Boom Keeps Up in Posh Vail Region

The latest from the Vail Daily: Continued low interest rates -- and the threat of them rising -- continue to help convert renters into home owners and to drive real estate sales to new records in Eagle County, Colorado, which includes Vail.

"It's also creating a shortage of residential properties, real estate experts said.

"Of the 193 sales in January, 123 were priced at $1 million or less - Eagle County's definition of entry-level housing. The average sales price of 83 properties sold that were priced at $500,000 and less was $306,820 while the price of property priced at $500,000 to $1 million was $711,773," according to statistics compiled by Land Title Guarantee Company.

The overall average sales price: $687,939.

Western North Carolina: Environment v. Growth

It's a paradox: an environment that draws second-home buyers in the first place is gradually being marred by their influx. That's the thesis of an exchange of letters that appeared not long ago in the Asheville (NC) Citizen-Times.

A letter headlined "Second homes may bring dollars, but development saturation brings other problems" was from a community leader. He argued that the Western North Carolina vacation-home mecca is now so built out, there are fewer available choice sites. Consequently, developers were buying large tracts in an area previously owned by big landholders, such as timber companies."While second homes might not cause any more environmental impact than timber operations may have caused initially," the cost of roads, water and sewer facilities, and the continual impact upon the biotic ecosystems "is equally or even more significant."

I'd like to hear from others who live in fast-growing second-home towns. Do you think this kind of reasoning is
a) on target for your area as well
b) off-base
c) true in some places, but not in your own town.

Alabama, Florida Coasts Rebound From Storms

Not even hurricanes can stop folks from wanting Gulf-front homes.

Prices for properties on the Gulf in storm-ravaged Alabama and Florida have zoomed beyond $500,000 since Hurricane Ivan in September. That's up from about $300,000 to $400,000 during the previous year.

I'm amazed at such a quick rebound in an area hit by four major hurricanes just a few months ago. But developers are only too happy to buy older properties that were damaged or destroyed by the storm and are putting up high-end condos in their place, according to a Mobile newspaper.

I wonder: How much are the new buyers paying for hurricane insurance?

In Divorce, Who Gets Second Home?

That's a question the Wall Street Journal's RealEstateJournal investigated recently.

"With the sharp rise in real-estate values, vacation homes often are becoming a major sticking point when couples divorce," RealEstateJournal said.

"This is especially true when a second home has been in a family for generations. A home may be the inherited property of one spouse, but it often becomes a marital asset when enjoyed by a couple and their children.

"During divorce negotiations, some spouses will 'make a claim for the house not because they want it, but because they can,' says Arlene G. Dubin, a family-law attorney with Sonnenschein Nath & Rosenthal in New York."

The REJournal offers these ways to avoid a conflict over a vacation home:

Prenuptial agreement: Spell out who gets what before the wedding.

Family limited partnership: A person could transfer property into the limited partnership but retain a 1 percent interest with all rights to control the assets. Such arrangements work best in conjunction with a prenup.

Irrevocable trust: This typically means children are trustees and rules are established about usage and ownership.

Postnuptial agreement: This is where a married couple agrees the beach home or ski lodge that has been in one spouse's family for years won't be subject to property division during divorce.

Condo Tower Near New Orleans Takes Shape

When people think of New Orleans as a vacation home site, they tend to think of a condo in the French Quarter or the Warehouse District. But a Florida developer thinks there's a market for luxury condos not near downtown, but rather on Lake Pontchartrain.

The New Orleans Times-Picayune reports today that the 23-story, "350-unit behemoth encompassing 1 million square feet plus a 200-slip marina and retail waterfront center" would rise near Slidell.

Developer Richard Waserstein told the paper he hopes to break ground on the 250-foot tower by the end of the year, with the project completed by the summer of 2007.

"Entry-level prices" would be about $350,000 for the smaller units. About 100 units will be 1,400 square feet. About 70 units will be 1,500 square feet in size, another 70 will be 1,900 square feet.

"We've tested the market, spoken to Realtors and people who live in the area. The demand we see is tremendous. Even just from an investor standpoint -- and we're really looking for people who want to live there, not just invest -- we see a tremendous upside," Waserstein tells the paper.

He sees the market as those looking for second homes, those who work downtown and want waterfront amenities just across the twin spans of Interstate 10, single-family home hunters on the north shore, and out-of-towners.

The draw will include those attracted to the waterfront site because of its location between the gambling of the Gulf Coast and the amenities of downtown New Orleans, he said. Waserstein added that St. According to the paper, "Tammany is the fastest-growing parish in the state and among the fastest-growing counties in the nation."

But at least one local real estate executive questions the size of the proposed condominium tower.

"I'm a little surprised at the number of units," Shaun Talbot of the Talbot Realty Group in New Orleans. "That area has no real track record" in major condo sales."

Survey: Many Won't Mind Flying To 2d Home

The latest survey of potential second-home owners by EscapeHomes.com indicates that distance from a primary residence is becoming less of a factor.

"Only a quarter of the people surveyed" in 2003 preferred to fly to their second home," the survey said, but "in 2004, there was an increase in comfort level, with more than a third willing to fly."


A majority -- 57 percent -- would still rather be within driving distance, said EscapeHomes.com, the San Francisco-based online marketplace, but potential buyers are becoming more flexible. The latest survey showed that 60 percent of respondents "plan to buy a second home more than 500 miles away" from the place they call home.

"The demographics of the second home buyer have shifted only slightly this year," the company reported. The number of married people looking for second homes increased by almost 10 percent to 83.3 percent and the number of people with incomes over $100,000 increased to 58.6 percent, a 26 percent jump over EscapeHomes.com's survey a year earlier.

Who are these potential buyers? Baby boomers, to be sure, but Gen X as well as seniors are actively looking for second homes, according to the survey.

See my Feb. 19 post for an analysis of other key findings in this survey.

Official Tally of Second Homes About To Soar

The second-home market right now is "unprecedented," David Lereah, chief economist at the National Association of Realtors, tells the Washington Post today.

Even his association has been surprised by the size of the second-home market, the paper continues.

"There's significantly more second homes out there than we realized," Walter Molony, a spokesman for the real estate association in Washington, is quoted as saying. "It's a much larger share of total home sales than we previously understood."

In 2003, the NAR estimated there were 6.6 million second homes in the country and that second-home sales represented 5 percent to 6 percent of total home sales.

A new report the association plans to release in March will show that this number is much higher. Vacation homes alone total about 6 million, according to the report, and that doesn't include second homes bought for investment only.

According to the association, its earlier study underestimated the size of the number of second homes because the market proved hard to measure. Questionnaires sent to second homes often weren't returned because the homeowner didn't live there, Molony said. The new survey was done via the Internet.

Second-home buyers have more access to money than they used to, the story continues, largely because their primary homes have escalated sharply in value.

Or, as Lereah, the NAR economist, put it: "All the stars have aligned for the second-home market."

Beltway Residents Head for Blue Ridge Hills

Today's washingtonpost.com offers a great illustration of what's happening in the second-home market.

It tells how a suburban family recently bought two properties at the Wintergreen Resort in Virginia's Blue Ridge mountains. One is a two-bedroom condominium near the ski slopes. The second: land where the family plans to build a house.

As the paper describes it, Humberto Vasquez "bought them so he, his wife and his two young boys could whoosh down the slopes in the winter, splash in the pools in the summer and play golf and tennis in the spring and fall on weekends away from Washington."

But -- and here's where the article echoes the just-published EscapeHomes.com survey -- "he also bought them with an eye toward making money."

"We mainly did it because we really like the place," said Vazquez, 46, an architect. 'But they're really good investments as well. Properties there are appreciating very fast." Wintergreen is less than a three-hour drive from the Beltway.

Will Eager Shoppers Become 2d Home Buyers?

"Nearly 82 percent of respondents plan to buy a second home." There's a headline that grabs the attention of anyone in the vacation real estate business.

It's from a survey by the San Francisco-based EscapeHomes.com, an online marketplace. And it bears careful scrutiny.

For one thing, EscapeHomes.com says the audience it polled via e-mail consisted of 4,665 visitors to its Web site -- in other words, these were people who had already demonstrated their interest in second homes.

Of those 4,665, there were 363 responses -- a 7.8 percent response rate. It's reasonable to assume that people who took the time to respond were even keener on the subject.

David Hehman, the company president acknowledged that the poll is skewed in favor of the most eager potential buyers. "You have to be careful, but you can see we're capturing a part of the bigger trend," Hehman told MarketWatch. "It's a proxy for what's happening in the larger market."

Among the respondents, 41 percent say they will "definitely buy within the next 2 years, while only 24 percent had that conviction" in EscapeHomes.com's 2003 survey.

The skeptic in me says that desire for a second home does not necessarily translate into a purchase. I hope EscapeHomes.com follows up to see of these 363 respondents do eventually buy.

Also, it seems as though a significant number of potential buyers are more interested in making money than in changing their lifestyle. The survey says 29 percent plan to buy a second home for investment.

And 26 percent would buy for "retirement purposes", with only 18 percent seeking a pure "vacation home." That contrasts with the 2003 survey, in which EscapeHomes.com respondents "were equally split between these three categories."

EscapeHomes.com notes that this shift "is also reflected in the attributes people want in their second home destination," -- recreation, warm climate and a strong rental market" topped the list.

On Monday, I'll discuss two other key findings in this interesting survey.

No Surprise: Aspen Has 2 of 10 Priciest Sales

When Forbes published its list of the 10 most expensive homes sold in 2004, the only surprise was that an Aspen property did not register the Number one price tag.

That honor went to billionaire Ronald Perelman's $70-million sale of a Palm Beach mansion to construction mogul Dwight C. Schar.

However, Aspen claimed two in the top 10. Number two on the Forbes list: Mandalay, Hollywood proucer Peter Guber's ranch located on a gorgeous stretch of Owl Creek Road between Aspen and Snowmass Village. Guber sold it at what Forbes labeled a "discount" --the 650 acre ranch (with a 15,000 square-foot mansion among its buildings) was listed for $63 million, but Guber settled for a mere $46 million.

Number five was a place that former Goldman Sachs honcho Robert J. Hurst bought for $20 million. However, other reports last year indicated Hurst paid only $15.5 million for the Stein Ranch in the McClain Flats area just outside town, although he did buy other parcels nearby before that.

According to Forbes, the ranch "includes an older home, plus barns and stables." Not unusual in Aspen, so what's the big deal? It's a tear-down, according to Forbes, with Hurst and wife Soledad planning to replace it with a brand-new palace.

Tahoe Demand Drives Up Truckee Prices

If you are looking to buy a house in Truckee, CA, expect to dole out half a million dollars or more.

The median price of a home in the area climbed by over $100,000 from 2003 to 2004. This means the median price of a home is now $539,900, according to a year-end market report by Chase International.

The region, near Lake Tahoe, is a huge skiing and summer lure for northern Californians. It includes Truckee, Squaw Valley and Alpine Meadows,
The 24 percent jump in a one-year period outpaced increases around the entire Lake Tahoe area, except for Tahoe City, which grew at the exact same 24 percent rate, according to the report. The median home price in town stood at $435,000 at the end of 2003.

Ron Hemig, a real estate broker with Hemig and Erle Real Estate in Truckee, is quoted in the resort as saying one effect of rising home prices is a spillover influence on neighboring areas like Sierra County.

As out-of-area buyers drive up prices in Truckee, Hemig sees more and more local owners cashing in and moving to Loyalton, Sierraville and Graeagle. And those locals that have not bought a house in town are often tempted by the lower mortgages in the Sierra Valley.

As a result, he says, a three-bedroom, two-bathroom home on one acre in Loyalton is going for an average of $350,000, similar to prices in Truckee a couple of years ago.

Truckee, where sales of over $1 million properties grew by 63 percent last year, is now attracting more of a resort and luxury market buyer.

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Jackson Hole Site for New Grad School?

The Wyoming House of Representatives has proposed a new graduate business school in Jackson Hole. It would be a branch of the University of Wyoiming.

Reason: it's a way "to tap into the expertise and pocketbooks of corporate leaders who vacation or own second homes in the scenic valley," says an AP report.

"The bill is relatively simple. The concept is relatively large," the sponsor, House Speaker Randall Luthi told the AP. "Teton County is the richest county in the United States. The financial capital is available."

Supporters said such a school could help keep more Wyoming students instate, attract more executives and businesses... and diversify the economy, according to the report.

Rep. Keith Gingery of Jackson said: "This is our opportunity to take advantage of the people moving into our town.... These are companies that you know. These are international figures that fly in. ... These folks write checks like you couldn't believe."

Mammoth Group Frets Over Growth

Not everyone wants their vacation town to become a magnet for others, says Advocates for Mammoth, a group of residents and homeowners who are concerned about "rampant" development (680 new units in 2005) in the central California ski village.

Growth "is taking place without any obvious analysis of future consequences. We believe that the Town of Mammoth Lakes is encouraging growth that cannot be sustained and real estate speculation that will overstress Town finances and infrastructure," the group told a local paper yesterday.

"Our concerns with the current speed of development are based on our detailed review and analysis of the data available from the Town of Mammoth Lakes and other agencies, combined with our personal observations .... These concerns include crowding, traffic and parking, available water, snow storage, loss of environment, low occupancy rates during most of the year, and planned recreation projects that will require annual public funding to maintain, such as the proposed ice skating rink.

"We are also concerned that the Town is granting zoning variances and density bonuses, above those required by the state, in their drive towards a destination resort of 60,000 plus peak population."

Buying Vacation Home "Bargains"

Have you always been curious about the bargains you supposedly get when you buy foreclosures, tax-deed or tax-lien properties? Do you sometimes wonder if that's how you can get a toehold in an pricey vacation home region?

I wonder, too. I have never bought anything this way. But Larry Loftis has. In today's RealEstateJournal, published by the Wall Street Journal Online, he offers these tips:

* The best deals on acquiring properties are not on tax deeds, but on tax liens where the redemption period has expired.

* At tax-deed sales, the best deals will usually occur on vacant lots, since fewer bidders will be interested in acquiring them.

* Be wary of tax-assessed values on vacant lots, because those figures may not be indicative of the lot's true fair-market value.

* If you seek to acquire a property at a tax-deed auction, you may want to invest in counties that have low minimum bids.

It sounds like Loftis knows his stuff. The Journal identifies him as a "Florida-based attorney and author of Profit By Investing in Real Estate Tax Liens (Dearborn, 2005)."

I'd love to get feedback from any of you who have used any of these strategies.

2 Key Players Expect Strong 2005 in Mountains, Seaside

Can mountain and seaside villages continue strong growth? Two key developers say yes.

Intrawest of British Columbia and Booth Creek Ski Holdings of Colorado early this week both voiced optimism during financial conference calls about sales for the rest of this year at their real estate "villages."

They include Intrawest's Whistler (BC), Stratton (VT), Sandestin (FL) and Mountain Creek (NJ), along with Booth Creek's Northstar-at-Tahoe (CA).

Booth Creek said the strength of its first phase of condos at the Village at Northstar was so good that the second phase -- with construction starting this spring -- will be offered at "appreciably higher per square foot prices."

Intrawest too said it's doing just fine, thank you. However, the company chose to discount prices at one project at Copper Mountain, Colorado to reduce inventory, and it has lowered its estimate of average sales price of condos in its North American portfolio from $550,000 to $525,000 -- still not exactly shabby.

Down in the Florida panhandle, Intrawest said the resale market is particularly strong at its Sandestin resort.

Bargains? There might be some later this month at Utah's Solitude Mountain Resort near Salt Lake City. Intrawest will be auctioning a bunch of its base condo units Feb. 26.

Beware of Greedy Rental Agencies

Noted real estate columnist Robert Bruss tells a cautionary tale of mismanagement of vacation homes in a recent column headlined Did rental agency cheat vacation homeowners?

He cites a case in which the manager of a rental agency apprently took advantage of absentee owners by collecting money on short-term rentals and pocketing it.

If you're renting out a vacation home, how do you stop this kind of greed? Two logical answers: do your due diligence before signing up with an agency, and read all the fine print.

But I hope Bruss offers his own suggestions in a followup column.

New Web Site Rents Vacation Homes

Hotels.com has launched a companion, vacationSpot.com, calling it the first Web site enabling consumers to book instantly thousands of vacation rental properties, including condominiums, suites, villas, and vacation homes, located in the most popular destinations around the globe.

Looking for such a rental? Here's an incentive to click now -- VacationSpot.com is giving away 100 weeklong vacation rental stays during its first 100 days, meaning through the end of April.

Condo-Hotel Sales Strong at New Jersey Mountain Resort

You don't have to be a big hill to be a popular one. Mountain Creek, an Intrawest resort in Vernon, New Jersey has sold out Phase II of The Appalachian condo-hotel, the company announced today.

This is first village property to be developed at the resort, about 50 minutes by car from Manhattan. The current release included 77 properties. It had already sold out its first 100. The first part of The Appalachian, now under construction, is expected to be completed this summer. Phase II is scheduled to come onstream a year later.

"People have found a vibrant sense of community and a wonderful year-round playground in New Jersey, said Doug Ganssle, Director of Sales at Mountain Creek resort. The Appalachian, cornerstone of Intrawest's village, will feature a total of 177 homes in furnished studio, one- and two-bedroom configurations. It's got ski-in, ski-out access and an underground garage.

Miami Burns With Condo Fever

Just when it seemed as if the second-home market couldn't get any barmier, it has, says this article in today's New York Times.

"Angelina Umansky... was visiting a friend in Miami two weeks ago when she heard about a new condo development downtown. Hoping to find a vacation home, but worried that others were interested, too, Ms. Umansky arrived at the sales office at 8 a.m. the day after seeing some model units.

"About 50 other buyers were already in line. Two hours later, she... had four minutes to decide which unit to buy. She acted fast, offering $350,000 for a two-bedroom, two-bathroom unit.

"Ms. Umansky thinks she got a bargain...less than eight hours later, she was told the asking price on a unit like hers had climbed to $380,000, a nearly 9 percent price increase.

"With inventories lagging behind demand and prices for new homes rising seemingly by the hour in destination cities like New York and second-home markets like Miami and Orlando, home buyers are camping out overnight in front of sales offices, pestering brokers and developers and scooping up multiple units in the real estate version of scalping.

"This is a perfect storm for a frenzied housing market," Susan Wachter, a professor of real estate at the Wharton School of the University of Pennsylvania, told The Times.

She explained: "The economy is strengthening, the restrictions on development are increasing and long-term mortgage rates are still historically low." As interest rates start to creep up, more buyers tend to pile into the market, trying to lock in good rates, she said.

"Park City Is Off The Charts"

That's the lede of a story in Salt Lake City's Deseret News. The numbers are eye-popping indeed.

"The resort town now basking in the spotlight of Sundance has proved to be an attraction of its own, with homebuyers surging in record numbers and new construction rising 60 percent in 2004," the paper said.

"What used to be a vacant lot where you could park or plow snow is now a driveway," town planner Patrick Putt told reporter Erin Stewart. "What was unique about last year was the numbers came from every sector of town."

It was Park City's best real estate year ever, with $1.2 billion in real estate sales in 2004 and home prices creeping higher, said spokesman Myles Rademan. "Everything that's selling for under $300,000 is being grabbed up like peanuts. That's the low end of the market now," he said.

Michael Sloan, statistician for the Park City Board of Realtors, said sale prices are up about 20 percent over last year and will continue to climb as available land becomes scarce. Even now, Sloan said, available properties have been cut in half from previous levels.

North Carolina Resort Sales Strong

Not only did sales of existing homes in North Carolina shatter records last year, resort sales led the way, says Inman News.

According to statistics from the North Carolina Association of Realtors, the average price of a residential unit was $193,817. But, led by Brunswick County, resort numbers were especially strong. The so-called "Golf Coast" of barrier islands boasted the largest percentage increase in total sales dollars (47 percent), thanks mainly to the 21 percent increase in average sales price. Also booming: the Outer Banks, Wilmington and Jacksonville.