By Mark Gilbert March 2 (Bloomberg) -- A U.S. housing-market slump is ``thesingle largest downside risk to the 2007 economic outlook,'' saysDavid Rosenberg, the chief economist for North America at MerrillLynch & Co. in New York. Paul Ashworth at Capital Economics Ltd. inLondon calls it ``arguably the biggest risk to the U.S. economicoutlook over the next couple of years.'' Figures this week showed the supply of unsold U.S. homes atits highest level since 1998, with 2.91 million houses available inJanuary. Sales of previously owned dwellings fell 2.8 percent to anannual rate of 6.56 million, according to the National Associationof Realtors. If the U.S. real-estate bubble is about to burst, no one hastold Aspen, a former silver-mining town in Colorado. Aspen is luckyenough to have the altitude, climate and slopes to have transformeditself into one of the world's ritziest resorts since the firstskiers were transported up Aspen Mountain in 1947.
On a small plot of land behind Carol Blomquist's nine-unitchalet, builders are nailing planks to a new home that's on themarket for $9 million. Across the street, digging machines aredriving in the foundations for two new townhouses, one of which isbeing marketed at $8 million, the second a relative bargain at $6million. Blomquist, who has just a couple of part-timers helpingher, says the noise is driving her nuts.
Rapids to Real Estate
Every bar, restaurant and hotel lobby in Aspen is litteredwith glossy magazines advertising McMansions for chief executiveofficers, trust-fund kids or lottery winners. ``An estate homesituated on 1.28 acres, old world architecture, stone, summer waterfeature, $12.9 million,'' reads one. ``Dramatic stone, log post-and-beam home, exceptional Colorado mountain style, $14.975million,'' says another. Even self-confessed ski-bums are donning chinos to hawkproperty. Jimbo Stockton, 39, has been a ski instructor for 15years and has lived in Aspen since 1997. During the summer, he useshis 20 years of experience as a river guide to steer white-water rafters down the rapids when the weather allows. ``September,October, November. That's three months when you're not alwaysworking,'' he says. ``April and May are pretty slow, too. And beinga river guide doesn't pay that well anyway.'' So, last year, Stockton took some time out and paid $1,300 totake the classes to secure his state Realtor license. ``I want tobe able to earn more money so I can afford my ski teaching habit,''he says. ``There's always room for one more honest Realtor. You canmake a pretty good living around here.''
Big Payday
Stockton, who pays $375 a month to rent ``a 100-year-old cabinin someone's backyard without a kitchen or bathroom,'' had alreadyclosed his first deal before earning his Realtor registration inAugust. One of his ski pupils bought a $6 million property lastyear, for which Stockton received a referral fee that was ``thebiggest paycheck of my life.'' It may be a bit of a stretch to draw conclusions about theoutlook for the U.S. housing market from what's happening in Aspen,whose famous residents include Ringo Starr and Jack Nicholson. It's not just about location, location, location, though; strictplanning regulations curbing the growth of the housing stock andthe willingness of buyers to load up on debt are equally important,and prevalent in cities that don't share Aspen's quaint charm orcelebrity inhabitants. In three years, Aspen Land & Homes has grown to a six-officebusiness from a single office. ``Aspen broke all records last year,in terms of the value of the deals we closed,'' says RochelleBouchard, one of the partners in the firm, an affiliate of CendantCorp.'s Sotheby's International Realty chain.
Million-Dollar Condos
Bouchard currently has a four-bedroom condo covering 4,300square feet, ``very high end, almost ski in, ski out,'' at the baseof Highlands mountain on her books at $4.9 million; in October, thesame property changed hands for just $3.4 million. She says thatwhen they opened for business, $1,000 per square foot was thebenchmark for pricing apartments. Now, it's $1,500 and rising. Bouchard estimates that a 9,000 square-foot, south-facingcorner plot in downtown Aspen would fetch as much as $5 million from a buyer looking to tear down existing structures to rebuild.And that means Blomquist, who is 72 and whose lodging houseoccupies just such a plot, faces an interesting dilemma. She's owned her business for 30 years and has watched inrecent times as small-hotel owners around her have capitulated inthe face of multimillion-dollar offers for their properties. With five children and seven grandchildren to spend time with, thetemptation to cash in her chips is strong.
``Last summer, there was a real-estate boom in Aspen. I wasgetting so many telephone calls,'' she says, looking around at thedecade-old Jacuzzi tub, the thin pathway shoveled between 4-feet-high snowdrifts, and an ancient chairlift salvaged when Aspen SkiCo. upgraded one of its ski-lifts. ``My grandson said to me,`Grandma, why do you still clean toilets?' But I don't know whatelse I'd do with myself.''
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