Steamboat Real Estate Home Search and Blog

Barron’s had a great cover article this week about Luxury Real Estate.

Here is the link to the Barron’s luxury real estate article.

Although the Steamboat luxury market is not mentioned specifically, there are a lot of similarities to the resort communities profiled.  Prices for Steamboat luxury real estate are also down–in some cases by 20-30%–from the peak prices of the last few years.

Not all high end real estate is discounted, as many sellers have the time to wait for the inevitable rebound.  There are, however, a few motivated home owners who would like to sell and have priced their property accordingly.  Those are the properties receiving offers from shrewd buyers.

The article states,  “The question that summer-home buyers face is whether to act immediately or wait for prices to drop still more. It might be wise to start shopping, for trying to time the bottom of this specialized market is a dangerous game. Once confidence returns among would-be buyers, the top-tier market is apt to snap back quickly, making it easy to miss out on discounts if you haven’t already started a home search.”

If you are interested in starting to look at Steamboat luxury real estate, here are some searches to get you started:

Steamboat Luxury Homes for sale

Steamboat Springs Ranch Communities

Steamboat Luxury Condos and Townhomes

Here is the entire article in case the link doesn’t work:

LAST-MINUTE SHOPPERS, TAKE HEART: Plenty of swanky summer digs are yours for the taking. From Carmel, Calif., to Newport, R.I., second homes with yachting docks, tennis courts, golf courses and infinity pools — to say nothing of the obligatory spectacular view — are languishing on the market. Prices are down an average of 20%, and as much as 30%, from their 2007 peak. Cash-strapped sellers, anxious to find buyers by summer, are slashing prices still further and often accepting low-ball offers, according to brokers across the country.

Among the latest price choppers: Kenneth D. Lewis, embattled chief executive of Bank of America, who just cut the price on his 5,700-square-foot Spring Island, S.C., vacation home by 13% to $3.3 million. – “This kind of price cutting is a first for the luxury second-home market — it has always been relatively insulated in downturns,” says Jack McCabe, CEO of McCabe Research & Consulting, a real-estate consulting firm in Deerfield Beach, Fla. “People who own these kinds of second homes have always been very well-heeled financially, enough to withstand tough times.”

But this downturn is different. Financial executives have seen multimillion bonuses go up in smoke, and wealthy folks everywhere saw part of their fortunes evaporate on the stock market last fall — losses that, for the most part, haven’t been recovered.

Prices for luxury summer homes — generally defined as houses of $3 million and up — could come down another 5% or 10% before bottoming with the broader realty market by the end of this year, many professionals say. That would still leave the segment less bruised than the overall housing market; prices there fell 24% from mid-2007 through the end of last year and are likely to fall another 15% this year, according to Fiserv Lending Solutions, a research firm in Cambridge, Mass.

The luxury summer-home market has also held up somewhat better than the total market for luxury homes, mainly because there are relatively few summer mansions in the battered winter meccas of Florida, Southern California, Las Vegas and Arizona. Thanks to exposure to those locales, the overall deluxe market is off about 25%, experts estimate.

The question that summer-home buyers face is whether to act immediately or wait for prices to drop still more. It might be wise to start shopping, for trying to time the bottom of this specialized market is a dangerous game. Once confidence returns among would-be buyers, the top-tier market is apt to snap back quickly, making it easy to miss out on discounts if you haven’t already started a home search.

“In the past, the lower end of the market has recovered faster in terms of price appreciation, but I think this time around it is going to be different,” says Celia Chen, director of housing economics for Moody’s Economy.com. The lower end of the market will continue to be constrained by tighter lending standards.

In contrast, the mayhem in mortgages has had less of an impact on the luxury market. Wealthy buyers traditionally pay cash for properties, and when they choose to borrow, their asset levels often make it easy to qualify. True, prospective buyers have been subjected to the same job and market losses as sellers, and many may have to sit out the market no matter how low prices go. But there is a lot of pent-up demand for high-end real estate, and that will drive the market as confidence in the economy returns, Chen says.

Some buyers have already started venturing back into the market. Real-estate purchase volume among U.S. Trust clients, who have net worths of at least $5 million and investable assets of at least $3 million, increased 60% in March and April over the last two months of 2008, says Jan Reuter, managing director of residential real estate at U.S. Trust, Bank of America’s private banking unit. For second homes, volume increased by 200%, she says, “and we are seeing a big increase in inquiries.”

Many brokers also say they have had a sharp increase in calls and showings in recent weeks. “There is definitely a pulse,” says Melanie Delman, broker at Lila Delman Real Estate in Newport. “It was quiet at the end of September and through the beginning of this year, but we are out there with clients seven days a week now.”

With sellers so eager to strike deals, it is entirely possible for a buyer to sign the closing papers today and move in by the Fourth of July. “It can be done in 30 days, easy,” says David Bindel, a broker at John Saar Properties in Carmel, Calif. If no financing is involved, the turnaround can be even faster, he says.

While some signs of life can be chalked up to a change in season, sales in the upper echelons of the second-home market tend to be less cyclical than the rest of the housing market, Reuter says. “Our clients see residential real estate as an asset class no different than any other investment they would make. So when they find something they think makes a good investment, they get in,” she says.

Perhaps not surprisingly, more and more foreclosed mansions are for sale. In the first quarter, there were 1,214 foreclosures of homes worth $3 million and up, compared with just 279 in all of 2008. Last week in Telluride, Colo., a 6,150-square-foot stone and timber home hit the foreclosure list. During more than a year on the market, its price was cut from $4.995 million to $4.250 million, and the final price is likely to be significantly lower, says Corie Chandler of Peaks Real Estate in Telluride.

But foreclosures are hardly the only game; prices are down throughout the luxury sector. Some of the sweetest deals on summer homes can be found along the North Atlantic coast in areas like the Hamptons, Newport, and Nantucket and Martha’s Vineyard in Massachusetts. These are typically homes-away-from-home to the Wall Streeters who have been so hard-hit by the recession.

“A lot of second-home sales, especially in the New York area, are generated by Wall Street bonuses,” McCabe says. The financial-services industry has shed 447,000 jobs since the start of 2007, says Economy.com. And those still employed are likely to see their bonus checks slashed. Last year’s bonuses were down as much as 50%, and little improvement is expected this year.

Buyers in the Northeast who decided last year to wait for further price cuts may like what they see. Sharon Smith Purdy, president of Sandpiper Realty in Martha’s Vineyard, points to a 3,000-square-foot contemporary home that sits on a bluff on Chappaquiddick Island and has 360-degree views of the island and ocean. It went on the market last year for $6.85 million. Last week its price was reduced more than 30%, to $4.48 million.

For an impeccably restored 1891 oceanfront mansion in Newport, “we will consider any offers,” says owner Candy Keefe. “Anything, anything.” Keefe listed the 22-room house at $14.5 million four years ago. Now, despite extensive renovation in the meantime, the offering price is $12.8 million. “We are a family that wants to move on,” she says.

On the Northwest Coast, the deluxe vacation market is driven more by the technology industry than the financial field. “Our biggest group of buyers are from Northern California, so we had huge appreciation in the late 1990s, and then a softening” when the tech bubble burst, says Tim Allen, a broker in Pebble Beach, Calif. Prices regained ground — and then some — through the earlier part of this decade, but as the Nasdaq plunged again late last year, so did prices.

For the most part, price reductions in the area have been a result not of financial distress on the part of the seller, but rather a desire to free up some capital to direct to other investments or simply to do some belt-tightening, brokers and sellers say.

“I’m paying all of this insurance and property tax, and I rarely use the property,” says Bill Hutchinson, a Dallas-based commercial-real-estate investor who is selling a 1920s Mediterranean-style villa that overlooks the Pacific Ocean in Carmel Highlands, Calif. Anderson bought it as a vacation home in 2005 for $6.2 million “on a whim,” he says. The home was listed a year ago at $7.45 million and has since been reduced to $6.45 million. “I’ll walk away before I take a loss on the property. But if I find a buyer, it will probably be a wash after closing costs,” he says.

In Rocky Mountain retreats such as Telluride and Aspen, Colo., known for expansive lodge-style estates and celebrity draw, prices have come down about 15% — not as dramatic a dip as either coast because the areas didn’t see a great speculative boom earlier this decade. “We see some spec builders who are offering significant discounts to rid themselves of debt, but it isn’t commonplace,” says T.D. Smith, president of the brokerage Telluride Real Estate. “We have seen an extreme slowdown in sales, however.”

In sleepier upscale vacation markets such as Jackson, Wyo., and Big Sky, Mont., average prices on upscale homes haven’t declined by much, but sales have plummeted and inventories are up. In Jackson, sales in the first quarter of this year were down 52% from a year earlier, says Clayton Andrews, a local broker.

As activity starts to pick up, buyers are sure to be crunching the numbers more carefully than they used to. For example, while many have the means to pay cash, they may choose to get mortgages anyway, Reuter says. The reasoning is that, with interest rates so low — 6.3% on a 30-year fixed jumbo loan — it makes great sense to finance a purchase and maintain liquidity as opportunities for other investments arise, she says.

Make no mistake, this isn’t cookie-cutter financing. “We might structure $5 million on a first mortgage with a seven-year term, another $2.5 million mortgage behind it on a three-year term, then a remaining amount in a balloon mortgage,” Reuter says. “We structure loans to fit with their overall situation — a client could be trying to hedge interest-rate risk, or they may know they are unwinding a business or having some kind of liquidity event that is going to allow them to pay off part of the loan soon.”

Regardless of how they pay for their houses, buyers are insisting on value as never before.

“People are saying, ‘Do I really need a $5 million house? Maybe a $3 million is fine,’ ” says Jacquie Persons, a realty broker in Big Sky. “They are also actually sticking to their price ranges — they didn’t worry about price range so much before. And they are looking closely at the price per square foot.”

Persons knows whereof she speaks: She put her own home on the market for $3.5 million four months ago and recently lowered the price to $2.99 million to get it into the under-$3 million range.

Doug Newhouse, a Weston, Conn., resident who works in finance, says he and his wife carefully compared the kind of property and amenities they could get for their money in different resort towns in the Northeast. “I always figured we would buy in Nantucket, but we found the value proposition in Newport to be substantially better than in Nantucket and the Hamptons,” he says. “We were able to buy a property in Newport that we wouldn’t have been able to buy somewhere else.”

Today’s market may not be much fun for sellers. Rather than escaping to their summer homes, they’re doing all they can to escape from them. But for discerning buyers like Newhouse, that can mean the opportunities of a lifetime.