Ski Home Prices on a Downhill Slope
From the Colorado Rockies to the Vermont Green Mountains, ski resort bargain hunters are out in force looking for deals. Unfortunately for sellers, a glut of homes has meant a downward slope for prices.
If nothing else, for those that need to sell, the real estate freefall is an equal opportunity scourge, hitting the well-heeled as well as the entry-level homeowner.
"I never thought I would see the day of million-dollar price reductions," Colorado real estate agent Karen Barrocas told ABC News. "It's definitely a buyer's market and the supply is much larger than the demand."
In Eagle County, home of ski havens Vail and Beaver Creek, sales have dropped more than 72 percent from the hey day of 2005 and 47 percent from 2008. And, as sales fall, prices drop. The area's prices have dropped 30 percent from their 2006 peak.
Despite the tough sales climate, ski resort property has been relatively insulated from foreclosures. A big reason is that many luxury resort buyers paid cash or put up large down payments, giving them a lot more equity than the toxic residential loans that have plagued the real estate market.
There have been just 38 foreclosures for the year in Vail and just one last month, according to RealtyTrac. Snow Mountain in Vermont had just three this year and none in nearby Mt. Stowe. Killington, Vermont had one each in the past three months.
The Colorado resort areas have been hit a bit harder than their Eastern counterparts, who are much closer to major population centers, such as Boston and New York, and are able to reach a greater audience.
But that hasn't deterred all buyers. Even in the Great Recession, there are those who have plenty of money. Ironically, some of the biggest real estate transactions in Vail history have occurred in 2009. Two homes sold for more than $15 million in Beaver Creek and a Bachelor Gulch home recently sold for $11 million.
The U.S. ski resort market isn't the only one hurting. Sales have also taken a dive at Whistler, British Columbia, host of the 2010 Winter Olympics that begin in February.
"Everywhere I've been working, real estate sales just dropped dead 15 to as long as 20 months ago," Paul Mathews, president of Ecosign Mountain Resort Planners in Whistler, told the New York Times. Mathews has been involved in the planning of 30 ski resort projects around the world in the past year.
Ski resorts are a lot like old time land speculation, when investors would buy up big chunks of property, develop amenities and then sell the lots. Unlike their fast-buck forefathers, today's ski resort developers are well capitalized and it's rare that one goes under.
Instead, resorts are biding their time, holding off on construction until the economy becomes more robust and pent up demand is unleashed.