Cheap Slopes, Expensive Houses

A retired couple in South Lake Tahoe is livin' large thanks to a condo bought in 1976 and a season pass at Ski Heavenly. The pair's condo, which cost $50,000, would now sell for at least $350,000... a bit above average for the resort town where about 70 percent of all homes are occupied by investors or second-home owners. Meanwhile, the huge snowstorms this winter meant they paid for their $219 ski pass in four visits from Bremerton, WA, their "real"home.

More from Berkshires: Even Pittsfield's Selling

"The houses sell right away. We got into a bidding war with three other couples," said a new buyer in Pittsfield, the biggest -- and most economically depressed town -- in Berkshire County (western MA). With second-home buyers now looking for more modestly priced vacation homes north of luxe Lenox, plus a trickle of South County (Berkshire) long-timers cashing out and buying more affordable, houses in Pittsfield, locals say the town might be on the rise, according to the Berkshire Eagle. But don't salivate yet; this is a trickle so far, not a flood.

Gretzky Seeks $25 Million Goal

Former ice hockey star Wayne Gretzky and his wife, Janet, are asking only $25 million for their "opulent" estate in Westlake Village, CA, according to the Los Angeles Times. It has seven bedrooms and eight baths, a pool and tennis courts-- but no skating rink.

And It's Only First Week of Spring

How hot is the Florida market? The South Florida Sun-Sentinel says that figures released last week by the Florida Association of Realtors show the median price for an existing Palm Beach County home up 35 percent to $352,900, compared to a year earlier. In Broward County, the median price for a home rose 32 percent to $319,400."

By Jiminy!

Who says a small mountain resort can't thrive? At Jiminy Peak in Western Massachusetts a new $6.5-million lodge and condo building -- with condos pre-sold for as much as $549,000 -- is set to be built this summer. Doesn't hurt that Jiminy is within weekend driving distance from New York City.

Vail's Holy Grail: Land

Who cares about the snowfall -- Vail Resorts is "primed to make a bundle off something [Mother Nature] isn't making any more of: Land," says Marketwatch. It quotes Vail CEO Adam Aron: "The demand for mountain real estate is immense." Proof: With ground not even broken yet, VR's Arabelle condominium complex has 573 applications -- and a $100,000 deposit check -- for each of 63 of 67 available units. Average price: about $3 million. "That is $226 million in a single day," Aron crowed.

An Antelope By Any Other Name...

Pronghorn, which bills itself as "the premier private golf community in the Pacific Northwest," has been selected as one of the six "World's Hottest Ground Floor Investments" by the editors of Robb Report Vacation Homes, its owners brag in a press release. Truth is, the brand-new community isn't finished yet and is simply one of six new second-home developments briefly described in the Spring 2005 issue. It says nothing about "world's hottest."

Breaking News! Speculation Risky!

"It's true that some people have made fast profits [in buying homes and condos recently], but it's not to be expected," NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said recently. In fact, it can be risky, and prospective buyers need to be aware of the facts before they think about jumping in."

Affordably Exclusive or Exclusively Affordable?

Exclusive Resorts, one of the big Residence Clubs, is luring a new, perhaps less luxe clientele. Previously you plunked down $375,000 to join and got as many as 60 days a year at its posh digs. The latest offering, billed as more "affordable," is an "affiliate membership" for a mere $185,000 fee, $9500 annual dues and only 15 days. Think A & K and other competitors might jump into this larger pool? Or does Exclusive Resorts simply need more cash?

Quote of the Week: Northern California

"Dyer Mountain is seen as the poster child for a ridiculous development scheme in the Sierra Nevada.... too far from urban centers to be practical, its elevation is too low for reliable snow, and opposition to it will only grow. But we have to take every threat seriously. A lot of goofy development proposals have been approved and been constructed over the years." --
Tom Mooers of Sierra Watch, speaking about a proposed residential village.

Tipping Point For Fractionals?

Buyers gobbled up almost $1.1-billion in fractional (luxury timeshare) purchases last year, says Ragatz Associates. That's nearly double the dollars spent in 2003."The fractional market is finally making a breakthrough," says Richard Ragatz of the Eugene, OR consulting firm. Just five years ago, fractional sales were a piddling $161-million.

Wedmoon and Elopement

No, it's not a weird mating ritual. The Web site EscapeHomes says destination weddings, also called "wedmoons" and "elopements" are an increasingly popular alternative to more formal traditional weddings. "If you are in the market to purchase a second home and desire strong rental income to help pay down the mortgage," says EscapeHomes, consider buying in popular wedmoon locales, such as Las Vegas, Charleston, and Napa. Etiquette: guests pay their airfare while bride and groom pay for the food, drinks and lodging.

Idaho Park and Buy

Tamarack, the ambitious new ski and summer resort in Idaho, isn't shy about targets for its first condo sales. Besides Boise and Washington State, it's taking its presentation on the road to Del Mar, Carlsbad, Laguna Beach, and San Jose, CA. Valet parking's included, natch.

Two Kinds of Real Estate Bugs

The Sierra once was a region where you could find plenty of woodsy getaways for not much dough. Now, writes Carol Lloyd on a San Francisco Web site, "the area has been bitten by a real estate bug the size of a man-eating mosquito. Call her the second-home sister of our own Bay Area bloodsucker."

Seniors Rock and Loll

A forthcoming study, "Seniors on the Move: Impacts on Cities, Suburbs and the Sunbelt" by Bill Frey of the Brookings Institution, one of the nation's leading demographers, reports that while some boomers and seniors will migrate locally or longer distances, others will simply "age in place". Already, "better-off segments... are highly sought after among cities that look to them as a means of tax base enhancement and population growth.... At the same time, less-mobile segments residing in cities, inner suburbs, and the Frostbelt are creating new challenges for communities that retain them," says the summary.

If Only He Had Bought, Not Rented

A hungry burglar who targeted empty vacation homes is now behind bars. According to detectives in Brunswick County, NC, 22-year-old Jason Warren Poindexter was arrested last Thursday after he broke into vacation rentals in the Holden Beach area, ate the food in the cupboards and ran up the utility bill.

Down in Denver

Slowing home-price appreciation in Denver is making folks like Mike Rinner, a local housing market analyst, and Gary Bauer, a real estate broker, nervous. Investors "might get concerned about depreciation" and head elsewhere, Rinner said. Where? Probably Las Vegas, where housing is hotter than Cirque de Soleil. Bauer told the local business journal he thinks people's desire to buy investment property in Denver and Boulder has waned, with many people inspecting second homes in Vegas instead.

A Wallet Runs Through It

That's a Philadelphia reporter's comment on this fishy branding: Orvis, the fishermen's friend, which sells rods, reels, waders and a whole lot more, is now marketing its very own log cabins. Well, not exactly its own. Orvis has teamed up with Rocky Mountain Log Homes to offer what its catalog calls "a place for all your Orvis gear." Prices: from $441,490 for about 1500 square feet to -- gulp -- over $1 million for nearly 4,000 square feet. Land, naturally, is extra.

Biz Week Advice: Avoid the Burn

Caution may be in order for 2005, says Business Week. If you're planning to speculate on a second home, writes Amey Stone, "first, realize that you may be getting in late."

Residence Club Shopping? Check Ratio

How available are snazzy homes in the Residence Club you're thinking of joining? Undoubedly more available than in timeshares, due to lower member-to-resident ratio (typically 6:1 in residence clubs vs. 48:1 in timeshares). But some new clubs have ratios as high as 12:1, I'm told by Signature Destinations, a new Seattle-based outfit. Ask the question and do the math: calculate implied ratio by dividing avgerage property price by the membership deposit.

Denver Backyard Ski Site Goes Upscale

Winter Park, the ski area owned by the city of Denver, is doing serious upscaling. The other day a Florida developer said he's starting work in May on 56 new townhomes just two miles from the lifts. It's the largest residential development going forward in the town.

So This Is What Purgatory Costs!

The last remaining affordable Colorado mountain resort may be Durango. A local broker advertises "corner studio with slope views. Fully furnished, private balcony. Quarter share (25%) $22,500.... Third floor studio with ski slope views ("Lower Hades"). Whole ownership Townhome condominium. Just steps from the slopes!$195,000.... Studio /list price $75,000 SOLD! $70,000.... 5 mining claims/list $85,000 SOLD! $77,000." Mind you, this ski area used to be called "Purgatory."

Mi Casa Es Su Weekend Casa

Americans have always headed for Mexico on vacation. Now the real estate market in Mexican resorts is "exploding," according to the New York Times. In Puerto Vallarta and in similar destinations like Cancún and Cabo San Lucas, the high-end market for weekend homes for Americans has doubled in the last year.

SWF Seeks Single White Hunk, er, House

One woman told the New York Times her family turned to Web vacation house rental listings after a bad experience: they worked with a broker via phone who rented them a particularly shoddy place. "Online, you have a very good idea of what the houses look like. Still," she said, Internet descriptions can be "as highly exaggerated as personal ads."

Fractionals: The New Math

New niche Web sighting: LuxuryFractionalGuide.com, billed as "a comprehensive resource for consumers interested in understanding fractional ownership and locating fractional vacation properties.... Detailed information on over 170 properties worldwide." Over 100 fractionals have been started since 1999. This kind of ownership allows people to purchase a deeded share of a vacation residence in a specific, usually prime, location.

Your Kind of Town?

"With the kids grown, empty nesters are increasingly trading pricey suburban places for maintenance-free luxury housing in the heart of the city," says Kiplinger's, the personal finance mag. Two of its eyebrow-raising choices: Baltimore and Chicago.

Pots, Pans, Mortgage

"Most furnished properties [that I sell] include just the basics," says Pat Campbell-White, an agent in Rehoboth Beach, Del." I've also seen homes change hands with every pot and pan in the drawers." (via Kiplinger's)

Myrtle Millions

Once upon a time Myrtle Beach, SC was a "poor" country cousin to lavish Hilton Head or other South Atlantic coastal communities. But a new survey says that in 2004, Myrtle Beach had 65 homes listed at over a million dollars. then again, Charleston had 274 homes for more than a million, Hilton Head, 106; and Wilmington, NC, 58.

Question of the Week

"If people are treating second homes more like stocks and bonds, perhaps speculating that values will rise, are those loans more at risk of default than mortgages on primary homes?" asks Allen Norwood of the Charlotte (NC) Observer. Delinquency rates are not rising at an alarming pace, and the economy is improving, NAR's David Lereah replies. But some buyers are taking huge financial risks;"If interest rates head north on them, they could be in trouble."

Taking A $12,000 Bath

Deluxe bathrooms are all the rage in new homes, but I think this piece of plumbing reaches a new high-water mark. Interbath Inc.'s Electronic Shower System remembers the favorite settings of each family member -- down to the temperature of the water and the pressure from each of several showerheads. Price: $4,500 to $12,000, depending on features like the finish on the shower parts. (The most expensive model is coated in 24-karat gold.)

Quote of the Week

"Sometimes your eyes are bigger than your stomach. I can only be in one place at a time."-- Software mogul John McAfee, on why he's selling land on Molokai, Hawaii. (He owns two other properties there plus places in Colorado, Texas and Arizona.)

You Can Go Home Again -- To College

What price tailgate parties? More and more folks are shopping for a second home in their old college towns, according to the New York Times. Hey, the faithful have got to have a place to stay when making those frequent treks back for big football games. At Clemson University in South Carolina, where alumni return religiously for home games, "it's almost like a family reunion six times a year," in the words of Tom Winkopp, the developer of Tiger Walk and several other complexes. "They think this is a decent investment anyway."

Any Homes Left Under $100,000?

Not a whole lot in previously affordable California desert country, it seems. Median price of a home in the Coachella Valley, near Palm Springs, has zoomed well past the $300,000 mark. The "key trend" of 2004 -- rapid disappearance of homes priced under $100,000, say local agents. The buyers, of course, are not locals; they're the investor wannabes from LA, San Diego, Orange County and the Bay Area.

"We're still a big bargain for people compared to the prices in those areas," Alan Abell, a sales agent with the Palm Desert office of Dyson & Dyson, told a local paper.

Not Your Father's Woodstock

Sales in second-home mecca Ulster County, NY, which includes the town of Woodstock, bucked the downward trend of some Northeast real estate in 2004. Demand is strong and 60 percent of buyers seek weekend places. I spent the past weekend there, and we're not talking a hippie haven any longer. Sign of things to come: 652-unit Hidden Forest, a gated community proposed in the village of Hurley for those 55 or over.

...And We're Not Talking About Dogs

There's a new acronym in the real estate biz: WOOFs. That stands for "well-off-over-50 crowd," according to Barbara Vance, founder of Vance Realty Group in Orlando, FL. A subset of the baby boom generation, they're the ones driving second-home sales.

Get Smart, Novice Investors

"Buying a home for investment purposes is very different from buying a primary residence," says David C. Hehman, co-chairman and CEO of EscapeHomes.com, an online marketplace. "The first thing I would suggest is research, research, research. Know why you want to buy.... Be realistic about both costs and expectations. And find a great Realtor® to walk you through the process.

"An investor's success is in direct proportion to the degree to which he or she understands the investment," he added, quoting Superhero investor Warren Buffett.

"Pave Paradise, Put Up a Parking Lot"

Where: Martis Valley in Sierras between Truckee and Lake Tahoe, CA
Who: Placer County Superior Court Judge
What: Tentatively halted plans for 6,000 house development
Hidden issue: East-West Partners, one of the project's developers, said plans were being made to limit the amount of disturbance to local residents, such as relocating parking lots.
Comment: Environmentalists want to preserve pristine valley. If this is the best the developers could offer, no wonder the judge ruled thumbs down.

Trading Spaces

Check out this blog: The Home Exchanger. Useful info on trading spaces with folks in places you want to go. When you're headed for a city such as New York or Paris, where hotel prices have climbed into the stratosphere, it makes sense to barter, n'est-ce pas?

Singing in the Sun

"Sales agents in the Orlando area's luxury home market are nowadays singing the 'Hallelujah Chorus,'" writes Noelle C. Haner in the Orlando Business Journal. Reason: home sales in 2004 set a new annual record for the number of multimillion-dollar homes, 238 of them. That's a 76 percent increase over the year before. Who wouldn't be humming a happy tune with that kind of growth!

Second Homes Now Front Page News

Most intriguing "news" about the NAR study on second homes soaring as investment vehicles? Both the NY Times a few days ago and now The Wall Street Journal have put speculators on their front pages. The WSJ's lead story today is about Jonas P. Lee, who says he's buying "more than 1,000 homes for Redbrick Partners LP, a New York firm he runs with the help of an MIT economist to invest in single-family rental property." Lee is going after "working-class neighborhoods in such cities as Baltimore, Philadelphia and Trenton. Even there, however, he is running into tough competition from people determined to cash in" on the housing boom, says the Journal.

Your Own Private Island

Don't you just love the Forbes "Most-Expensive" this and "Richest" that lists? Here one: Most Expensive Private Island. Number One? James Island off British Columbia, for sale at just shy of $50-million. It's got a golf course designed by Jack Nicklaus, six cottages, a seaplane ramp, 2,600-foot runway and a dock. But-- no cars allowed.

Quote of the Week

"To call yourself a real estate developer in Taos (New Mexico) is akin to being a leper." -- Evan Blish, of Pinon Investments, a Realtor there since 1979.

Reaching The Summit

If "Summit County" means nothing to you, think "Breckenridge." It's one of Colorado's premier ski resorts and the latest figures show that housing sales for 2004 in the county and especially the town of Breckenridge were up 29 percent to $1.1 billion. Why Breck? Easy drive from metro Denver, among other pluses, is my guess.

South of the Border Dream Homes

Second home mania has spread beyond U.S. borders "The market has just become prolific in Mexico, with about 1.5 million Americans now owning property there," Mitch Creekmore, vice president of the Stewart Title Guaranty de Mexico office in Houston and an expert in the region, tells bankrate.com. "Values in some markets have tripled in five years." Financing, however, still comes at a premium he says.

Giuliani: Steppin' Up

Former New York City Mayor Rudolph Giuliani has a new weekend-home address: the Hamptons. It's reported he and wife Judith forked over $3 million for a mansion in the town of Water Mill. The "hilltop estate" has abut 6,000 square feet, seven bedrooms and seven-and-a-half baths. And a wine cellar. But it sits on only one acre of land -- nothing like the 11 acres that surrounds Gracie Mansion, the official Big Apple mayoral residence, which is in Manhattan.

"Like Winning the Lottery"

Who should know better about a good bet than folks in Atlantic City? With so many second-home investors scooping up houses in southern New Jersey, the Press of Atlantic City said "it's like winning the lottery" for lucky locals. Longtime shore residents are getting enough for their houses (and some are hardly more than shacks) to trade up to bigger quarters on the mainland... and "they often have a sizable amount of cash remaining." Makes you wonder when Vegas will start offering odds on house prices in that white-hot market.

Why Stress Pricey Condo, Not Single Family Houses?

I think the lead paragraph New York Times article about the surge in second home sales was a bit misleading.

Datelined Sunny Isles, Fla., the story led off with the tale of a couple who bought and sold two condos, then two houses, and now are putting a deposit on a $1.3 million condo in a high-rise under construction.

Yet the National Association of Realtors study, which prompted this article, pointed out that the vast majority of investment property purchases -- 83 percent -- were single family houses. And the median price was a modest $148,000.

As a former Times reporter I can tell you one thing: the splashy figure of "$1-million" in the lead is more likely to get you on Page One than "$148,000."

I was also puzzled by the reporter's comparison of investment home buyers to "the day traders of the 1990's dot-com boom." Do any of you real estate pros out there think the speculation has reached that kind of frenzy?

NAR: Second-Home Market 1/3 of All Home Sales

The National Association of Realtors reported today that not only did the second home market surge last year, it is much bigger than previously thought. Second homes actually account for more than one-third of all residential real estate transactions, a new study shows.

That's huge. Even the NAR's chief economist, David Lereah, said the numbers are "startling."

You can find key data in this press release from the organization. I gave my blog readers a sneak peek of the findings last week.

Lereah said today that among the biggest news is that 23 percent of the residential market is now investment property, while 13 percent is vacation homes. Thus real estate is now unmistakably "a viable investment alternative" to traditional investments, meaning primarily stocks and bonds. He said: "35% of buyers" surveyed said they "wanted to diversify their investments."

The study included condos, although the lion's share was single family houses. It did not include timeshares.