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Non Region Specific Ski Town Real Estate

DanoT

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Sun Peaks B.C. in winter, Victoria B.C. in summer
No worries, it’s probably already in escrow with a developer.

I'm willing to bet that all of the nearby ski resorts welcome any extra skier visits that are the result of a discussion on this forum... resultant impact on Chewalah house prices=zero. ogsmile
 

Lorenzzo

Be The Snow
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UT
I'm willing to bet that all of the nearby ski resorts welcome any extra skier visits that are the result of a discussion on this forum... resultant impact on Chewalah house prices=zero. ogsmile
No doubt. I say that not because it appeared in this thread but because with my day job I tend to know what they’re up to.
 

DanoT

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Meanwhile, at a ski town in Italy, they are offering places for 1 euro --- to BUY.


I gotta think some, thanks to Covid, work from Italians are going to jump at this oppourtunity. And retirees interested in small town living but only 2 hours from Rome, never mind nearby resorts.
 

MikeW Philly

Getting off the lift
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Mar 10, 2019
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266
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Harleysville, PA
Wow. I’ve read some fascinating threads on this site but in some respects this one takes the cake - even if there are both good and bad connotations/impacts to what’s being discussed.

I have been poking through posts this morning as I was looking at some of the feedback/resorts for mountains I hadn’t skied and/or might not know quite as much about such as Taos or Telluride (although I know about their clinics) Whitefish, maybe Bend (although I knew about the tech impact out there) etc..

My wife and I have been talking about a home on the slopes - offset initial 5-7 years in renting - but ideally one we would live in part of the year (as I’ve always worked remote anyway). So I needed some mountains to consider outside of the obvious Tahoe, Summit Cty, Utah, even Bozeman was on the list. So I guess in some ways I’m part of the problem (Even if I’m coming from East coast vs the west).

Over the last few hours I’ve literally read through every post - dreary rainy day. IF you break all the items down you sort of hear our economy at scale:
  1. Increasing housing creating more wealth but also wealth disparity and this is happening everywhere not just ski towns
  2. Soaring tuition rates creating downstream impact on the younger generations but also many of their parents
  3. Changing talent dynamics - not only the obvious WFH - which has been growing dramatically over last decade and now only accelerated while also increasing wealth divide - but also “The Great Resignation” 50% plus of americans switching or leaving jobs in next year, all of this while employers are struggling to keep positions filled or even hire. Hell Apple just offer $180k stock bonuses ot keep engineers from leaving and while thats on the extreme end it’s not an uncommon practice to see employee perks/bonuses soar in white collars space.
    1. Many 55+ folks exited work all together as well which has shrunk the skilled labor pool.
    2. Probably worth pointing out WFH has also shifted not only second homes but modifications to existing homes treating the boom in craftsmen work also.
  4. Younger generations struggling to get started, build wealth, or as many in this thread put it to get ahead what was once considered normal.
    1. As a separate note it’s also worth calling out that the greatest wealth transfer in American history is about to happen with the passing of boomers. So despite everything else that alone is reason to suspect none of what’s going on is likely to slow down anytime soon.
All of that amounts to essentially a shrinking / and also more spread economically middle class. Too hefty of a topic but all that leads back to WFH. I’ve worked from home near a decade now and also sales/consulting with big enterprises. I’ve watched this trend grow each year and one of the primary hold backs was legacy leadership concernes about productivity. Well the pandemic has forced that change and productivity has not been hit and thats with childcare being an issue. As childcare solutions are solved (covid hurt this) you’ll see that trend even get better.

Collaboration some may think are an issue but for those who have worked from home for a long time will tell you it’s just a skill and a skill that can be taught / learned. I’ve introduced more people at our HQ to each other than has ever happened ot me, and even consulting with big companies you quickly learn half the time they don’t know people in their own company or even among their own teams they’ll be spread out across Atlanta, NYC, Columbus, Charlotte etc…. So it’s not like they are working side by side anyway.

We are two years into the pandemic, behaviors have been set, workers want/demand flexibility (one of the top if not number one reason cited when leaving jobs lately) and with the great resignation going on WFH isn’t like to change soon. After 3-5 years of WFH it’s then a norm. Which leaves one prime issue left to solve with WFH. Innovation - this is probably the toughest to solve but given the previous facts companies will figure it out.

On the housing side in and out of ski towns there are a lot of similarities:
  1. Housing starts in November/decemebr were down but inventory is still low. If this continues maybe the obscene growth stops but it doesn’t appear likely To reverse course and values drop. This especially true with mortgage rates where even if the went from 3.25% to 5% - which is highly unlikely and a big jump at that - it still wouldn’t cause a large enough shift out there.
  2. Also worth noting even outside of ski towns houses are going obscenely quick, cash offers (yes some private equity firms) but many investors from the middle/upper lower class who have less potential places to put that cash and earn a return than they did some years ago. Real estate at large has become a key focus for investments everywhere.
  3. In ski towns, yes SRT has created a bigger growth in this but even if SRT benefits were cut 30% in profits, it’s still beating LTR benefits and people aren’t likely to find an alternative source that could match that, at least as safely. It also seems unlikely towns kill SRT completly because it could really destabilize home prices which would hurt the local economy in entirely different ways. And more candidly if you look at the east / west coasts and how zoning laws work you can see the older generation, those in office and in power, tend to be loath to completely kill there own wealth.
  4. Finally those expecting a crash like 08. Something to keep in mind we don’t have the crazy lack of underwriting occurring then, the subprime market was out of control, on top of the individual market you also had mortgage back security compounding the issue, and lets not forget fun balloon payments. During the Great Recession median housing prices nationally fell 9.5%, some areas hit harder but those areas like Naples rebounded more quickly. None of that is occurring now so it’s unlikely to be near as big of a crash. And bluntly speaking lets say 10% correction in ski towns, does that really solve affordable pricing issues for people on a 750-1million home for those that can’t afford?
I realize this probably too hefty post (overly thoughtful I guess today as I look to my own middle age plans in the future) but it’s sort of a long winded way of saying even if a correction does come it’s unlikely to solve this problem for ski towns or frankly for the younger generation - weird saying that as an older millennial - with lots of little changes that hopefully lead to some type of workable solution. It’s a complex enough problem, and not a localized issue when you really look at everything nation wide, to realize it’s unlikely to be a silve bullet fix or even a quick fix.

It saddens me that I’ll likely be part of the problem but my parents are snowbirds - I have no desire to live in Florida in the winter. Mountain ski home with fresh air keeping me alive longer on the other hand…..

Anyway apologies for the crazy long, heavy post. For whatever reason this thread really stuck me in a lot of ways this morning. Wish I had seen it earlier this year. But with ski season being demolished last year iH ave to admit I was not on here As much.
 
Thread Starter
TS
newfydog

newfydog

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Wow. I’ve read some fascinating threads on this site but in some respects this one takes the cake
For whatever reason this thread really stuck me in a lot of ways this morning. Wish I had seen it earlier this year.

Heck, I started this darn thread, have followed it, and I've got to say, I feel I know less about what is going on and where it is headed now than when I started it.
 

MikeW Philly

Getting off the lift
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Harleysville, PA
Heck, I started this darn thread, have followed it, and I've got to say, I feel I know less about what is going on and where it is headed now than when I started it.

I know the feeling. In some regards certain fundamentals of the economy are bad on the low end. But a lot of the things being discussed just aren’t influenced by that. I got smacked in the face with that reality last year.

My first home purchase was a condo on an FHA loan (so literally 3.5% down) in 2008. I bought it because I knew it would rent well and it’s a key part of my retirement planning. During 2020 I was originally trying to buy another property same location / development. Had a few opportunities but just pushed it off because prices semed insane.

Fast forward to early this year, I literally paid 10% more, inspection waived, to get the same property but this time I did not pass. Partly because I didn’t want to sit another year with money in the bank actually losing value. Partly because it’s become apparent that even those some parts of the market are weak there is too much wealth on the higher side of the middle class and upper class - there’s just no reason to see a recession happen in the next 2 years and certainly not a big market collapse. A slow in growth? Maybe but just too much money/cheap money.
 

Uncle-A

In the words of Paul Simon "You can call me Al"
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Wow. I’ve read some fascinating threads on this site but in some respects this one takes the cake - even if there are both good and bad connotations/impacts to what’s being discussed.

I have been poking through posts this morning as I was looking at some of the feedback/resorts for mountains I hadn’t skied and/or might not know quite as much about such as Taos or Telluride (although I know about their clinics) Whitefish, maybe Bend (although I knew about the tech impact out there) etc..

My wife and I have been talking about a home on the slopes - offset initial 5-7 years in renting - but ideally one we would live in part of the year (as I’ve always worked remote anyway). So I needed some mountains to consider outside of the obvious Tahoe, Summit Cty, Utah, even Bozeman was on the list. So I guess in some ways I’m part of the problem (Even if I’m coming from East coast vs the west).

Over the last few hours I’ve literally read through every post - dreary rainy day. IF you break all the items down you sort of hear our economy at scale:
  1. Increasing housing creating more wealth but also wealth disparity and this is happening everywhere not just ski towns
  2. Soaring tuition rates creating downstream impact on the younger generations but also many of their parents
  3. Changing talent dynamics - not only the obvious WFH - which has been growing dramatically over last decade and now only accelerated while also increasing wealth divide - but also “The Great Resignation” 50% plus of americans switching or leaving jobs in next year, all of this while employers are struggling to keep positions filled or even hire. Hell Apple just offer $180k stock bonuses ot keep engineers from leaving and while thats on the extreme end it’s not an uncommon practice to see employee perks/bonuses soar in white collars space.
    1. Many 55+ folks exited work all together as well which has shrunk the skilled labor pool.
    2. Probably worth pointing out WFH has also shifted not only second homes but modifications to existing homes treating the boom in craftsmen work also.
  4. Younger generations struggling to get started, build wealth, or as many in this thread put it to get ahead what was once considered normal.
    1. As a separate note it’s also worth calling out that the greatest wealth transfer in American history is about to happen with the passing of boomers. So despite everything else that alone is reason to suspect none of what’s going on is likely to slow down anytime soon.
All of that amounts to essentially a shrinking / and also more spread economically middle class. Too hefty of a topic but all that leads back to WFH. I’ve worked from home near a decade now and also sales/consulting with big enterprises. I’ve watched this trend grow each year and one of the primary hold backs was legacy leadership concernes about productivity. Well the pandemic has forced that change and productivity has not been hit and thats with childcare being an issue. As childcare solutions are solved (covid hurt this) you’ll see that trend even get better.

Collaboration some may think are an issue but for those who have worked from home for a long time will tell you it’s just a skill and a skill that can be taught / learned. I’ve introduced more people at our HQ to each other than has ever happened ot me, and even consulting with big companies you quickly learn half the time they don’t know people in their own company or even among their own teams they’ll be spread out across Atlanta, NYC, Columbus, Charlotte etc…. So it’s not like they are working side by side anyway.

We are two years into the pandemic, behaviors have been set, workers want/demand flexibility (one of the top if not number one reason cited when leaving jobs lately) and with the great resignation going on WFH isn’t like to change soon. After 3-5 years of WFH it’s then a norm. Which leaves one prime issue left to solve with WFH. Innovation - this is probably the toughest to solve but given the previous facts companies will figure it out.

On the housing side in and out of ski towns there are a lot of similarities:
  1. Housing starts in November/decemebr were down but inventory is still low. If this continues maybe the obscene growth stops but it doesn’t appear likely To reverse course and values drop. This especially true with mortgage rates where even if the went from 3.25% to 5% - which is highly unlikely and a big jump at that - it still wouldn’t cause a large enough shift out there.
  2. Also worth noting even outside of ski towns houses are going obscenely quick, cash offers (yes some private equity firms) but many investors from the middle/upper lower class who have less potential places to put that cash and earn a return than they did some years ago. Real estate at large has become a key focus for investments everywhere.
  3. In ski towns, yes SRT has created a bigger growth in this but even if SRT benefits were cut 30% in profits, it’s still beating LTR benefits and people aren’t likely to find an alternative source that could match that, at least as safely. It also seems unlikely towns kill SRT completly because it could really destabilize home prices which would hurt the local economy in entirely different ways. And more candidly if you look at the east / west coasts and how zoning laws work you can see the older generation, those in office and in power, tend to be loath to completely kill there own wealth.
  4. Finally those expecting a crash like 08. Something to keep in mind we don’t have the crazy lack of underwriting occurring then, the subprime market was out of control, on top of the individual market you also had mortgage back security compounding the issue, and lets not forget fun balloon payments. During the Great Recession median housing prices nationally fell 9.5%, some areas hit harder but those areas like Naples rebounded more quickly. None of that is occurring now so it’s unlikely to be near as big of a crash. And bluntly speaking lets say 10% correction in ski towns, does that really solve affordable pricing issues for people on a 750-1million home for those that can’t afford?
I realize this probably too hefty post (overly thoughtful I guess today as I look to my own middle age plans in the future) but it’s sort of a long winded way of saying even if a correction does come it’s unlikely to solve this problem for ski towns or frankly for the younger generation - weird saying that as an older millennial - with lots of little changes that hopefully lead to some type of workable solution. It’s a complex enough problem, and not a localized issue when you really look at everything nation wide, to realize it’s unlikely to be a silve bullet fix or even a quick fix.

It saddens me that I’ll likely be part of the problem but my parents are snowbirds - I have no desire to live in Florida in the winter. Mountain ski home with fresh air keeping me alive longer on the other hand…..

Anyway apologies for the crazy long, heavy post. For whatever reason this thread really stuck me in a lot of ways this morning. Wish I had seen it earlier this year. But with ski season being demolished last year iH ave to admit I was not on here As much.
Interesting observations, one thing that might have an affect on the housing market is if inflation get very bad and people have to sell their second home in ski country. That might create an opportunity to get some real estate at a reduced rate if the inflation hasn't hurt you as bad as others.
 

MikeW Philly

Getting off the lift
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Interesting observations, one thing that might have an affect on the housing market is if inflation get very bad and people have to sell their second home in ski country. That might create an opportunity to get some real estate at a reduced rate if the inflation hasn't hurt you as bad as others.

I struggle though to imagine inflation forcing somebody to sell a second home. That’s a bigger impact on fixed income or tight budgets. One of reasons people want their cash in properties is appreciation and inflation makes that more true.

If they were living near the edge - maybe. But seems like they would rent it first.
 

Uncle-A

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I struggle though to imagine inflation forcing somebody to sell a second home. That’s a bigger impact on fixed income or tight budgets. One of reasons people want their cash in properties is appreciation and inflation makes that more true.

If they were living near the edge - maybe. But seems like they would rent it first.
Sometimes the people that have two homes are living close to the edge budget wise. It might surprise you, just let one major repair be needed and the house ends up on the market.
 

Sibhusky

Whitefish, MT
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I think the thing that causes people with 2nd homes (and even primary homes) in ski towns to sell up is property taxes. We had some major issues back in the mid- to late- 2000's because of sharply increased property valuations forcing long-time owners to move or go bankrupt. Some changes to valuation frequency have helped, but not totally. We were fortunate. The increases were around the lake area and our taxes actually went down. But this go round the increases are everywhere in the metro and recreational areas of the state, so I'm guessing the decreases will be few.

Many of the now million $ plus places around here now are just regular houses. The owners aren't wealthy. If they "cash in" where are they going to have to live? Iowa? For us, our property taxes so far are still less than we paid 20 years ago for a condo in NJ, but if they suddenly quadruple, it's going to be a big issue. And it could happen.
 

MikeW Philly

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Sometimes the people that have two homes are living close to the edge budget wise. It might surprise you, just let one major repair be needed and the house ends up on the market.
It definitely happens. But with all underwriting changes I’d be shocked if this is happening anymore especially to recent buyers (peoples whose jobs changed over time is another matter). For a second home you are looking at minimum 20-25% down which means $140-$150k up front (in a lot of ski towns if not more) and you have to show you can support it these days.

Nationally foreclosures haven been heading down quite a bit:

1C234508-C02C-4B0E-B0CE-C1CDB35C0D43.jpeg

I think the thing that causes people with 2nd homes (and even primary homes) in ski towns to sell up is property taxes. We had some major issues back in the mid- to late- 2000's because of sharply increased property valuations forcing long-time owners to move or go bankrupt. Some changes to valuation frequency have helped, but not totally. We were fortunate. The increases were around the lake area and our taxes actually went down. But this go round the increases are everywhere in the metro and recreational areas of the state, so I'm guessing the decreases will be few.

Many of the now million $ plus places around here now are just regular houses. The owners aren't wealthy. If they "cash in" where are they going to have to live? Iowa? For us, our property taxes so far are still less than we paid 20 years ago for a condo in NJ, but if they suddenly quadruple, it's going to be a big issue. And it could happen.

Property taxes is a big one. Lot of beach front properties have experience this. The downside primarily is that‘s hitting people who bought before the spikes - so the locals and/or long term owners.

Which sort of brings the whole mess full circle.
 

MikeW Philly

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The other thing to is some areas are being targeted for business growth. Austin is an obvious one for most of country and their property values have shot up massively.

But there are others. For example I’ve seen Utah / SLC greater area mentioned a lot and even that is unlikely to slow (water issues could impact if not resolved but then the people there have different issue). That whole area has become SiliconSlopes and quite a few tech companies or start-ups have moved into SLC. No reason it will be slowing in the next decade either (Hence the airport expansion).
 

Uncle-A

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The graph is interesting, the only year I think is off is 2020. Wasn't there a moratorium on foreclosure due to the pandemic? The prices in NYC have been dropping although I don't know how many people have second homes in the city. The houses on the beach that are damaged from Super Storm Sandy went on the market without even being repaired. The owners didn't have the funds to do the repairs and could not afford the flood insurance and if the house is a second home they could not get some of the federal aid. Some are still empty and unrepaired to this day.
 

scott43

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The issue of property valuations, property taxation and retired peoples is a big deal sometimes. Seniors who have lived in their home for 30 or 40 years, raised a family, being forced out because they happened to have chosen wisely in a good area and have seen their homes appreciate a great deal. Now they have significant taxation burden and very little income to combat it. I don't know what the solution is. I think it's somewhat unethical to force seniors to leave their homes for this reason. I don't know how you build a system to prevent it without pissing off someone else.
 

MikeW Philly

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The graph is interesting, the only year I think is off is 2020. Wasn't there a moratorium on foreclosure due to the pandemic? The prices in NYC have been dropping although I don't know how many people have second homes in the city. The houses on the beach that are damaged from Super Storm Sandy went on the market without even being repaired. The owners didn't have the funds to do the repairs and could not afford the flood insurance and if the house is a second home they could not get some of the federal aid. Some are still empty and unrepaired to this day.

So it’s probably why 2020 was ultra low for sure. It was more to show the trend.

NYC prices have dropped some but they still are high. As to Sandy thats primarily due to how flood insurance works. MOst homeowners exclude flooding caused by storms or hurricane. Some might have opted for an additional National Flood Insurance Plan (highly regulated and less used pre Sandy) and the payout is $250,000 for property damage and $100,000 for possessions lost in flooding. When you consider cost of clean-up alone you could be out a lot of the insurance if not all. Then full rebuild in probably a more expensive market. Touch scenario and unless you can plop down cash of a million good luck.

The issue of property valuations, property taxation and retired peoples is a big deal sometimes. Seniors who have lived in their home for 30 or 40 years, raised a family, being forced out because they happened to have chosen wisely in a good area and have seen their homes appreciate a great deal. Now they have significant taxation burden and very little income to combat it. I don't know what the solution is. I think it's somewhat unethical to force seniors to leave their homes for this reason. I don't know how you build a system to prevent it without pissing off someone else.

Agreed. But how to fix it is the big problem.
 

MikeW Philly

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Funny enough just popped up in my feed: 2021 Was One Of The Best—And One Of The Toughest—Years For Housing. 2022 Will Not Be So Different.

Lots of good info but this stood out:

”Many of the underlying conditions driving house prices in 2021 remain intact in 2022. Modeling a wide range of scenarios for the macroeconomic environment, Chandan Economics’ baseline housing forecast shows price appreciation slowing, but still outpacing household income growth. For first-time and income-constrained buyers, affordability will deteriorate further this year, even as supply constraints begin to ease.”
 

scott43

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Agreed. But how to fix it is the big problem.
Yeah my buddy's mum is living in a house worth $2m or so paying $14k in property tax a year. Fortunately she's well-heeled and can deal with it but lots aren't. She just happens to live in a skyrocketing neighbourhood and he's vehement that she should be given tax breaks. Part of me is, yeah..for sure. Part of me is, we frame property taxes based on valuation, not the cost of actually servicing the lot. Soo.... It sucks.
 

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