Wednesday, July 29, 2009

Mountain Town News


By ALLEN BEST - MTN TOWN NEWS SERVICE

Aspen real estate to stay below the $1 billion mark

ASPEN, Colo.—If current trends continue, Aspen, Snowmass Village and Pitkin County will not surpass $1 billion in real estate sales this year. The county first topped that threshold in 2003, and for several years went on to rise above $2 billion. Last year sales fell to $1.37 billion, according to research by Land Title Guarantee Co.

Jackson real estate pros see mixed future

JACKSON HOLE, Wyo.—Prices of real estate in Jackson Hole continue to drop so rapidly that appraisers have struggled to get the estimated prices right. Condominiums at the Racquet Club that crested $500,000 at the height of the boom have now been reduced to $300,000.

Whether the market has bottomed out is, of course, the question. Two of Jackson Hole's most veteran real estate figures, Bob Graham and Bland Hoke, say they think the lower-end properties—and in Jackson Hole, real estate even now doesn't get much cheaper than $300,000—may have bottomed.

Still, Graham and Hoke tell the Jackson Hole News&Guide that they believe the recovery will take time. Nobody's going to make money hand-over-fist during the next several years. The lower-end market will bounce back most rapidly, but the high-end market will take more time. The middle-market, defined as $3 to $4 million, will be most difficult.

Both real estate agents arrived in Jackson Hole during the early 1970s and had established roots in the real estate sector within the decade. As such, they have seen several downturns.

Hoke recalls that the economy through the 1970s was bumpy, capped by the severe jolt of 1983-84. Sometimes no sales occurred for days at a time, even weeks, recalled Graham. The same lower-end condominiums now worth $300,000 at that time slumped from $100,000 during the market peak to $50,000. Prices didn't start climbing again for about three years.

This time, the causes have been different. Many buyers of Jackson Hole come from the financial services industry, which has been particularly hard hit.

"I think that's going to have an effect on Jackson," Hoke said.

As for commercial real estate in Jackson—it's a disaster.

"Thousands of square feet are just sitting empty," Graham said. "Tens of thousands," amended Hoke.

Rural real estate—the 35-acre ranchettes—also is deep in the tank.

Comparing their situation to that of other ski-anchored mountain valleys of the West, they see greater promise for their adopted turf. They describe Jackson Hole as a "mature resort," with good airline service and amenities, but not overbuilt. And, of course, there is that age-old real estate axiom: location, location, location. The Tetons are hard to beat, and Yellowstone is just up the road.

Vail still a hotbed of construction

VAIL, Colo.—Real estate may be softer than a marshmallow, but don't tell that to Vail. Hundreds of finish carpenters, tile-layers and other construction hands remain at work on five significant construction projects in the town's core. Included are a Four Seasons Hotel and Ritz-Carlton Residences. These and other projects represent roughly $1 billion of base-area redevelopment on top of another $1 billion completed earlier in the decade.

Planning continues, meanwhile, for another $2 billion in construction. A project called Ever Vail is first in the queue. Proposed by ski area operator Vail Resorts, it aims for the ultra-high end, with a new gondola access to the ski slopes, but also aspirations of a LEED platinum ranking, the highest of the four-tiered green-building standard.

Next in the lineup is replacement of the town's 1,100-space LionsHead Parking Structure. At the very least, remedial work will be needed to prevent decay of the garage, and town officials believe they can achieve that while also gaining a long-coveted community conference center by partnering with a developer. The developer would gain the rights to build a couple of hotels—a W and St. Regis are the prime candidates—plus the usual assortment of restaurants and stores.

Several years ago, the town selected a Dallas-based developer, Open Hospitality Group-Hillwood Capital. The consortium includes Ross Perot Jr. The Vail Daily reports that the town and the Texas development group continue to negotiate. But the development planning has been difficult enough that some members of the town council have suggested launching maintenance of the parking garage for now.




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