Telluride: comatose but not dead: smaller houses gain fashion in downturn.

• Author: Lewis, David
• Position: WHO OWNS COLORADO

In this state, Telluride vies only with Aspen and maybe Vail when it comes to glamour and glitz: Tom Cruise and Katie Holmes, Gen. Norman Schwarzkopf and now Jerry Seinfeld.

[ILLUSTRATION OMITTED]

Oprah.

Need more be said?

Telluride was and is more or less a remote little mountain town in a box canyon with Bridal Veil Falls at one end, noted as seat of San Miguel County, which is still a jurisdiction without a stop light, and for its wild silver mining days and its downtown Telluride Historic District.

To condense Telluride history a bit, there was mining, then came skiing, then came the Telluride Regional Airport, then came glitz and glamour. Without skiing and flying, Telluride might have ended in obscurity, which in real estate terms means something less than the $1,300 per-square-foot and up stratosphere the town heretofore has sometimes occupied.

To keep the glitz and glamour going, the town of 2,221 (2000 U.S. Census) hosts: the Telluride Film Festival, Mountain Film Festival, Telluride Jazz Celebration, Balloon Rally, Telluride Bluegrass Festival, Telluride Wine Festival, Fireman's Fourth of July Celebration, Telluride Tech Festival, Telluride Festival of the Arts, Mushroom Festival and Telluride Blues & Brews Festival.

[ILLUSTRATION OMITTED]

And that's just the summer festivals.

That's why the Olympic Penthouse, a $5.9 million condo for sale downtown, was designed with an 800-square-foot roof deck so tony cocktail partygoers can hear the music and see the fireworks, and also designed with high-end sound suppression windows, so partygoers don't have to see and hear the fireworks and music.

Great idea, but is the party over?

Olympic Penthouse had been on the market about five months at this writing. "Because it hasn't sold, is still sitting on the market and no one has made an offer, you can argue that our market is not supporting" the condo's price tag, said broker Corey Chandler. "It is a one-of-a-kind piece, so that we feel that we can price aggressively, but we are not in denial; we recognize that we are in a full-blown recession."

Is the town's real estate market, like its mega-resort cousins, wasting away in the doldrums?

Or is it worse than that? Telluride is "lethargic," says town of Telluride director of planning and building Chris Hawkins. "Comatose."

And that's the good news, because "comatose," let us not forget, is still not "dead." Out of about 170 homes on the market as of this writing, about two dozen could be classed...