A Comparative Study of the Premier Rocky Mountain Resort Communities
from “Market View, A Comparative Study of the Premier Rocky Mountain Resort Communities,” Yellowstone Club, 3rd Quarter 2010.
Recently the Yellowstone Club Sales and Marketing Team conducted research in seven Rocky Mountain luxury ski-resort markets to determine the local market trends through the 2nd and 3rd quarters 2010. The report discusses the significant price corrections that have taken place in the ski-resort market since 2007. The Yellowstone team met with expert realtors in each market and these teams pulled together statistics and observations that reflect market conditions. Each market had its own way of analyzing and presenting its data, and summaries of these findings are below.
Big Sky, MT
2010 YTD sales volume increased 35% over 2009 and total number of transactions increased by nearly 60%.
2nd Quarter 2010, showed a significant increase in sales transactions and dollar volume of sales over 2009 and 1st quarter 2010. Data shows single family homes selling in the $4m-$6m range increased (overall percentage not provided). Condominium sales held at a price average of $1.5m, but with an overall decrease in number of condo transactions by 75%. The depressed condo market is said to be the result of overpricing and a strong buyer dependency on lending sources and mortgages.
Deer Valley, UT
In the first quarter, 2010, the Deer Valley market surpassed the Vail Valley market in sales for the first time in a number of years. This is believed to be the result of the 30-40% price reduction of larger vertical product for sale from the peak prices of 2007. In the past twelve months, Deer Valley had 58 homes for sale, priced between $16m and $1.8m. Of these 58 homes, 26 (or 45%) were sold during this period. The condominium market was even stronger, selling 79% of their 2009 inventory. There is, however, the potential that increasing inventory will continue to hold prices down. The 2010 summer real estate market in Deer Valley had more activity that the summer of 2009, but buyers are still very hesitant to transact.
Jackson Hole, WY
June and July were considered soft sales months; August performed better (no specific data provided). Third quarter sales rebounded with 10 sales occurring over the $3,000,000 mark as compared to 4 sales in this price point the year before. This is some indication that the higher end of the market is becoming more active again. From last year, total sales volume was up 92%, as were number of transactions (up by 51%). The number of days on the market remains at record highs, with single family homes averaging 275 days to sell.
Sun Valley, ID
Despite a history of long-term growth, Sun Valley is struggling in the market, showing a 75% decrease in sales volume from 2005 to those in 2009. It is estimated that Sun Valley has seen a price correction of approximately 40%. The condominium segment in particular is facing significant challenges. A major developer defaulted on his condominium developments and these are now bank owned. This has resulted in an over saturation of bank-owned inventory that is selling at 50% of 2007 prices. The average condo sale price is down from $1,200,000 in 2007 to prices today hovering only slightly over $500,000. There is a general feeling among the real estate community that Sun Valley has been slow to price correct, and this lag is believed to mean that the Sun Valley market has not yet hit its bottom.
Realtors in Telluride are guarded but gaining confidence that the Telluride market is stabilizing. Old Town Telluride, an area of limited real-estate and popular for its local color, retail, dining, entertainment, and foot access, is showing signs of recovery. On the other hand, Mountain Village, seemingly in lack of the cultural draw known to Old Town, is still experiencing a downward trend, with a saturated inventory of available properties. Homes and condominiums are selling at $600-$1,200 per square foot. Condominiums that are selling boast quality views and ski access. The first quarter of 2010 was reported as having shown promise compared to 2008 and 2009, but no specific data was provided.
Vail Valley, CO
2009 was one of the most difficult real estate years for Vail, with total transactions closing at $898m—which marks the first year since 1996 for numbers below $1 billion. In 2010, the real estate market began to improve.
There were 18 residential closings over $5m in 2009, and 14 residential closings over $5m in the first four month of 2010. Big investors have stuck by Vail. The Ritz Carlton, Solaris, and The Four Seasons continued with building plans and are all slated for completion by the end of the 2010/2011 ski season. Solaris has contracted 54 of their residences through pre-sale, and they have closed ten at an average price of $2600 per square foot, but they are expecting up to 30 deals to fall apart. The Ritz and Four Seasons also have contracted pre-sales and are seeing a small percentage of them close.
The Yellowstone Club, MT
New ownership (CrossHarbor Capital Partners) as of July 2009, coupled with that ownership teaming-up with a club property developer (Discovery Land Company) has infused The Yellowstone Club with capital, infrastructure, amenities, and what Yellowstone Club determines to be “new energy” that has turned the club into a place of pride and increased enjoyment for owners. The results have turned sales around. Since July of 2009, 30 new members have been gained, as well as over $170,000,000 in sales. Member referrals have been a part of this increase. Since July 2009 there have been 12 single family home sales, averaging $848 per square foot (a discount of 25-30%) and 23 lot sales at an average of $538,923 per acre (a 45-50% discount). The difference between the list price and contract price has averaged 17%, with that difference narrowing. August and September heralded 7 new contracts, totally $35,000,000. The Yellowstone Club is the only club, worldwide that offers private skiing (2,200 skiable acres) and golf to its members.