For the week of September 11 - 17, 2002

Real estate sales rebound

Residential market strong after post-Sept. 11 lull

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"Last October, no one knew what was going to happen. But then we saw a lot of buyers entering the market again at the first of the year."

DAN GORHAM, managing broker, Windermere Real Estate

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By GREGORY FOLEY
Express Staff Writer

After suffering a temporary setback in the wake of the Sept. 11 terrorist attacks on New York and Washington, D.C., the real-estate market in the Wood River Valley has shown signs of a strong recovery through the first eight months of 2002.

However, while sales of single-family homes and condominiums in Hailey, Bellevue, Ketchum and Sun Valley have been steady this year despite the slow economy and lingering fears of terrorism, investors so far in 2002 have been somewhat reluctant to initiate new ventures in commercial real estate.

Sales of all property types for the first six months of 2002 were up approximately 27 percent compared to the same period in 2001, with 370 transactions being recorded. The numbers were down slightly for July and August, but local brokers still closed 159 deals in the two-month period.

During the first half of 2002, 158 single-family homes sold throughout the valley, a nearly 40-percent increase from that period in 2001. Nearly half of the homes included in the tally are in Hailey.

Some brokers have described the strong sales this year as a welcome relief from slow sales in the last quarter of 2001, while others said business has been booming apart from a short down period immediately following the attacks on New York City and Washington, D.C.

"I’ve been swamped," said Narda Pitkethly, broker for Mountain Living Real Estate in Ketchum. "I found that after 9/11 there was a two-week shock period, but after that I started seeing a lot of interest in the area from people in cities on the East Coast looking to change their lives."

Pitkethly said she received a call from a New Jersey resident who said he wanted to relocate to the valley as he watched smoke bellow from the World Trade Center last September. The client told Pitkethly that he wanted to live in a "safer place."

Linda Badell, broker for Classic Realty in Ketchum, also said that sales have been very strong since a short lull after the September attacks. "This is the best year I’ve ever had by far," she said. "It’s been huge."

Badell said that she has worked with numerous high-end buyers who "don’t trust the stock market anymore" and are looking to move out of large West Coast cities such as Seattle, San Francisco and Los Angeles.

Badell also said that sales in her office picked up shortly after Sept. 11. "I think everybody just held their breath for a little while," she said. "I think the whole world stopped."

Pitkethly noted that some of her clients have been looking to buy in the Wood River Valley not only because it is considered a sheltered, favorable place to live, but also because they were seeking a safe haven for their investment dollars.

"Some people are looking for a good, solid investment in the valley with hopes of retiring here someday," she said.

Dan Gorham, managing broker for Windermere Real Estate, said he believes that three factors have combined to cause the resurgence in the local real-estate market.

He said a "pent-up demand" from the second half of 2001—when many would-be buyers postponed purchases because of concerns about terrorism and the lagging national economy—has come to fruition in 2002. In addition, investors are looking to reinvest money taken out of stocks suffering from the slow economy and numerous high-profile accounting scandals, and favorable interest rates have made property purchases more affordable to many first-time buyers, he said.

"Last October, no one knew what was going to happen," he said. "But then we saw a lot of buyers entering the market again at the first of the year."

Gorham noted that many buyers have been interested in Wood River Valley real estate because numerous properties are considered very affordable when compared to other high-end resort areas in the West. A high percentage of the homes purchased in Hailey and Bellevue this year were sold for $200,000 or less, he said.

Home-sales figures through the first eight months of 2002 also suggest that investors interested in expensive, luxury homes have been very active.

In the high-end category of homes that sell for more than $1 million, 66 transactions have closed during the eight-month period, compared to 52 from January through August 2001.

However, commercial real estate has not fared quite as well, with a surplus of spaces—particularly in Ketchum—remaining unoccupied through most of 2002.

Paul Kenny, broker for Colliers International in Ketchum, said he saw the commercial market slowing down before the events of Sept. 11. He said the excess inventory of commercial properties is in part the result of many new developments started during the boom years of 1999 and 2000 coming into the market during the recession of 2001 and 2002.

"I don’t specifically blame 9/11 on any of this. I think we were headed that way anyway," he said.

Kenny noted that many investors attracted to the Sun Valley area are wealthy enough to spend investment dollars in lean economic times, but are certainly being more cautious about making commercial deals. "I’ve seen a lot of interest, not a lot of activity."

While the national economy and the stock market remain in questionable health, Kenny said he sees signs that the commercial real-estate market is becoming stronger.

"I think we’re going to see a positive swing in the commercial and residential markets," he said. "I’ve placed four or five new businesses in the last couple of months."

 

The Idaho Mountain Express is distributed free to residents and guests throughout the Sun Valley, Idaho resort area community. Subscribers to the Idaho Mountain Express will read these stories and others in this week's issue.