Aspen Real Estate Blog
Skiers Buy Vacation Homes as Prices Fall
February 3, 2010
OVER the holiday season all was snowy and bright at ski areas across the country, with a festive jingle in the air. It wasn’t sleigh bells — it was the sound of money. Vacation-home seekers who saw recessionary opportunities were looking to buy.
Many were ready to pay in cash, and they wanted great deals, like a $900,000 slope-side condominium for $500,000 or a studio in town for half the asking price. They were getting what they wanted because it is the best buyers’ market in 20 years, real estate agents said, with inventory at levels not seen since 2001.
John Eldridge, 59, a lawyer, and his wife, Amelia, 58, of Fayetteville, Ark., have a lot of affection for Snowmass, Colo. They learned to ski there with their families in the 1970s. They were married there and bought a small condo so they could visit often. Two children and several grandchildren later, they are looking to move up to a three-bedroom condo. After looking at more than 10 units during their annual holiday visit to Snowmass in December, they decided to wait until January to make an offer of $700,000 on a three-bedroom ski-in, ski-out condo that was listed at more Quick read more or view full article than $1 million just last year.
"We’re seeing a number of price reductions as sellers get more realistic," said Ms. Eldridge, who has been a real estate agent for 30 years and is well acquainted with the vagaries of the market. “Time has caused some sellers to accept offers that they may have rejected before."
As an example of those low prices Andrew Ernemann, a broker at B. J. Adams & Company, which has offices in Aspen and Snowmass, said there was a studio just a few blocks from the Aspen gondola listed at $275,000. Just a few years ago the asking price would have been upward of $350,000.
If prices are flat or still falling, the number of sales seems to be increasing, real estate offices across the West said. Patti Brave, a broker in the Cordillera office of Slifer, Smith & Frampton in the Vail Valley in Colorado, said that the first seven months of 2009 were dismal, but that the rising stock market had helped drive up sales, though prices at Vail and Beaver Creek are still off by 10 percent or more in the last three years.
Telluride, the historic Colorado mining town tucked in the end of a valley in the remote San Juan Mountains, remains a bright spot for sellers, agents there say. Steve Finger, owner of Finbro Construction and Development, is building Element 52, a 200,000-square-foot, 32-unit luxury condo project overlooking town. The development, which is more than 60 percent sold, is named for telluridium, a form of gold ore mined here in the 19th century.
Even with mortgage rates holding at around 4 percent for qualified buyers, cash deals are king right now, brokers say.
In Jackson, Wyo., “buyers are paying cash and determining the market,” said Greg Prugh, a broker, who said prices have fallen by as much as 50 percent since 2007. He recently sold a two-bedroom condo in Teton Village listed at $700,000 for $360,000 in cash. “Modern-day Jackson was built on construction, financing and real estate,” he said. “With financing tight, those jobs are gone, and the middle-class people who bought condos on spec are forced to sell.”
The huge price cuts seem to be bringing in more traffic, brokers say. “Phones are ringing and people are walking into our offices again,” said Martha Johnson, president of Rivers to Peaks Big Sky Real Estate in Big Sky, Mont. A recent client, William Martin, 53, and his wife, Susan, 51, from Locust Grove, Ga., paid $275,000 for a condo listed at $600,000 in the Big Sky Town Center, because “we’ve been coming here for 17 years to ski,” he said. “It is not crowded, not pretentious and the price was right.”
For the first time since a major downturn in 2007, Tom Peek, a partner at the Park City office of Prudential Utah Real Estate, is seeing “a lot of pent-up demand” for real estate in Park City-Deer Valley.
“Normally we don’t see a lot of activity until Christmas time,” Mr. Peek said, “but our market started picking up around Thanksgiving, before the slopes were even open.”
A two-bedroom condo on the ice rink in Park City could go for $600,000 (less for cash), he said; a few years ago it would have cost more than $1 million. In New Park and Redstone, developments within five miles of the ski areas, a two-bedroom new-construction condo would cost under $300,000.
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Kevin Moloney for The New York Times
Snowmass is one of the resort areas with a large inventory of homes for sale.
Shari Chase, president and chief executive of Chase International real estate in Nevada, said low mortgage rates (around 4 percent for buyers with good credit scores) and a federal tax credit of $6,500 for eligible repeat home buyers have helped to revive the condo market in South Lake Tahoe and Incline Village. “People are looking for long-term investments,” she said, “and that’s putting something that’s very solid and much needed into the foundation of the housing industry.”
“There are great values in all the areas that were overbuilt during the real estate boom years,” she added. “What was a million is now $600,000, and a $600,000 condo will sell for $325,000.”
Pamela Goetz, associate broker at Sotheby’s International Realty Sun Valley, said: “We all got into a fantasy world there for a while but are going back to the old rules of real estate: Make a wise purchase and anticipate holding it for a while.”
Ski areas in the Northeast have not been hit as hard those in the West, but condo prices, already lower than those in the West, are now the lowest in decades, brokers say. Stowe, Vt., has seen a “noticeable uptick” in activity in the last few months, particularly at the high end, said Brent Libby, managing broker in the Stowe office of Sotheby’s Vermont Country Properties.
“Owners of some luxury properties are highly motivated to sell and have made it known,” he said. He recently sold a condo listed at $1.175 million for less than $900,000 (cash) and expects the bargain prices to hold up through the spring but probably not beyond.
Many of his clients come from the financial world. “The stock market is up, and everyone is feeling optimistic,” he added.
Sunday River and Mount Abrams in Maine are known for uncrowded slopes, short lift lines and great snow even in bad years; more than 95 percent of the terrain has snow-making equipment. Ed Kennett of Kennett Realty in Bethel, Me., is listing condos that start at $70,000 for a studio and just under $200,000 for two-bedroom units. He anticipates that the market will hit bottom by June 2010, then prices will start to rise. “Sellers assume the bottom is hit before buyers want it to be,” he said.
Deb Howard, a second-home expert at the National Association of Realtors, said that though the 2009 market was the lowest it had been in a decade she expected some good news this year. Agents said traffic was particularly high during the holidays.
“Typical clients come to vacation in an area many times as a renters,” Ms. Howard said. “When they feel comfortable and are ready to buy, it can take months or even years to find the perfect second home.”
“Of course,” she added, “there are the clients who come once, fall in love and want to buy before they step on a plane to go back home.” Read Less
Many were ready to pay in cash, and they wanted great deals, like a $900,000 slope-side condominium for $500,000 or a studio in town for half the asking price. They were getting what they wanted because it is the best buyers’ market in 20 years, real estate agents said, with inventory at levels not seen since 2001.
John Eldridge, 59, a lawyer, and his wife, Amelia, 58, of Fayetteville, Ark., have a lot of affection for Snowmass, Colo. They learned to ski there with their families in the 1970s. They were married there and bought a small condo so they could visit often. Two children and several grandchildren later, they are looking to move up to a three-bedroom condo. After looking at more than 10 units during their annual holiday visit to Snowmass in December, they decided to wait until January to make an offer of $700,000 on a three-bedroom ski-in, ski-out condo that was listed at more Quick read more or view full article than $1 million just last year.
"We’re seeing a number of price reductions as sellers get more realistic," said Ms. Eldridge, who has been a real estate agent for 30 years and is well acquainted with the vagaries of the market. “Time has caused some sellers to accept offers that they may have rejected before."
As an example of those low prices Andrew Ernemann, a broker at B. J. Adams & Company, which has offices in Aspen and Snowmass, said there was a studio just a few blocks from the Aspen gondola listed at $275,000. Just a few years ago the asking price would have been upward of $350,000.
If prices are flat or still falling, the number of sales seems to be increasing, real estate offices across the West said. Patti Brave, a broker in the Cordillera office of Slifer, Smith & Frampton in the Vail Valley in Colorado, said that the first seven months of 2009 were dismal, but that the rising stock market had helped drive up sales, though prices at Vail and Beaver Creek are still off by 10 percent or more in the last three years.
Telluride, the historic Colorado mining town tucked in the end of a valley in the remote San Juan Mountains, remains a bright spot for sellers, agents there say. Steve Finger, owner of Finbro Construction and Development, is building Element 52, a 200,000-square-foot, 32-unit luxury condo project overlooking town. The development, which is more than 60 percent sold, is named for telluridium, a form of gold ore mined here in the 19th century.
Even with mortgage rates holding at around 4 percent for qualified buyers, cash deals are king right now, brokers say.
In Jackson, Wyo., “buyers are paying cash and determining the market,” said Greg Prugh, a broker, who said prices have fallen by as much as 50 percent since 2007. He recently sold a two-bedroom condo in Teton Village listed at $700,000 for $360,000 in cash. “Modern-day Jackson was built on construction, financing and real estate,” he said. “With financing tight, those jobs are gone, and the middle-class people who bought condos on spec are forced to sell.”
The huge price cuts seem to be bringing in more traffic, brokers say. “Phones are ringing and people are walking into our offices again,” said Martha Johnson, president of Rivers to Peaks Big Sky Real Estate in Big Sky, Mont. A recent client, William Martin, 53, and his wife, Susan, 51, from Locust Grove, Ga., paid $275,000 for a condo listed at $600,000 in the Big Sky Town Center, because “we’ve been coming here for 17 years to ski,” he said. “It is not crowded, not pretentious and the price was right.”
For the first time since a major downturn in 2007, Tom Peek, a partner at the Park City office of Prudential Utah Real Estate, is seeing “a lot of pent-up demand” for real estate in Park City-Deer Valley.
“Normally we don’t see a lot of activity until Christmas time,” Mr. Peek said, “but our market started picking up around Thanksgiving, before the slopes were even open.”
A two-bedroom condo on the ice rink in Park City could go for $600,000 (less for cash), he said; a few years ago it would have cost more than $1 million. In New Park and Redstone, developments within five miles of the ski areas, a two-bedroom new-construction condo would cost under $300,000.
Skip to next paragraph
Enlarge This Image
Kevin Moloney for The New York Times
Snowmass is one of the resort areas with a large inventory of homes for sale.
Shari Chase, president and chief executive of Chase International real estate in Nevada, said low mortgage rates (around 4 percent for buyers with good credit scores) and a federal tax credit of $6,500 for eligible repeat home buyers have helped to revive the condo market in South Lake Tahoe and Incline Village. “People are looking for long-term investments,” she said, “and that’s putting something that’s very solid and much needed into the foundation of the housing industry.”
“There are great values in all the areas that were overbuilt during the real estate boom years,” she added. “What was a million is now $600,000, and a $600,000 condo will sell for $325,000.”
Pamela Goetz, associate broker at Sotheby’s International Realty Sun Valley, said: “We all got into a fantasy world there for a while but are going back to the old rules of real estate: Make a wise purchase and anticipate holding it for a while.”
Ski areas in the Northeast have not been hit as hard those in the West, but condo prices, already lower than those in the West, are now the lowest in decades, brokers say. Stowe, Vt., has seen a “noticeable uptick” in activity in the last few months, particularly at the high end, said Brent Libby, managing broker in the Stowe office of Sotheby’s Vermont Country Properties.
“Owners of some luxury properties are highly motivated to sell and have made it known,” he said. He recently sold a condo listed at $1.175 million for less than $900,000 (cash) and expects the bargain prices to hold up through the spring but probably not beyond.
Many of his clients come from the financial world. “The stock market is up, and everyone is feeling optimistic,” he added.
Sunday River and Mount Abrams in Maine are known for uncrowded slopes, short lift lines and great snow even in bad years; more than 95 percent of the terrain has snow-making equipment. Ed Kennett of Kennett Realty in Bethel, Me., is listing condos that start at $70,000 for a studio and just under $200,000 for two-bedroom units. He anticipates that the market will hit bottom by June 2010, then prices will start to rise. “Sellers assume the bottom is hit before buyers want it to be,” he said.
Deb Howard, a second-home expert at the National Association of Realtors, said that though the 2009 market was the lowest it had been in a decade she expected some good news this year. Agents said traffic was particularly high during the holidays.
“Typical clients come to vacation in an area many times as a renters,” Ms. Howard said. “When they feel comfortable and are ready to buy, it can take months or even years to find the perfect second home.”
“Of course,” she added, “there are the clients who come once, fall in love and want to buy before they step on a plane to go back home.” Read Less
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