Great article from the WSJ regarding the second home market.

The Shrinking Second Home

Real-Estate Resorts Pitch Cabins, Cottages as ‘Affordable Housing for the Affluent’

By JULIET CHUNG

Even in the up-and-down world of real estate, this pitch may sound a little funny: “Affordable housing for the affluent.”

Juliet Chung discusses developers of high-end vacation homes, which are building smaller, less expensive houses in resort communities as home sales slump in major markets across the country.

It’s the strategy developers of high-end vacation homes are devising as home sales slump in major markets across the country and inventories of unsold homes rise. They are building smaller, less expensive houses in resort communities. As a result, from Turks and Caicos in the West Indies to the Colorado Rockies, some vacation communities are getting just a bit less exclusive. The goal is to avoid lowering the sales prices on existing homes and upsetting homeowners who paid more for their homes. The communities typically cater to people seeking a second, or third, or even fourth home as well as amenities like a clubhouse, beach access, or golf courses.

Same Island, Less Money

SWA Architects2010: $1.4 million and up; 1,800 to 2,800 square feet; There are several models, such as rendering above. All include expansive patios.

HOMES

HOMES

Harlan Hambright2006: $2.5 million and up; 2,800 to 4,000 sf; Kitchens with Sub-Zero refrigerators and Wolf ranges. Custom homes can include wine cellars.

HOMES2

HOMES2

“We’re trying to get the point across that you can have a great place in a wonderful island for, quite frankly, a reasonable price,” says Steve Schram, who is developing a Turks and Caicos resort community which has a new push labeled “affordable housing for the affluent.” On a private, 1,100-acre island, Turks & Caicos Sporting Club at Ambergris Cay offers members access to white sand beaches, sports fishing, scuba diving and a jet strip. This year, Mr. Schram, chairman at DPS Sporting Club Development Co., and a partner rolled out an option to build a small house, designed by architects they’d hired, that could limit a buyer’s purchase of house and land to as low as $1.4 million. That’s 44% less than the $2.5 million required for the island’s least expensive property and home previously. And it’s a big comedown from 2007, when a buyer paid about $6.5 million for an undeveloped eight-acre lot. In central Florida, at Pine Creek Sporting Club, a hunting retreat where members shoot quail and deer and ammunition is included in homeowners’ dues, new buyers can purchase cabins, starting at 1,500 square feet and $600,000. Previously, the least expensive option was to pay about $2 million and up for a 40-plus acre ranch site and custom home. Developer Stephen Myers Jr., who converted a ranch site into 23 cabin sites in September, says he is considering converting another ranch site into cabins. Private wealth manager Kim Fonseca, of North Palm Beach, Fla., purchased one of the new cabins, paying less than $700,000 for a three-bedroom cabin. His wife Nicole furnished it in a hunting motif. The house has wood beams, slate tile floors and a big moose head over the fireplace. Since the cabin was completed in March, the Fonsecas have spent nearly every weekend there with their family or friends, and their dogs. Recently, the club’s chef cooked a turkey his son had shot for their dinner. With a smaller house, “I can lock it and leave” instead of keeping a staff on-site, says Mr. Fonseca, 55.

Pine Creek Sporting Club, Okeechobee, Fla.

Pine Creek Sporting Club2008: $2 million and up; 2,500-5,000 sf; Some owners of custom homes have gun safes and are digging lakes on their 40- plus acres of property.

HOMES3

HOMES3

Brantley Photography2009-10: $600,000 and up; 1,500-2,200 sf; Some cabins have outdoor fireplaces.

HOMES4

HOMES4

In some ways, the luxury resorts are acting more like typical planned communities. Some developers are making sample floor plans for the first time instead of having buyers design their own homes—often a more expensive proposition. Others are decreasing lot sizes. Developers say they’re also responding to what post-boom buyers want: value and convenience, rather than supersized lots and homes. At Marabou, a 1,700-acre ranch community near Steamboat Springs, Colo., where amenities include fly-fishing and cattle-driving, new buyers are offered incentives to purchase undeveloped lots that start at about $1.8 million, a 20% price cut. The developer is offering to pay down points on some mortgages to lower buyers’ interest rates. In other cases, the developer is offering to pay a portion of homeowner dues, which run $24,000 annually. And for the first time since the development broke ground in 2006, prices on a few properties have dropped. “I think our owners understand the market is tough right now,” says developer Jeff Temple, who said 2009 was Marabou’s worst year of sales, but that sales had picked up since. In Bend, Ore., golf-club community Pronghorn has designed a series of homes starting at $700,000. That’s 50% less than the minimum required to buy a lot and build a custom home, the next cheapest form of ownership there. “The whole world doesn’t live in second homes that are over $2 million,” says Terry Russell, president of the development and management group at Atlanta-based Reynolds Co., which owns and manages more than a dozen developments around the Southeast. It is also adding lower-priced homes.

Reynolds Blue RidgeAt Reynolds Blue Ridge, Blowing Rock, N.C., a rendering of a new cabin. The new styles sit on 1/3 of an acre and can include an outdoor kitchen.

HOMESjp1

HOMESjp1

Rachel Strombeck.A much larger custom home on two acres from 2008. Custom homes can include home theaters and wine cellars.

HOMESjp2

HOMESjp2

Peter Gatti bought into a golf development in the Blue Ridge Mountains near Blowing Rock, N.C., in 2006. He estimates he and his wife spent about $2 million to buy two acres and build a five-bedroom custom vacation home with what he describes as “endless” views of the mountain ranges. Reynolds bought the 6,300-acre development in December 2008 as it was going through foreclosure, renaming it Reynolds Blue Ridge and creating a system of trails leading to swimming holes. Tennis courts, a gym and other amenities are in the works. This summer, the company began building cottages a few miles from Mr. Gatti’s home that are on the market for less than $600,000. “To some extent, anything that keeps the development moving forward, we’re all for it,” says Mr. Gatti, 50, who owns a tax preparation company. “We’re at a different place than we were three or four years ago.” Write to Juliet Chung at juliet.chung@wsj.com

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ParkCityWire.com

We’ve officially moved our site to www.ParkCityWire.com

Come check us out there for a NEW and IMPROVED version of your favorite Park City blog!

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Thinking Good Thoughts….

Existing-home sales rose in July to the highest level in five months, although they continue to be well below the numbers from last year at this time, according to the NATIONAL ASSOCIATION OF REALTORS®.

Existing-home sales including single-family, townhomes, and condominiums increased 3.1 percent in July to a seasonally adjusted annual rate of 5 million units from a downwardly revised level of 4.85 million in June. Sales were 13.2 percent lower than the 5.76 million-unit pace in July 2007.
 
Many people might be bashing these numbers, because they say 40% of these sales were foreclosures….but don’t the foreclosures need to get out of the marketplace before we can move on???
 
Just speaking locally, we have seen activity in the market drop this year, but the prices have appreciated a few percentage points. If we could get some of the “fence-sitters” to pull the trigger I think we would be doing just fine.  There are a ton of lookers, but people seem to be gun-shy. This should probably change in the next 6 to 9 months though.  Stay positive!

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Park City Market Update…News You Can Use

White Barn in Park City, Utah

White Barn in Park City, Utah

In the past few days we have seen 44 properties come on the market, 18 go under contract, and 21 close escrow. The notable ones are:
 
NEWLY ACTIVE:
-Silver Star ski in/ski out at Park City Mountain Resort for $3.15m; 6bd/7ba, 3690 sq ft, $854psf….let’s keep our eyes to see what this one does…at over $3m it is a big number, but where else can you get a 6 bedroom ski in/ski out home around $3m in Park City???
-Glenwild home at $3.875m; 6bd/7ba, 7710 sq ft, $503psf….priced just right in of Utah’s best communities.
-Promontory home at $4.29m; 4bd/7ba, 7563 sq ft, $567psf….we actually built this home and it is no $4m home in this market….$3.5m???, now that makes more since. Especially since it was bought for under $3M about 2 and a half years ago!
-Tuhaye home at $3.7m; 5bd/7ba, 7300 sq ft, $507 psf…seems priced right, but the inventory keeps building up out there.
-Another Tuhaye home (see my point above regarding inventory) for $3.99m; 5bd/7ba, 6200 sq ft, $644psf….with all that inventory and the lack of activity I don’t know where you get over $640psf from???
 
PRICE CHANGE:
-Old Town home down $700,000 from its original price to $3.7m; 4bd/5ba, 3401 sq ft, $1088psf…looks like this might need to come down a bit more, but they are in the ballpark…great location!!! Ski in/ski out and awesome finishes!
-Upper Deer Valley Silver Lake Village townhome down $100,000 to $1.099m; 3bd/4ba, 2368 sq ft, $464psf….this has great views and could be a steal!
-2 lots at the Colony located in the Canyons ski resort down to $1.895m….down $200,000
-Tuhaye lot down to $599,000….down $185,000
 
PENDING:
-Iron Canyon home in the Thanyes Canyon area for $2.798m; 6bd/7ba, 5526 sq ft, $506psf…great home!
-New Park townhome at $498,900; 2bd/3ba, 1345 sq ft, $370psf…these are a great buy.
-Lodges at Bear Hollow for $339,990; 3bd/2ba, 1330 sq ft, $255psf….at lot of activity in Bear Hollow over the summer!
 
CLOSED:
-Park Meadows home for $1.8m; 5bd/5ba, 5424 sq ft, $346psf.
-Park Meadows (Fairway Meadows) home at $1.95m; 5bd/6ba, 5912 sq ft, $330psf…nice ppsf!
-Bear Hollow townhome for $550,000; 4bd/4ba, 2757 sq ft, $199psf…Bear Hollow is moving product!

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How to Use RSS Feeds…(starting with ParkCityWire ;)

It’s so hard to keep up with all the news and information you crave…RSS feeds are a great way to tackle this and if you’re not familiar, here’s a quick video which gives the details in a fast and easy way…so go ahead try it!  Why not start with ParkCityWire!

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so…new?

we’ve been working on this new layout for the ParkCityWire site and we think we like it….actually, we are currently in the process of getting another newer more modern and wonderful updated version together for your viewing pleasure….but in the meantime…what do you think of this layout?  do you like the brown one better? let us know your opinions!

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Market Update…last week in August

Tonight Rob and I are attending the Gipsy Kings concert at Deer Valley as the second to last chance to take part in the St. Regis Big Stars Bright Nights concert series.  It’s going to be a blast! 

And don’t forget to check out our new blog layout and the new newsletter button we put at the top of the sidebar…if you give us your email address we’ll give you our little newsletter and you know what that includes?….it includes coupons for local businesses here in Park City such as Chloe Lane and Jean Louis…thank us later!  😉

During the past 5 days we have seen 63 properties come on the market, 24 go under contract, 18 close escrow. The high notes are:
 
NEWLY ACTIVE:
-2 sky lodge units at $375,000 and $399,000; both 3 bedroom, fractions (one-eighth ownership)
-Silver Star ski in/ski out at Park City Mountain Resort at $2.625m; 4bd/5ba, 3689sq ft, $711psf….the price per sq ft is not too bad, but we’ll see what happens to some of the flippers.
-Short Sale in Old Town on Park Ave for $698,000; 3bd/2ba, 1582 sq ft, $441psf….If you are looking at a condo around this price point, this could be right up you alley…with no HOA fees.
-Deer Lake Village in Lower Deer Valley at $840,000; 2bd/3ba, 1728 sq ft, $486psf.
-Chatham Hills home at $1.628m; 4bd/5ba, 4089sq ft, $398psf….I like this neighbor for being in town and having great value for the convenience and views!
-2 Glenwild lots at $925,000 and $800,000 inventory is increasing on the lot front.
-Promontory lot at $379,000….good deals are all around at Promontory.
 
PRICE CHANGE:
-Poison Creek Mercantile condo in Old Town down $300,000 to $1.695m; 3bd/3ba, 2209 sq ft, $767psf…now it is priced about right! Great building and location too!!!
-Old Town home down $200,000 to $995,000; 3bd/3ba, 2388 sq ft, $417 psf…not a bad deal for this location.
-In The Trees condo in Deer Valley down $100,000 (in just 25 days) to $1.299m; 4bd/4ba, 2415 sq ft, $537psf….make an offer on this one, it looks like they could go lower and you get good rentals here.
-2 Glenwild lots down $100,000 and $200,000 both to $790,000.
-Mountain Ranch Estates home down $735,000 (over about a year) to $2,100,000; 7bd/7ba, 7670 sq ft, $274psf…they are probably at their bottom line on this one. It is a nice home, but has some odd features…but for a steal it could be right.
-Promontory home down about $2m! This is a must go!!! at $3.5m; 6bd/6ba, 10007 sq ft, $350psf….if you are in this price point this home could be the deal.
 
PENDING:
-Sky Lodge unit at $267,000; 2bd/2ba, 1260 sq ft, one-eighth ownership…good price for this buyer!
-Old Town home at $2.9m; 5bd/6ba, 3465 sq ft, $837psf….they did not get anywhere close to this… as it was supposed to be auctioned, but maybe someone came in a took it before hand. I believe the auction was to start in the mid-$1m’s
-Deer Valley home at $2.495m; 5bd/6ba, 4960 sq ft, $503psf….Deer Valley has had good activity since the spring!
-Thaynes Canyon home at $997,000; 4bd/3ba, 2820 sq ft, $354psf…they got aggressive and lowered the price on this one a few times and got it off the market pretty quick….good buy for the right guy.
-Old Town home at $1.19m; 3bd/3ba, 1766 sq ft, $674 sq ft….good to see some activity on the end of Old Town by the Resort. Things have been slow down there.
 
CLOSED:
-Grand Lodge unit at Empire Pass in Deer Valley for $3.5m; 5bd/6ba, 3264 sq ft, $1072psf….Always over $1000psf in Empire and they have had a relatively active summer.
-Promontory lot at $800,000…..a little activity in these times out there is great news! I think people “in the know” still believe in the development.
-Old Town home at $1.312m; 4bd/5ba, 2591 sq ft, $608 psf….they priced these newly constructed homes to move and they moved them well.

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