An uptick in sales of high-end mountain real estate in Colorado has prompted a critical question: Are the rich really returning to the real estate market and buying luxury homes? Or are they still hoarding their wealth after getting burned in the crash? Mixed signals about what the wealthy are doing with their money are everywhere. One day we hear via Scorpio Partners that the rich might have as much as $26 trillion stashed away that they're not giving to banks and wealth managers. Meanwhile, The New York Times reports that a growing number of homeowners with million-dollar-plus mortgages have simply stopped making payments.
On the other hand comes word that high-net-worth buyers are apparently loosening their wallets a bit to purchase homes in swanky Colorado resorts like Vail and Aspen. It's not a bellwether market like Manhattan, or course, but some say the flicker of activity in this micro-market favored by high fliers could be a signal that the end of the Great Recession is near and a real estate rebound is on the way.
It's more like a blip, as high-end buyers cherry-pick discounted properties while the getting is good.
True, there have been some flashy deals out there amid the foreclosure auctions of multimillion-dollar properties in these luxury ski areas.
Last month hedge fund honcho John Paulson bought a $24.5 million ranch and home in Pitkin County (home to Aspen and Snowmass), reports the Colorado Independent. and there were 12 transactions totaling $42 million in Vail in May, with six homes selling for more than $4 million,
Overall, the dollar volume of real estate sales more than doubled in Eagle County (home to Vail and Beaver Creek) in the first five months of 2010 compared to a year ago, the newspaper says, citing figures from the Land Title Guarantee Co.
But despite the encouraging numbers, these sales appear to be selective purchases at knocked-down prices -- OK, discount here might mean taking $5 million off the top -- and reflects the fact that buyers are scooping up properties in a depressed market.
"I don't think personally it's a sign that we've bounced back and now everybody's jumping back in," said broker Led Gardner of Slifer Smith & Frampton Real Estate. Instead, he said, buyers are recognizing "the opportunity being presented." Of course, the Paulson purchase is impressive, but recall that Pitkin County had the record sale of a $47-million ranch back in in 2006.
Seems the rich are just like us after all -- always searching for a bargain.
More on AOL Real Estate:
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