Friday, August 1, 2008

Shaky real estate market hits home

Wood River realtors remain optimistic

Express Staff Writer

Karen Province shows the final plan for Sweetwater, which includes 421 condos and townhouses as well as retail space.

It doesn't take a Masters in economics or a license in real estate to know that the housing market is hurting. Just a quick stroll down almost any street in the Wood River Valley will sum it up—there are a lot of buildings for sale, but not a lot of buildings are selling.

According to Jim Figge, President of the Sawtooth Board of Realtors, things are not good when it comes to real estate in the Wood River Valley.

"We are tracking below last year's numbers in sales and dollar volume," Figge said. "I know that as of the end of June the numbers were roughly half of last year's."

Figge was quick to add that he is certain this downturn in sales and prices is merely a cyclical thing.

"I only wish I had a timeframe," Figge said.

Figge's positive outlook doesn't sound that much different from last year's assessment, by former president of the Sawtooth Board of Realtors Nicole Buckwalter.

In an interview for an article published in the Mountain Express on August 1, 2007, Buckwalter said, "We are gaining momentum. The market has leveled off and is showing signs of improvement."

Just one year later, Buckwalter's statement could not be more off.

In 2007, the Sawtooth Board of Realtors' Multiple Listing Service, which includes the number of sold homes, condos, townhouses, land, commercial buildings, farms, ranches, both disclosed and undisclosed, listed 22 properties sold in North Ketchum. As of June 2008, only three properties in North Ketchum have been sold.

Similarly, in 2007, there were 104 properties sold in Ketchum. This year, there have been only 27. In Hailey, 166 properties were sold in 2007. As of June 2008, there have been only 77. In Bellevue there were 39 properties sold in 2007. As of June 2008, there have been only 10.

Even if these numbers were doubled in order to account for the extra six months left in 2008, they would not match the numbers of previous years.

To make matters worse, real estate professionals know that the season to sell is summer and that window of opportunity is slowing closing right before their eyes. In other words, chances are the number of properties sold as of June 2008 will not be increasing by much, if any.

But despite the failure of last year's predictions from Buckwalter, real estate agent, bankers and developers all remain optimistic—at least when speaking with the press.

The resounding claims are twofold: one, resort areas are different from the rest of the national market, and two, the new developments offer more amenities which should attract more buyers.

While business development officer at Zion's Bank Linde Hoff acknowledged the real estate market's downturn, she was quick to offer her optimism.

"Sure, everybody is affected," Hoff said. "However, here less so than other places. Resort communities tend to hold their value more, so that makes us so encouraged."

Yet, she was quick to add that mid- and south-Valley values are declining. As a result, while second home buyers may not be as affected by the slumping real estate market, single home owners might be stuck.

The rationale behind this argument is that second home buyers have the cash or assets to buy, whereas a single home owner has to sell one house in order to a buy another, and with decreasing values selling in order to buy seems not only illogical but often impossible.

Things in Ketchum don't look much better. For Sale signs seem to litter the city's streets for commercial and residential living spaces, whether it's Iconoclast's old space on Main Street or the 25 luxury condos in the Chilali development where, according to the Blaine County assessor's office, 24 of 25 units are sitting empty.

Matt Bogue of Collier's International acknowledged that things "have definitely slowed down," though he, too, remained optimistic.

"Do I think it is going to turn around? Absolutely," Bogue said. "Do I know when? Absolutely not."

All of which begs the question: With so little moving, why is so much still being built?

In Ketchum alone, at least three luxury condo buildings are shooting up: two on First Avenue and one on Third Street. Meanwhile in Hailey, the Sweetwater development continues to plan for 421 residential units.

Hoff doesn't see these new developments as a problem. According to her, the type of people who will continue to buy are those who want services with their residential properties such as one-day dry-cleaning and daily maid service as well as someone to walk your dog or wash your car or guide you down the mountain. Hoff likened them to condos in big cities like San Francisco and Seattle where people pay extra for the apparent added value of service.

"Consumers will buy that over the existing empty condos that offer no services," Hoff said.

One such development is Sweetwater in Hailey. It is the largest residential development in Blaine County's history with plans for 421 condominiums and townhouses that will straddle Woodside's Countryside Boulevard.

The development is the ultimate community living space with a shared Grange Hall complete with a big screen movie room, an outdoor pool and a large grassy park. There are also plans for retail space in the development that would include a "Mom and Pop" type market. Additionally, Sweetwater offers a concierge service that organizes mountain guides and fly-fishing excursions.

To gain publicity, Sweetwater has held a number of community events like art shows, featuring local artists and a firefighter fundraiser.

Karen Province, a member of the Sweetwater sales team, calls Sweetwater "a little oasis."

"Sweetwater is different than anything else," Province said. "It is a lifestyle, like Elkhorn back in the day where people hang out together."

Yet, as of June 2008, there are 49 completed condos/townhouses in the development and there is not a single soul, besides the developer when he is in town for business, living on the premises.

According to Province, the reason for this is that the development has yet to get plat approval from the city. Despite this setback, Province said that three prospective buyers have reserved condos in the development by placing $1,000 refundable deposits.

Province seems unfazed by the real estate market.

"It's a buyer's market," Province said.

Everybody else, however, seems a little more cautious.

"If I had a crystal ball," Hoff said. "I'd love to say six months, however, I don't know any more than any body else."

"My personal belief is that by the end of 2008 we will start coming round," Hoff said. "The market is cyclical and this is a cycle of life so to speak. I guess what goes up must come down and all those other wonderful phrases that do have some truth in them."

Let's just hope for the sake of the realtors and the Wood River Valley, this year's assessment is a little more on target.

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