Market Report

The Telluride real estate market has experienced a dramatic surge in home sales and new development over the past few years. Since 1995, real estate sales have increased year after year. 1999 and 2000 increased 62% and 32%, respectively, in dollar volume. With the doubling of lift-accessed skiable terrain in 2002, increased air service and maturing of the Telluride region, Telluride Properties expects real estate activity to remain brisk.

Telluride is a World Class Resort with world class skiing. The Telluride Ski & Golf Company invested $14 million in capital expenditures this year. Three new high-speed quad lifts open an additional 733 acres of incredible terrain to skiers and boarders of all abilities, providing a total of 1700 acres of skiing.

In addition to the Prospect Bowl ski expansion, the Telluride region has invested nearly $30 million in capital improvements within the last five years including the Telluride Conference Center, the Mountain Village Activity Center, Surge Air Garden Terrain Park, Telluride Teaching System, Ski Right Center, new trails, snowmaking equipment, golf course renovation, Allred's Restaurant, three new lifts (two high-speed quads and one fixed-grip triple) and snowmaking infrastructure.

Telluride is considered by many to be a safe haven for its residents and visitors - a story-book place only found in fairy tales. Tucked away in a box canyon with mountains soaring over the valley floor, Telluride is fairly remote. The closest traffic light is 65 miles away and everyone knows each other by their first names. The town of Telluride has 1,950 year round residents. United and America West Air-lines service the Telluride Regional Airport. Continental, American, United and America West service the Montrose Airport, only one hour away. An all weather instrument approach system and a 7,700-foot runway insure depend-able service 365 days a year.

Even with its small town atmosphere, Telluride has sophisticated cultural tastes and exceptional schools. The Telluride public school system was ranked in the top 8% of all Colorado public schools in 2000. Telluride offers a wide range of activities from concerts to ballet, mountain biking to fly fishing and dining in local eateries to mushroom forays. The pace is laid back and family life is rich.

The limited supply of homes in the area has provided the real estate sector to remain bullish. Surrounded by 14,000-foot peaks and national forests on three sides, Telluride has a limited amount of space in which to build new developments. The upward trend of moving from urban and suburban areas to resort communities has only added to the already high demand for a unique lifestyle and, hence, unique properties.

Property has appreciated at a double-digit rate over the past five years. Average sales price per transaction in the Telluride region increased from $480,000 in 1998 to $780,000 in 2001 representing an annual compounded return of nearly 18%. Telluride Mountain Village homes have increased at an annual compounded rate of 29% in the same period. Regional land sales have increased on average at a 31% annual clip since 1998.