End of Fall?

September and October are typically two of the prettiest months in the mountains. And this October has been exceptionally beautiful. The past couple of weeks have been spectacular with days in the lower 60s, and cold nights. The perfect weather for hiking, biking and even late season golf. It seems like the entire town has been outside taking advantage of these days, as we know that long winter is about to arrive. The NWS forecast is for the weather to turn this Friday, with rain turning to snow over the weekend and continuing well into next week.
With the world financial market continuing to be in disarray, our local real estate market also continues to be vulnerable to market uncertainty. While there have been buyers surfacing to take advantage of tremendous deals, others have seen their net worth diminish significantly and are having to pull back from second home purchases. For those who understand the real estate market, and that it will turn around and prove to be a terrific investment, there are tremendous opportunities right now. Here are links to three different articles that have been written in national publications on the opportunities to invest in vacation properties.

5 Timely Reasons to Invest in Vacation Property;
Wallstreet a Faceplant for Skiers?;
Talking Points: Second Homes

Even amidst all the turmoil, construction on new ski properties in Deer Valley continues. The St. Regis Hotel, in the Deer Crest area of Deer Valley, is moving right along. The St. Regis is a little over 50% sold out and is expected to open for next year’s ski season. Nakoma is an 18 unit subdivision of ski-in/ski-out homes in the Empire Pass area of Deer Valley. Of the nine homes in the first release, five are sold, and most of these should be completed and closed this ski season. These homes are around 5,500 square feet, have spectacular views of the new Lady Morgan Lift, and have prices starting at $5,600,000. The Montage Hotel is also moving forward with construction, with an expected completion date sometime in 2010. While there has not been any release of the number of units, the layout or prices, a waiting list for purchasing is growing.
All three local ski areas are wrapping up their summer projects, have tested their snow making systems, and are ready to make snow as soon as the temperatures drop low enough. While advanced reservations are running slightly behind this time last year, we feel that once the snow arrives, bookings will increase. History has shown us that skiers are making their reservations closer and closer to the actual dates of their trip so as to see where the best snow is and who has it. Fortunately, Utah is geographically situated to receive dependably abundant amounts of snow. This year in particular we feel that the ease of getting to the Utah ski resorts will make us even more attractive to the destination skier. We expect to see more long weekends, and less week or longer stays. For visitors coming for only a three or four day stay, the fact that they can fly direct to Salt Lake City from almost anywhere in the country, and be here in about 4 hours, gives us a unique advantage over the other Rocky Mountain ski resorts.

Interesting Times

The wild fluctuations in the stock market in recent weeks have created a lot of uncertainty in the real estate market. While I hear too common phrases among potential buyers, “The money that I expected to use for a real estate purchase has gone with the drop in the stock market” and “I want to wait for things to calm down before I make a move”.
Last week Warren Buffet wrote an interesting article on why he is investing his personal money in the stock market and I feel that his thoughts also relate to real estate as an investment. Mr. Buffet had a great comment last week, stating that “When others are greedy, be fearful. And when others are fearful, be greedy.” To paraphrase Mr. Buffet on another comment, “I cannot tell you where the real estate market will be next month, in six months, or even next year. But what I can tell you is that this will pass and real estate prices will once again increase.”
Right now savvy real estate investors are purchasing. Today’s buyers are looking to purchase at rock bottom prices and while not every seller is willing to discount severely, enough are. The real estate investor understands that this is an excellent time to purchase real estate as long as they are comfortable holding on to it through this temporary down turn. While we have seen many individual stocks loose 50% or even more of their value, we see real estate values holding strong. If real estate prices drop 15% in a given market it is usually headline news. So the conventional wisdom of purchasing in troubled economic times certainly holds true for resort real estate.
On a lighter note, we continue to enjoy a spectacular autumn here in Park City. Sunny days, beautiful fall colors and snow on the higher peaks have brought many of the locals out for hiking and mountain biking. I spent the weekend hiking the local mountain trails and can attest to the beauty.
The resorts are quickly putting the finishing touches on their summer projects in anticipation of another great ski season. Make your plans for this winter to come and visit Park City and experience all that we have to offer.

Winter...an impatient season in Park City

These photos were taken on October 12, 2008. Click here to view.

Fall Colors

It is that magical time of year when the mountains appear to be on fire from the brilliant fall colors. The aspens are at about their peak, brilliant gold and reds cover the mountainsides. This is one of the most beautiful times of the year in the mountains and we all make sure to take advantage of these days by either driving through or going hiking. This past weekend we also had our first significant snow of the year. So to see the brilliant colors contrasted with white mountain tops is something to behold. Click here for photos. http://www.flickr.com/photos/31150024@N03/show/

This past week’s economic news has sure made for interesting times in resort real estate. While people still are looking for a ski property for this winter, many are either nervous or are cautious, waiting to see what will happen. This is all very understandable as many investors have seen their portfolios drop in value. Real estate however, continues to hold its value and in many cases is a far more stable and safer investment. This past week we have seen stocks in companies such as AIG, Lehman Brothers, etc. drop 80 – 90%. During the same time the real estate headlines throughout the country shout that some markets have dropped by as much as 20%. As a result, we are seeing a number of investors moving from the stock market to real estate as a hedge for their money.

Over the weekend there was an AP article in a San Jose newspaper talking about the stability of the resort real estate markets and that the latest edition of Forbes Magazine listed Aspen, Colorado and Coeur D’Alene, Idaho among the best places to invest right now. Here is a link to the article. http://www.mercurynews.com/markets/ci_10630080

Over the past couple of weeks I have had several interviews with our local radio, TV stations and newspapers, all wanting to know how the real estate markets in the western resorts are fairing. The simple answer is that we are holding our own. While the number of sales is currently off (40 – 45% for most of the resorts) the actual sold prices are holding up. Prices in the resorts are flat to slightly up for the first half of the year. This reinforces my belief in resort real estate as a safer investment during turbulent times. We saw this in 2001 right after the September 11 attacks on the World Trade Center, where the stock markets dropped considerably and were extremely volatile. At that time we had just come off of a very strong real estate run and had just witnessed the dot.com bubble burst. Once again, through all the turmoil, resort real estate held its own and by 2003 was rebounding. It will be very interesting to see what happens this time.

KPCW Radio Interview

On September 18 I had an interview with KPCW, our local Park City station, and was asked to speak about the Rocky Montain Resorts. Click on the link below to listen to this interview.

http://www.pcboardofrealtors.com/FilesGeneralMembers/Statistics/RMRA/Dennis%20Hanlon%20Presentation/dennis_hanlon_9-18.mp3