Non Region Specific Ski Town Real Estate

[Wasatchman]

In my lifetime, real estate has never gone back to previous lows but there have been sizable corrections. I suspect we will see that now.

During the housing crisis of 2008/2009 I saw plenty of examples that went below previous lows especially with foreclosures. Of course that was a generationally nasty housing recession few people would ever want repeated.

 

[Pat AKA mustski]

During the housing crisis of 2008/2009 I saw plenty of examples that went below previous lows especially with foreclosures. Of course that was a generationally nasty housing recession few people would ever want repeated.

It didn't even get close to previous lows in California. Lots of people lost their shirts but that was because the bottom dropped out of a falsely inflated market. It dropped a lot, but not below previous lows. I sold 2 properties in 2005 just as it was turning and bought one in 2007 and one in 2009. Both went down after I bought them but they never even came close to their previous lows.

 

[Wasatchman]

It didn't even get close to previous lows in California. Lots of people lost their shirts but that was because the bottom dropped out of a falsely inflated market. It dropped a lot, but not below previous lows. I sold 2 properties in 2005 just as it was turning and bought one in 2007 and one in 2009. Both went down after I bought them but they never even came close to their previous lows.

Perhaps not California but there were definitely places in Phoenix, Tampa, and even Salt Lake City that went below previous lows.

 

[pete]

On flip side, some resorts appear to be doubling down to grow their base (no pun intended)

U.S. Ski Resorts Pursue Extensive Expansions, Giving Local Home Prices a Major Lift

Upgraded ski lifts, increased snow-making and new real-estate developments may be a big draw for mountain home buyers, but not everybody is happy about the growth.

www.wsj.com

 

[Quandary]

Perhaps not California but there were definitely places in Phoenix, Tampa, and even Salt Lake City that went below previous lows.

Phoenix? If you are talking new built homes that sell at near peak or peak followed by a market drop then sure it will drop below previous lows. But pre-existing stock? Highly unlikely below previous lows.

 

[Wasatchman]

Phoenix? If you are talking new built homes that sell at near peak or peak followed by a market drop then sure it will drop below previous lows. But pre-existing stock? Highly unlikely below previous lows.

I was referring to what occurred in some places in Phoenix during the last housing crises. Not predicting that it will happen this time. I don't think it will in fact this time. There were quite a few foreclosures last housing crises which resulted in properties being sold at some fire sale prices.

 

[Quandary]

I was referring to what occurred in some places in Phoenix during the last housing crises. Not predicting that it will happen this time. I don't think it will in fact this time. There were quite a few foreclosures last housing crises which resulted in properties being sold at some fire sale prices.

In the Phoenix area there were thousands of foreclosures and a few of the very worst properties were almost given away. That is true. However the vast majority were sold to private equity, flippers, individual investors and folks trying to buy a second home. Most went for good prices but no where near historical lows. Consequently it would be a misrepresentation to say that the market fell below previous historical lows. To put this in perspective that would be like saying my place in Breckenridge would fall below what we paid for it in 1999. Or even what it sold for when it was built in the 70s, that would be the true historic low.

 

[Wasatchman]

The housing market is in free fall with 'no floor in sight,' and prices could crash 20% in the next year, analyst says

"Eight straight declines in sales and no floor in sight," Pantheon chief economist Ian Shepherdson wrote in a note on Thursday.

markets.businessinsider.com

 

[Rod9301]

It looks like the drop in process will be worse than 08. The real house prices at the peak were higher then 07, and then interest rates look like will go up from here

 

[martyg]

Just not seeing it in Durango or Telluride. Desireable houses ouses may sit on the market for days now, instead of being gone in minutes. In our neighborhood cost to build has cracked $700 / sq ft.

 

[Jerez]

The cost to build does not appear to be coming down soon which wil help keep prices up. But things can change. Bet the Brits didn't expect their recent economic lurch.

 

[pete]

not positive how it affects all ski areas but years ago attended a sales pitch on time shares in Park City, by Marriot. The sales guy was really pretty cool.

He noted that (at least for condo/time shares) that only ~1% were at ski resorts, so trading/resale was pretty safe.

I suspect the same holds true, that ski resort housing while dipping in value due to interest my increase, it won't see what other more "common" areas may see. Ski resorts even in down turns seem to still attract those with disposable cash (well, more than I have handy) so while things may become more selective, maybe not dire.

I see more risk in a resort where climate change may affect value more greatly.

 

[Quandary]

A 40/50% increase followed by a 20%, makes for a nice gain over the last 3/4 years.

 

[Alexzn]

The sad reality is that most people who bought ski town real estate can afford to wait until market rebounds. A lot of those people also got cheap mortgages, so even if the house value goes down, they still got somewhat of a deal, so as long as they can afford the payment they will stay put. Again, sadly pandenic and remote work opened a lot of eyes towards ski town really estate. Not all remote work positions will stay, but some will, again putting some brakes on the sell off. But days of rapids appreciation are over for a while. Ski town really estate is a consumption purchase, not an investment.

Some people need to sell dryer to deaths, divorces, career moves etc, so that's why process will inevitably drop. But it does but mean that they're will be a glut off cheapo houses on the market, like it was in the areas affected by subprime boom and bust.

 

[Pat AKA mustski]

I disagree. With the establishment of the STR market, ski real estate very much became an investment. I, personally, know a few people who own multiple units and live off the income.

 

[Wade]

The sad reality is that most people who bought ski town real estate can afford to wait until market rebounds. A lot of those people also got cheap mortgages, so even if the house value goes down, they still got somewhat of a deal, so as long as they can afford the payment they will stay put. Again, sadly pandenic and remote work opened a lot of eyes towards ski town really estate. Not all remote work positions will stay, but some will, again putting some brakes on the sell off. But days of rapids appreciation are over for a while. Ski town really estate is a consumption purchase, not an investment.

Some people need to sell dryer to deaths, divorces, career moves etc, so that's why process will inevitably drop. But it does but mean that they're will be a glut off cheapo houses on the market, like it was in the areas affected by subprime boom and bust.

Why is it sad that people may be able to hold on to their houses through a market downturn?

You’re rooting for them to lose their houses?

 

[Jim Kenney]

The West’s sharp housing market correction: Here’s how fast home prices have fallen in 4 months

The biggest declines are concentrated in the West, largely in states that surged during the pandemic housing frenzy: California, Arizona, Nevada, Colorado, Idaho and Utah.

www.deseret.com

good, short article. No pay wall. Median house in Salt Lake county went from 400k to 650k between spring 2020 and spring 2022. But Values in ut have dropped almost 7% in ut in last 4 months.

 

[Wasatchman]

The West’s sharp housing market correction: Here’s how fast home prices have fallen in 4 months

The biggest declines are concentrated in the West, largely in states that surged during the pandemic housing frenzy: California, Arizona, Nevada, Colorado, Idaho and Utah.

www.deseret.com

good, short article. No pay wall. Median house in Salt Lake county went from 400k to 650k between spring 2020 and spring 2022. But Values in ut have dropped almost 7% in ut in last 4 months.

An average 7% drop in Salt Lake County makes sense from what I've seen anecdotally. Some instances I've seen around a 20% drop and a few areas where I have seen no drop at all yet. But it is clear the market has peaked and heading downward which i don't think is a bad thing given how frothy it got.

 

[Wasatchman]

@Jerez it is interesting that they even have an article in New Zealand about the slowdown in AirBnB bookings in the US. It is an interesting read.

'No bookings at all': Airbnb hosts panic as guests slam cleaning fees and 'chores lists'

Is the era of Airbnb coming to an end?

www.nzherald.co.nz

 

[Jerez]

Yep.

I inderstand the backlash. But wait until they see the nightly rates for hotels with lodgers taxes and fees. At least in mountain towns where everyone is struggling to secure cleaning staff. Add meals out and it is still more expensive than airbnb, especially for groups or families who need more than one bedroom.