Other resort towns agree: real estate is at bottom
May 1, 2009
In real estate, everyone is hurting. That was the consensus at the Rocky Mountain Resort Alliance panel discussion Thursday morning featuring real estate experts from Lake Tahoe, Calif., Jackson Hole, Wyo., and Vail, Colo.
The event was organized by the Park City Board of Realtors and held at Newpark Hotel at Kimball Junction.
Brett Williams from the Lake Tahoe Board of Realtors said sales volume in his area is down more than 40 percent. Condominium prices are down more than 60 percent. Jack Delay from the Jackson Hole/Teton Board of Realtors said transactions are down 79 percent. Kelly McDowell with the Vail Board of Realtors said January sales were only 33 percent of the previous year.
Land sales are way down in the three areas as well, suggesting development has stalled. Delay said developers in his area are getting creative with discounts to get money down on their properties, but they aren’t seeing takers.
In all three areas, location is determining how soft the markets are. At Lake Tahoe, places farther from the lake are softer than the rest. In Wyoming, Teton Village, which is close to the slopes, is doing better than Jackson. The Vail Valley is 40 miles long, McDowell explained, and home prices are determined by proximity to the mountains and the slopes.
"There’s a lot of ‘have’ and ‘have not’ properties out there," Williams said.
Recommended Stories For You
That’s making homes far from slopes or shores more affordable, resulting in properties under $500,000 being the strongest part of his market.
Homes priced at $1 million to $2 million are big and luxurious, but a few blocks from the water. Without the views, they are the weakest part of his market.
In Wyoming, the most affordable homes are the oldest, making them the least desirable and most over-priced, Delay said. He’s seen a lot of recent activity in homes topping $5 million, which is giving him hope, he said.
Homes more than $5 million are also selling OK in Vail, as are those less than $2 million. Geography mostly accounts for the weakness in the middle range, McDowell explained.
All three agreed that a lot of buyers are "looking for blood," in the words of Delay, but owners aren’t willing to lower prices. McDowell said people from Denver are pouncing on foreclosures, which have been as frequent as one per day. There aren’t enough jobs in Vail, however, making it a weaker market for primary residences.
Williams worries that buyers are being too short-sighted. Great deals aren’t always good long-term investments, which is why people buy real estate in the first place.
Delay has more buyers waiting in the wings than ever before. As soon as transactions pick up, there’ll be a ripple affect, he said.
Bill Delong, a Park City agent, said it was reassuring to learn that "we’re not alone out there." Nothing he heard was a "shocker." The information also made him optimistic that the bottom of the market has arrived, or it’s close, he said.