Non Region Specific Ski Town Real Estate

[Bolder]

Interesting post especially because even though it's from a European perspective, it's not much different from what many of us would conclude in the USA.

Most reports I've following in the media seem to say real estate will continue to be a sellers market for several years ahead. But about a month ago I had a talk with a friend who is a mortgage lender. He was all doom and gloom and said that when all the mortgage forbearance ends in the USA it will cause a downturn in real estate with a flood of houses entering the market. He also thought this crisis would also negatively impact the stock market. Bottom line, none of us really know what's going to happen and that was before the wild card of the pandemic hit the scene.

Yes, pretty much the same market conditions apply right now. Everything in France except in the cities has shot through the roof, as it were. Mortgage rates are still really low, i.e. 1-2%, but you'll still need to put down 30% and can't get a 30 year mortgage, so it evens out. The one thing that is different is that a lot of French people have second homes by default, otherwise known as Mom and Dad's house...and there are some complicated inheritance rules that can make it near impossible to sell if there are multiple heirs.

Never easy decisions. We once moved a chunk of money to France and spent two months looking at houses. Ended up just renting the same house for some of the off season every year for 12 years. We negotiated some garage space for bikes etc and it worked out well for both parties. I've got to say though, buying a house in France is a bit more complicated.

I wouldn't say it's more complicated than in the US, just different. Here you go through a notary rather than a lawyer, but the same basic process applies: Make offer, draw up contract, secure financing if you need it, then close. Generally you'll pay around 8% of sale price as a buyer for taxes and notary fees etc. But we're French citizens so I know how the system works, at least a little bit...

 

[Jerez]

A conundrum. We want to retain that small town feel but bemoan zoning laws and conservation easements. Those are the tools to help prevent "BozeAngeles". Sure housing prices shoot up but eventually the uber rich will get bored and head back to cities once restaurants and theaters and museums etc. become attractive destinations again.

There are still small towns near ski areas but I am not naming them!

Been thinking about the issue of STRs because we bought one as a second home to ski from without having to bunk in with cousins during Covid. I remember when some of us used to complain about all those 2nd houses sitting empty 80% of the time and that was driving unecessary land development. maybe it is my own need for justification, but isn't it better to have fewer houses occupied more?

No easy answer to affordability without creating ghettos for workers. Whatever the solution is, it ideally ought to promote a long term residence and have workers be a part of the community and not itinerant.

 

[Jim Kenney]

No easy answer to affordability without creating ghettos for workers. Whatever the solution is, it ideally ought to promote a long term residence and have workers be a part of the community and not itinerant.

I spent the month of March 2015 living in a condo in Silverthorne. I had my car with me and used it to visit a variety of nearby ski areas. But one morning just for grins I caught the Summit Stage from Silverthorne to go ski at Keystone. It wound around Dillon for 45 mins making numerous stops. I found out how many old condo developments there are in Summit County and foreign workers poured out from them to catch that bus.
I think the housing situation for the big resorts is that they either have a handy supply of old condos nearby or it will become mandatory that they build large complexes like college dormitories to house their seasonal employees.

 

[Jerez]

I spent the month of March 2015 living in a condo in Silverthorne. I had my car with me and used it to visit a variety of nearby ski areas. But one morning just for grins I caught the Summit Stage from Silverthorne to go ski at Keystone. It wound around Dillon for 45 mins making numerous stops. I found out how many old condo developments there are in Summit County and foreign workers poured out from them to catch that bus.
I think the housing situation for the big resorts is that they either have a handy supply of old condos nearby or it will become mandatory that they build large complexes like college dormitories to house their seasonal employees.

You are probably right, but it is a sad state. Unless we can give young families a "home" in a ski town, worker issues will be a perennial problem.

 

[tball]

I think the housing situation for the big resorts is that they either have a handy supply of old condos nearby or it will become mandatory that they build large complexes like college dormitories to house their seasonal employees.

Have you seen what old condos cost?

The average price condo in Summit County, CO is up to $743K! That's up from $399K when you were here in 2015.




That Land Title Company report has a great breakdown showing more buyers come from the front range than any other area:



And, why the contempt for Texans :

https://ltms.ltgc.com/wp-content/uploads/2021/12/SUMMITNOVEMBER-2021.pdf

 

[MikeW Philly]

Have you seen what old condos cost?

The average price condo in Summit County, CO is up to $743K! That's up from $399K when you were here in 2015.

It’s fairly in line with the rest of the US though. Since 2015 median home price is up about 75% nationally. So little higher there but not by much.

But thats the big issue home affordability anywhere These days.

 

[tball]

It’s fairly in line with the rest of the US though. Since 2015 median home price is up about 75% nationally. So little higher there but not by much.

No doubt. The problem is the prices were already unaffordable for most high country locals to begin with, so the increases make the situation much worse.

Just guessing, but the average $743K condo in Summit County is probably 950 SF and 20 years old. Tough for local families to make it work.

 

[jmeb]

Just guessing, but the average $743K condo in Summit County is probably 950 SF and 20 years old. Tough for local families to make it work.

Hell, not just local Summit families...but most any working families that don't have access to intergenerational wealth or have gotten lucky with equity in something.

My wife and I now have a ~200k combined income. Sounds like a great deal of money until you consider student loan obligations and the cost of housing. I was "lucky" enough to buy a 1000sqft (2/1) home 5 years ago in Denver for 300k. Now that we earn more and both work from home permanently, we would love to a) have more space (one of us works in spare bedroom, the other in the laundry room) and b) live in the mtns. But doing both of those without spending 700k plus is...challenging.

I can't even imagine trying to add kids to that picture.

 

[jmeb]

And to add to ^^....this doesn't even begin to wrestle with the ethics of moving to a Colorado mtn town at the moment -- further pushing prices up and further making it difficult on existing locals and those earning far more modest wages.

As much as I may want to as someone who volunteers at a mountain ~30 days a year, and as someone who works in the snow industry.

 

[Cameron]

Hell, not just local Summit families...but most any working families that don't have access to intergenerational wealth or have gotten lucky with equity in something.

My wife and I now have a ~200k combined income. Sounds like a great deal of money until you consider student loan obligations and the cost of housing. I was "lucky" enough to buy a 1000sqft (2/1) home 5 years ago in Denver for 300k. Now that we earn more and both work from home permanently, we would love to a) have more space (one of us works in spare bedroom, the other in the laundry room) and b) live in the mtns. But doing both of those without spending 700k plus is...challenging.

I can't even imagine trying to add kids to that picture.

We bought our house in suburban Ohio in 2014. We make substantially more now but would struggle to afford our home at today's prices. I imagine we can't be far away from 40 or 50 year terms on mortgages to make home ownership appear more affordable like they've done with cars. A couple years ago I was in hopes we would have enough equity in the house to buy a condo in the mountains and a house at the beach when we retire but the way prices keep climbing I think we might struggle to pull off even one of those.

 

[Jerez]

I read lately that there is a surge in investment $$ in building to rent housing. Maybe that will emerge as a trend. Home ownership may not be a realistic goal in an economy and culture that is transient. Just speculating. But may not be a terrible thing.

 

[Pat AKA mustski]

I still think Covid continues to skew the market. As long as there are large #s of people with WFH options, STRs will be in high demand. Right now, the market is being influenced by abnormal job mobility. A change will come at some point. However, resort employers are going to have to look at employee housing. It’s too hard to get employees for minimum wage positions if they can’t afford the rent.

 

[Bolder]

I still think Covid continues to skew the market. As long as there are large #s of people with WFH options, STRs will be in high demand. Right now, the market is being influenced by abnormal job mobility. A change will come at some point. However, resort employers are going to have to look at employee housing. It’s too hard to get employees for minimum wage positions if they can’t afford the rent.

I think the WFH change is permanent. We're realizing just how much time you waste commuting to an office full of fellow nincompoops who dragoon you into endless meetings where you can't even mute the loudmouth or wear sweatpants...if even 10% of white collar workers can work from anywhere, it will permanently skew the market. I love living in cities but if the choice was between spending $1 million for a 2 br apartment in Brooklyn or $1 million for 5 acres in New Hampshire, I know damn sure where I'd be.

 

[Wasatchman]

What do people think should be the right city planning for mountain towns? Building more housing and cheaper high density helps supply and affordability, but has the impact of turning mountain towns into mountain cities. It's not an easy balance for city planners and councils to navigate.

 

[chris_the_wrench]

Most of the land that is still private is on the valley floor. And even some of those farms are selling their development rights to conservation entities. So there's not much population, but there's not as huge an amount of developable land as you might think. Flathead County has a history of allowing anyone to pretty much do anything and I think that's why folks have been acting outside of zoning to protect land, because the zoning pretty much does not.

There’s the Jones family who own 18% of the private land in Flathead County, I cant even imagine what their real estate portfolio is worth now. Also the the influence over development they hold.

Regarding our local timber lands, some of my favorite huckleberry and mushroom spots are on timber land, Im pretty happy with how they are self regulating themselves for conservation(its good ‘business’ for them too).

 

[jmeb]

I still think Covid continues to skew the market. As long as there are large #s of people with WFH options, STRs will be in high demand. Right now, the market is being influenced by abnormal job mobility. A change will come at some point. However, resort employers are going to have to look at employee housing. It’s too hard to get employees for minimum wage positions if they can’t afford the rent.

I think the WFH change is permanent.

Agree with Bolder. I expect there will be some back to offices in the future. But it is going to look very different in magnitude and style than it did before. The belief that this is just a crush phase for mtn towns is misguided IMHO. It's a phase...the beginning of massive population expansions in places with access to outdoor amenities and decent climate.

 

[Pat AKA mustski]

WFH is only one part of the equation; schools are back in person this year so families don’t have the freedom of movement they did last year. Weekdays up here look more like a weekday pre Covid and STRs are not full 7 days a week - holiday weeks excepted. We’ll have to see how it looks this summer as BB is often as busy in summer as in winter.

As for employee housing… there are a lot of possible looks for that. Currently local businesses have joined with the city council and are attempting to work deals with second home owners and STRs to provide inexpensive housing for seasonal workers. It’s similar to a model Telluride has been using. Employers pay owners stipends to let them place employees in the houses when unoccupied, guarantee the rent and the condition of the property. Employees have to shuffle around if the property is being used to one that isn’t. I don’t see how that will work at all for full time employees who live up here year round.

 

[Jerez]

WFH is only one part of the equation; schools are back in person this year so families don’t have the freedom of movement they did last year. Weekdays up here look more like a weekday pre Covid and STRs are not full 7 days a week - holiday weeks excepted. We’ll have to see how it looks this summer as BB is often as busy in summer as in winter.

As for employee housing… there are a lot of possible looks for that. Currently local businesses have joined with the city council and are attempting to work deals with second home owners and STRs to provide inexpensive housing for seasonal workers. It’s similar to a model Telluride has been using. Employers pay owners stipends to let them place employees in the houses when unoccupied, guarantee the rent and the condition of the property. Employees have to shuffle around if the property is being used to one that isn’t. I don’t see how that will work at all for full time employees who live up here year round.

Poor schmucks. That sounds just awful, having to surf from house to house. But better than a tent. Still, it encourages transient-ness (is that a word?). When what communities really need are workers who want to actually live there.

I do not have the answer. One friend has tried to get NREL to partner with Grand County to put up carbon-neutral prefab housing on city owned land, but I don't think it has traction. The city can lease it for commercial for way more money. We'll see.

 

[MikeW Philly]

WFH is only one part of the equation; schools are back in person this year so families don’t have the freedom of movement they did last year. Weekdays up here look more like a weekday pre Covid and STRs are not full 7 days a week - holiday weeks excepted. We’ll have to see how it looks this summer as BB is often as busy in summer as in winter.

As for employee housing… there are a lot of possible looks for that. Currently local businesses have joined with the city council and are attempting to work deals with second home owners and STRs to provide inexpensive housing for seasonal workers. It’s similar to a model Telluride has been using. Employers pay owners stipends to let them place employees in the houses when unoccupied, guarantee the rent and the condition of the property. Employees have to shuffle around if the property is being used to one that isn’t. I don’t see how that will work at all for full time employees who live up here year round.

WFH is only part of the equation but it doesn’t take much of a percentage of the population to impact resort areas. And since people are waiting to older ages to have kids, if they have them, more can afford these types of homes.

Super lengthy article but I wouldn’t expect those who have been splitting their time in resort towns to disappear all of a sudden. Even if companies tried to force people away from hybrid/remote work it’s unlikely to work: https://www.forbes.com/sites/jackke...tract-and-recruit-top-talent/?sh=22bedeee7aff

 

[Pat AKA mustski]

More can afford these type of homes BUT they bought during a season where demand for STRs was 7 days a week or monthly. When that demand drops, many will sell these properties because they don’t want payments that high without the supplemental income. I’m not talking about Aspen or Vail or slopeside properties that were well established pre pandemic.I am talking about all the rural areas in America that boomed suddenly during Covid. There will be a real estate correction and second homes will drop first and fall furthest. They always do.