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.
Monday, October 20, 2008
Tuesday, October 14, 2008
Winter...an impatient season in Park City
These photos were taken on October 12, 2008. Click here to view.
Monday, October 6, 2008
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.
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.
Friday, October 3, 2008
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
http://www.pcboardofrealtors.com/FilesGeneralMembers/Statistics/RMRA/Dennis%20Hanlon%20Presentation/dennis_hanlon_9-18.mp3
Monday, September 22, 2008
NEIGHBORING RESORTS
This past week, I had the opportunity to travel to Sun Valley, ID to meet with their agents as well as representatives from Jackson Hole, WY and Steamboat Springs, CO. This gatherings are always extremely informative as we exchange information on our respective markets and resort issues.
Sun Valley is going through some interesting times as they are finally looking to grow and build hotels near the resort in Ketchum. While I was there, their city council approved the first new hotel and are considering another three applications. This will be a major boost for their economy as Sun Valley is lacking in high quality accommodations. they are also looking at building a new airport 'down valley'. While this will allow for more reliable air transportation and allow for larger planes to fly in, it is being fought as the airport will be about 30 miles from the resort. Many fear that this will be just too far away for visitors.
Jackson Hole has developed the village at Teton, the base of the ski resort. they now have three spa resorts, including a Four Seasons. they have also just completed a new 9 hole golf course with home sites beginning to sell. After coming off of record years of real estate sales from 2005-2007, this year has started slow and they are down about 45% in number of transactions. This is pretty much the story that I am hearing from all of the resorts in the Western stats. However, the actual sold prices seem to be holding pretty steady.
The Steamboat Springs resort had been owned by American Ski Corporation, the same owners of The Canyons resort in Park City. ASC sold Steamboat two years ago to Intra West and this has been a positive move. Intra West has built new condos at the base of the resort as well as in the downtown area. As with many resorts, Steamboat is struggling with balancing growth with preserving open space and quality of life.
Going into the ski season, everyone is cautiously optimistic about real estate sales. Particularly here in Park City, we have seen an increase in interest and sales for the past six weeks. It appears that many buyers are looking to pick up a ski property prior to the upcoming ski season, and feel that with the slower market, this may be the right time to purchase. While I have not seen many "fire sales", sellers are certainly looking at offers and are coming off of their asking prices. This is an excellent time to take advantage of a slower market going into the ski season.
Sun Valley is going through some interesting times as they are finally looking to grow and build hotels near the resort in Ketchum. While I was there, their city council approved the first new hotel and are considering another three applications. This will be a major boost for their economy as Sun Valley is lacking in high quality accommodations. they are also looking at building a new airport 'down valley'. While this will allow for more reliable air transportation and allow for larger planes to fly in, it is being fought as the airport will be about 30 miles from the resort. Many fear that this will be just too far away for visitors.
Jackson Hole has developed the village at Teton, the base of the ski resort. they now have three spa resorts, including a Four Seasons. they have also just completed a new 9 hole golf course with home sites beginning to sell. After coming off of record years of real estate sales from 2005-2007, this year has started slow and they are down about 45% in number of transactions. This is pretty much the story that I am hearing from all of the resorts in the Western stats. However, the actual sold prices seem to be holding pretty steady.
The Steamboat Springs resort had been owned by American Ski Corporation, the same owners of The Canyons resort in Park City. ASC sold Steamboat two years ago to Intra West and this has been a positive move. Intra West has built new condos at the base of the resort as well as in the downtown area. As with many resorts, Steamboat is struggling with balancing growth with preserving open space and quality of life.
Going into the ski season, everyone is cautiously optimistic about real estate sales. Particularly here in Park City, we have seen an increase in interest and sales for the past six weeks. It appears that many buyers are looking to pick up a ski property prior to the upcoming ski season, and feel that with the slower market, this may be the right time to purchase. While I have not seen many "fire sales", sellers are certainly looking at offers and are coming off of their asking prices. This is an excellent time to take advantage of a slower market going into the ski season.
Monday, September 15, 2008
#1 Again
For the second year in a row and the 4th out of the last 8 years, the readers of Ski Magazine have voted Deer Valley as the # 1 ski resort in North America! Deer Valley was ranked ahead of Vail,# 2 and Whistler/Blackcomb # 3. Deer Valley's founder, Edger Stern, built the resort on the premise that skiers are looking for more than just a place to put on skis and slide on a mountain. Edger put customer service as his top priority and the results have paid off. Today's guest has come to expect a superior level of guest service, from the ski instructors, to lift attendants, to restaurant employees, to grooming. Deer Valley consistently is ranked the # 1 resort in these categories. Even though the resort has a reputation as being a 'tame' mountain, (wrongly so), our guests are looking for a vacation experience for the entire family. (if you are under the impression that Deer Valley is just a groomed intermediate mountain, come spend a day skiing with me)
Park City Mountain Resort climbed from # 6 last year to # 5 this year, and The Canyons moved from # 18 to # 13. With our consistent and high quality snow, ease of getting here, a vibrant town and many high quality restaurants, visitors realize that Utah and Park City can always be counted on for a wonderful experience. The October issue of Ski Magazine comes out later this week and it is the most read issue of the year. Skiers are now planning their vacations for the year and are looking for the poll, but more importantly, the readers comments on their experience. When reading the polls, it is interesting to see that the visitor is looking for more than just skiing. They are looking for town, a variety of activities other than skiing, quality lodging, and ease of travel. We are finding that travel has become so cumbersome lately, that families are looking for resorts with direct flights. Having to make connecting flights to resorts, with airline delays, weather delays and the hassle of the airports is just not acceptable any longer. Salt Lake City, with it's international airport and only an easy 30 minute drive to Park City makes us the easiest resort to visit in the West.
Park City Mountain Resort climbed from # 6 last year to # 5 this year, and The Canyons moved from # 18 to # 13. With our consistent and high quality snow, ease of getting here, a vibrant town and many high quality restaurants, visitors realize that Utah and Park City can always be counted on for a wonderful experience. The October issue of Ski Magazine comes out later this week and it is the most read issue of the year. Skiers are now planning their vacations for the year and are looking for the poll, but more importantly, the readers comments on their experience. When reading the polls, it is interesting to see that the visitor is looking for more than just skiing. They are looking for town, a variety of activities other than skiing, quality lodging, and ease of travel. We are finding that travel has become so cumbersome lately, that families are looking for resorts with direct flights. Having to make connecting flights to resorts, with airline delays, weather delays and the hassle of the airports is just not acceptable any longer. Salt Lake City, with it's international airport and only an easy 30 minute drive to Park City makes us the easiest resort to visit in the West.
Wednesday, August 27, 2008
Consumer outlook up, housing bottom may be near
By ANNE D'INNOCENZIO
NEW YORK -Americans felt better about the economy in August, as a barometer of sentiment posted the biggest boost in two years amid falling gas prices. Two reports suggested that a bottom could be nearing for the housing market, but economists caution it's too early to proclaim that the worst is over.
The Conference Board, a private research group, said Tuesday that its consumer confidence index rose to 56.9, up from a revised 51.9 in July. That's the largest gain since August 2006, and is ahead of the 53 expected by economists surveyed by Thomson/IFR.
It's also the second month in a row that sentiment improved, after a six-month slide since January — but it remains about half what it was a year ago, and worries about the job market persisted.
"It's still too early to call a bottom" on both confidence and housing, said Gary Thayer, senior economist at Wachovia Securities.
The Standard & Poor's/Case-Shiller U.S. National Home Price Index released Tuesday showed home prices dropped a record 15.4 percent during the second quarter. However, the rate of single-family home price declines slowed from May to June, a possible silver lining.
Sales of new homes rose in July, but still fell short of economists' expectations, and home prices continued to sink. Still, the July increase followed a sharp downward revision to June's sales.
"Consumer confidence readings suggest that the economy remains stuck in neutral, but may be showing signs of improvement by early next year," Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. However, "overall readings are still quite low by historical standards, and it is still too early to tell if the worst is behind us."
Economists and investors closely monitor consumer sentiment as consumer spending represents about two-thirds of all economic activity.
Falling gas prices in recent weeks helped boost consumers' mood, Franco said. Gas prices have dropped 15 cents a gallon in the last two weeks, according to the Lundberg Survey of 7,000 gas stations nationwide, released Sunday. The average price of a gallon of regular gasoline at self-serve stations was $3.70 on Friday.
Despite that, gas nationally was almost 95 cents a gallon higher than a year ago, and the volatility in oil prices are a big concern for investors. But Tuesday's reports helped offset a spike in oil prices that rose out of concerns Hurricane Gustav might hit installations in the Gulf of Mexico in coming days. In early afternoon trading, the Dow Jones industrial average rose 5.86, or 0.05 percent, to 11,392.11.
The Conference Board's index that measures shoppers' current assessment of the economy declined to 63.2 from 65.8 in July. But the one that gauges their outlook over the next six months jumped to 52.8 from 42.7 in July. The 10-point increase marked the biggest gain since November 2005, when the economic fallout of hurricane Katrina was subsiding.
Franco said that declines in the Present Situation Index, both in term of business conditions and the labor market, appear to be moderating.
While economists say they can't underestimate the relief among consumers to see gas prices come down, Americans are still faced with a number of challenges as they head into the crucial fall and holiday selling seasons, from a weak job market to tight credit conditions and the housing slump.
"It's encouraging to see the benefit of lower gas prices helping consumers a bit," Thayer said. But he noted that there's still a lot of worry out there. As for the housing market, he cautioned that mortgage rates have not come down and tighter lending standards could stall any housing recovery.
The Standard & Poor's/Case-Shiller report showed that 14 cities in the monthly index showed improvement from May to June, but nine recorded positive returns. Meanwhile, the Commerce Department reported that new home sales rose 2.4 percent in July to a seasonally adjusted annual rate of 515,000 units, the most since April. But sales in June had dropped to a pace of just 503,000 — down from previous estimates of 530,000 — to mark the worst performance since September 1991.
Economists projected sales to drop in July, but expected the pace to be around 525,000. Given June's sharp downward revision, the level of home sales in July wound up to be less than analysts were anticipating.
The Consumer Confidence report — derived from responses received through Aug. 19 of a representative sample of 5,000 U.S. households — showed people's current assessment of the labor market turned bleaker.
Those saying jobs are "hard to get" rose to 32.0 percent from 30.2 percent in July, while those who found them "plentiful" declined to 13.1 percent from 13.6 percent. Their outlook for what's ahead in the labor market was less gloomy. The percent anticipating fewer jobs in the months ahead decreased to 30.6 percent from 37.3 percent, while those expecting more jobs increased to 10.5 percent from 8.0 percent.
—
AP Business Writers Jeannine Aversa in Washington and J.W. Elphinstone in New York contributed to this report.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
2008-08-26 13:37:48
NEW YORK -Americans felt better about the economy in August, as a barometer of sentiment posted the biggest boost in two years amid falling gas prices. Two reports suggested that a bottom could be nearing for the housing market, but economists caution it's too early to proclaim that the worst is over.
The Conference Board, a private research group, said Tuesday that its consumer confidence index rose to 56.9, up from a revised 51.9 in July. That's the largest gain since August 2006, and is ahead of the 53 expected by economists surveyed by Thomson/IFR.
It's also the second month in a row that sentiment improved, after a six-month slide since January — but it remains about half what it was a year ago, and worries about the job market persisted.
"It's still too early to call a bottom" on both confidence and housing, said Gary Thayer, senior economist at Wachovia Securities.
The Standard & Poor's/Case-Shiller U.S. National Home Price Index released Tuesday showed home prices dropped a record 15.4 percent during the second quarter. However, the rate of single-family home price declines slowed from May to June, a possible silver lining.
Sales of new homes rose in July, but still fell short of economists' expectations, and home prices continued to sink. Still, the July increase followed a sharp downward revision to June's sales.
"Consumer confidence readings suggest that the economy remains stuck in neutral, but may be showing signs of improvement by early next year," Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. However, "overall readings are still quite low by historical standards, and it is still too early to tell if the worst is behind us."
Economists and investors closely monitor consumer sentiment as consumer spending represents about two-thirds of all economic activity.
Falling gas prices in recent weeks helped boost consumers' mood, Franco said. Gas prices have dropped 15 cents a gallon in the last two weeks, according to the Lundberg Survey of 7,000 gas stations nationwide, released Sunday. The average price of a gallon of regular gasoline at self-serve stations was $3.70 on Friday.
Despite that, gas nationally was almost 95 cents a gallon higher than a year ago, and the volatility in oil prices are a big concern for investors. But Tuesday's reports helped offset a spike in oil prices that rose out of concerns Hurricane Gustav might hit installations in the Gulf of Mexico in coming days. In early afternoon trading, the Dow Jones industrial average rose 5.86, or 0.05 percent, to 11,392.11.
The Conference Board's index that measures shoppers' current assessment of the economy declined to 63.2 from 65.8 in July. But the one that gauges their outlook over the next six months jumped to 52.8 from 42.7 in July. The 10-point increase marked the biggest gain since November 2005, when the economic fallout of hurricane Katrina was subsiding.
Franco said that declines in the Present Situation Index, both in term of business conditions and the labor market, appear to be moderating.
While economists say they can't underestimate the relief among consumers to see gas prices come down, Americans are still faced with a number of challenges as they head into the crucial fall and holiday selling seasons, from a weak job market to tight credit conditions and the housing slump.
"It's encouraging to see the benefit of lower gas prices helping consumers a bit," Thayer said. But he noted that there's still a lot of worry out there. As for the housing market, he cautioned that mortgage rates have not come down and tighter lending standards could stall any housing recovery.
The Standard & Poor's/Case-Shiller report showed that 14 cities in the monthly index showed improvement from May to June, but nine recorded positive returns. Meanwhile, the Commerce Department reported that new home sales rose 2.4 percent in July to a seasonally adjusted annual rate of 515,000 units, the most since April. But sales in June had dropped to a pace of just 503,000 — down from previous estimates of 530,000 — to mark the worst performance since September 1991.
Economists projected sales to drop in July, but expected the pace to be around 525,000. Given June's sharp downward revision, the level of home sales in July wound up to be less than analysts were anticipating.
The Consumer Confidence report — derived from responses received through Aug. 19 of a representative sample of 5,000 U.S. households — showed people's current assessment of the labor market turned bleaker.
Those saying jobs are "hard to get" rose to 32.0 percent from 30.2 percent in July, while those who found them "plentiful" declined to 13.1 percent from 13.6 percent. Their outlook for what's ahead in the labor market was less gloomy. The percent anticipating fewer jobs in the months ahead decreased to 30.6 percent from 37.3 percent, while those expecting more jobs increased to 10.5 percent from 8.0 percent.
—
AP Business Writers Jeannine Aversa in Washington and J.W. Elphinstone in New York contributed to this report.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
2008-08-26 13:37:48
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