off to a great start in the first quarter. Randy predicts a slower second half. I know supply remains tight, and demand continues. People want to be in Aspen Snowmass and acknowledge what locals have known forever: that it’s one of the great places on earth. We’re not immune to macroeconomic impacts, but we’re more insulated, and we typically feel them later and bounce back faster! Historically, Aspen Snowmass real estate has been a great investment in terms of quality of life and finances. Aspen Real Estate is as blue-chip as it gets and is a great hedge against current volatility. While we may see some short-term fluctuations, I wouldn’t bet against Aspen Snowmass long-term. I’ve yet to find a place with the quality of life, access, and recreational, culinary, and cultural opportunities that Aspen Snowmass affords. Please find my notes below from yesterday’s ABOR Luncheon. I hope this is helpful. I study the market every day; this is not a hobby for me. Call or email anytime if you’d like to dive deeper into our local market trends together. Have a fun weekend. Happy springtime! 

Chris Klug

Lawrence Yun – Chief NAR Economist

- Forecast dependent on jobs and mortgage rates

- Inventory availability

- 7.2% more jobs in Colorado compared to pre-Covid

- Mortgage Rates not behaving – 30-year fixed-rate mortgages. FED cuts rates in Sept., Nov., and December - but rates increased. Backfired as mortgage rates went higher. Not one-to-one between Fed cuts and mortgage rates. Mortgage rates move similarly to 10-year treasury rates.

- What drives 10-year treasury? Investors pulling out of equities and putting in treasuries.

- Jumbo mortgage rates are much more expensive, and no Government guarantee. Importance of Fannie and Freddie - Trump is a real estate developer and wants to see lower mortgage rates.

- Once consumer price inflation begins to come down - before more Fed rate cuts. If inflation comes down and the Fed cuts, mortgage rates can come down.

- What’s the prospect of falling inflation and falling mortgage rates: 

      - Tariffs - inflationary

      - Deregulation – disinflationary

      - Oil summit - disinflationary 

- Are we going to get to Mortgage rates at 5% or 4% - no

- National Debt at a record high. If government debt is high - there is less money in the private sector, and less mortgage money is available. Unless we can address the deficit - mortgage rates can’t go down deeply.

- Anything wasteful - we should be cheering for cutting.

- Deficient is unsustainable.

- Home sales nationwide Lawrence Yun expects 9% increase in 2025 and 13% in 2026

- Mortgage rates trending towards 6.5% in 2025 and 6% in 2026

- New home sales 11% in 2025 and 8% in 2026

- More jobs, more growth, lower mortgage rates, and more inventory in 2025.

Randy Gold:

Aspen-Snowmass Residential Market Overview

What happened in 2024 and What’s ahead in 2025

- 16,000 pieces of property in Pitkin County 

- 25-30% soft costs when building

- We’re going to see a lot more properties remodeled moving forward due to construction costs and timelines. 

- Assessments - probably won’t see as big of increases. The market hasn’t gone up as much as it did during the last period. Most property types will see increases.

- Changing land use code. 

- Community Growth Advisory Committee 

- Fall of 2023 first of those changes adopted

- Most of the recommendations were codified this year and will be implemented next year. 

- Maximum house size in the country reduced to 9,250 in 2024

- Next year when code changes outside UGB will drop to 8,750

- Basement exemption will drop to 1,000 from 4,000 sq. Ft. 

- 4-tiered system for approvals 

- Each tier will be more time-consuming, more difficult, and more expensive to encourage smaller houses

      - 3,250 or smaller easy

      - 3,250 - 5,750

      - 5,750 - 7,250

      - Over 7,250 most difficult

- Energy requirements: severely limiting 

- TDRs in the country are no longer going to be 2,500 sq. Ft. Will drop to 500 sq. Ft. 

- A new class of TDRs residential TDRs - reward long-time property owners in Pitkin County. You’ll be able to strip two TDRs from your property. Deed restricted, but able to sell. 

- Some flights to Aspen Real Estate with volatile equities, due to discretionary spending - people who feel less are waiting on Aspen Snowmass real estate purchases. A little more activity if the stock market corrects or continues, but it is not really going to change as we correlate with the stock market. 

- Market uncertainty. Layoffs, tariffs, 20-40% likelihood we are going into recession by Morgan Stanley and Goldman. 

- Randy predicts 2025 is going to be a good year but down compared to 2024 with possible slowing second half of 2025. 

- 2025 Randy Gold Forecast: 

      - Aspen Single-family fewer sales and dollar volume. Another strong year for sales over $10 and over $20 million. Most neighborhoods should see stable or modestly proving S/SF and values. 

      - Snowmass single-family: fewer sales and lower dollar volume. Stable to modest appreciation in most neighborhoods

      - Aspen lots: fewer sales and lower dollar volume

      - Snowmass lots: few sales, like modestly increased dollar volume

      - Aspen Condo/Townhouses: fewer sales and lower dollar volume compared to 2024. 

      - Snowmass Condo: fewer sales and much-reduced dollar volume. the average and median sale price

Market overall: Aspen Snowmass (Pitkin County) upward trend will reverse, largely in the second half of 2025. My forecast is for 650 - 800 transactions and $2.8B to $3.3B in dollar volume.