Balancing Act?

Hello Crested Butte Real Estate Letter readers!

Today is April 1st, 2006, April Fools Day, and I think we all agree, no one is fooled when it comes to what is happening to Crested Butte’s real estate market.

This month’s issue of Colorado Biz Magazine features an article about our town and the changes we’re currently experiencing. The article by Stephen Titus, "Crested Butte’s balancing act" outlines some key aspects to the recent Mueller acquisition of the ski area and their plans to invigorate our economy through ski area resort improvements and a better relationship with the Town of Crested Butte and its business community.

Interesting stuff for sure. Read on and be sure to review the cited statistics about the Crested Butte real estate market, specifically the numbers on growth, rate of appreciation and whats happening with some new developments including West Wall Lodge and Pitchfork.  

Thanks for visiting,

Channing Boucher
Visit Crested-Butte-Real-Estate.com


Crested Butte’s balancing act

New owners hope to widen customer base with ski-base development
By Stephen Titus

Crested Butte hasn’t changed a bit – or has it?  It’s still the funky, friendly town with the old-time main street.

The drive up from  Gunnison still covers vast stretches of open ranch land, veined by miles of unsurpassed trout fishing, much of it protected by conservation easements that promise it will stay that way.

And the ski resort is still packed with experts-only terrain serviced by surface lifts and 450-feet-per-minute chairs.

But behind the open space, mountain-town hipness and slow chairlifts, are changes in the shape and tone of development that has the town of Crested Butte and Crested Butte Mountain Resort cooperating in a way neither side has seen in 30 years.

The result is a rebirth for the sometimes-scruffy resort, and a symbiosis with the town that both sides hope will translate into more skiers and healthy growth for the entire area.

"For so long it was a battle," said Bill Coburn, a member of Crested Butte City Council, of the relationship between the town and the ski-resort owners. "In the past, the model was to sell off real estate and pay bills. The new owners are investing in the resort."

The nuances of Crested Butte politics could fill an encyclopedia, but according to locals and the ski area’s new management, m
uch of the rub came from a difference of business models. The ski area’s previous owners, who seemed perpetually strapped for cash, needed real-estate sales to make any improvements to the mountain and base area. But the real estate development and improvements they proposed conflicted with the town’s vision for itself as a historic mountain community full of businesses that supported the throngs of skiers visiting the nearby resort. Much of the proposed development at the ski area included large areas of commercial property that would directly compete with the town. The previous owners also wanted to expand skiing to parts of the mountain that were considered untouchable.

New owners Tim and Diane Mueller hope to take a more symbiotic approach and redevelop the base area into a bedroom community serviced mostly by the town. So far, this sits well with the Town of Crested Butte and its leadership.

"There was a lot of commercial development planned for the area," said Michael  Kraatz, vice president of real estate development for Crested Butte Mountain Resort. "We’re trying to minimize that; it creates a certain amount of friction with existing commercial property owners. We want to work in harmony with them. It doesn’t make a lot of sense to build more commercial when it already exists."

So far, so good, but the Muellers also want to expand the ski area to add more intermediate terrain and are eyeing Snodgrass Mountain, which has long been considered off-limits by people in town.

"Some people question the need," Coburn said. "But I think we’re a ski resort and you need to keep people interested for multiple days. I think we need it (more intermediate terrain). There are a lot of questions I still have, but I think it can be done."

Coburn is also a developer who has managed to stay out of town-development scuffles, he says, by building projects that fit the needs of the area and not just a financial model.

His successful Pitchfork project created 98 homes – 25 percent of them for locals – on Mt. Crested Butte, a short distance from the base area. He also built a small office and retail building in downtown Crested Butte.

Pitchfork was started before the Muellers took over the resort. In fact, Coburn purchased the land in 2000 from the resort’s previous owners, the Walton family. At the start of the project, market-priced units were selling for around $250,000. Today the same units start at $750,000. According to a local realty’s study, since the Muellers’ purchase of Crested Butte Mountain Resort, residential sale prices in the area have averaged a 50 percent increase. 

 "We’re in the early stages of what every up-and-coming ski resort experiences: a major growth spurt," said one local realtor. "Buying here now would be like getting into a ski resort such as Vail or Telluride 10 to 15 years ago, and that’s an opportunity not to be missed."

The opportunity has caught the attention of high-end resort developers like Eagle Resort Development, which is based in Avon, outside Vail. Eagle Resort has taken its expertise in areas like Vail, Beaver Creek and Cabo San Lucas, Mexico, and put it to work on two resorts in Mt. Crested Butte. The WestWall Lodge project will be 44 ski-in, ski-out condominium units at the resort’s base. According to a press release from the company, units started selling for about $400 per square foot and are now going for $700 per square foot – a relative bargain when compared with Vail’s wallet-busting $1,500- to $2,200-per-square-foot prices. Already, 38 of the 44 units are sold. The company’s other Crested Butte endeavor, Wildhorse at Prospect, will be 55 single-family homes ranging in size from 2,800 to 3,400 square feet and selling for  $1.3 million to $1.73 million.

"Vail experienced major growth in real-estate costs and sales in 1998 and 1999, then tapered off but continued steady growth," said Rich Barnes, a partner in Eagle Resort Development. "Starting in 2002, Vail has continued to set real-estate sales records every year. We have seen the same thing happen in Cabo San Lucas, and expect a similar situation in Crested Butte."

Buyer’s Guide to Crested Butte, CO

Buyer’s Guide to Crested Butte, CO
By Channing Boucher, January 2006.  Channing Boucher is a Broker Associate at EagleBrooke Realty in Crested Butte, CO. 

Crested Butte and Mt. Crested Butte Real Estate have begun to see their segment of interested and diverse buyers grow, as their inventory of developable land continues to shrink relative to increasing demand.  The region’s breathtaking beauty and relaxed sophistication, its resonant mining history, topflight restaurants, and multiple recreational and sporting opportunities, add to the allure of continued market strength in the future.

Crested Butte Mountain Resort is betting on future growth as well.  Continuous improvements to the ski area’s infrastructure, including new conference center, recreation center, expanded snow making, a new grooming fleet, and improved guest services, make for an all-around, more desirable vacation destination.

With similar trends occurring in mature markets such as Aspen, Vail/Beaver Creek, Telluride, Jackson Hole and Sun Valley, remarkably Crested Butte remains well priced, and offers many more opportunities for the new buyer and savvy investor.   

Town of Crested Butte- Market Report – 2005

Single Family Residential

Total Volume:                           $27,196,901

Average Price:                          $906,563

Median Price:                           $872,750

                                                30 Sold

Average DOM:                        218

Low Price:                                $327,500

High Price:                                $1,900,000

Land

Total Volume:                           $12,678,500

Average Price:                          $633,925

Median Price:                           $562,500

                                                20 Sold

Average DOM:                        265

Low Price:                                $197,000

High Price:                                $2,500,000

Condominium

Total Volume:                           $10,399,000

Average Price:                          $415,960

Median Price:                           $370,000

                                                25 Sold

Average DOM:                        214

Low Price:                                $160,000

High Price:                                $949,000

Town of Crested Butte Mountain- Market Report

Single Family Residential

Total Volume:                           $24,335,500

Average Price:                          $785,016

Median Price:                           $610,000

                                                31 Sold

Average DOM:                        236

Low Price:                                $315,000

High Price:                                $1,900,000

Land

Total Volume:                           $21,806,900

Average Price:       &nbsp
;                 
$623,054

Median Price:                           $430,000

                                                35 Sold

Average DOM:                        398

Low Price:                                $190,000

High Price:                                $3,840,000

Condominium

Total Volume:                           $51,349,935

Average Price:                          $356,597

Median Price:                           $335,000

                                                144 Sold

Average DOM:                        161

Low Price:                                $89,000

High Price:                                $1,250,000

The population of retired Americans is growing rapidly.  Every 7 seconds someone turns 50 years old in the US.  These “Baby Boomers” are seeking to buy the best in vacation and retirement real estate over the next 15 years, research supports that 22% seek a residence in the mountains.  This trend is predicted to continue until at least the year 2019.

The trend is so great that the National Association of Realtors has formally designed a “Resort and Second Home Division” in the interest to service this specific target audience.  The Realtor certification is referred to as a “Resort and Second Home Property Specialist, (RSPS).

The following information was gathered from the CBMR Media Guide for Winter Season 2005/2006.

Tim and Diane Mueller

Crested Butte is the latest jewel in a portfolio of resort developments privately owned and operated by the dynamic husband and wife team of Tim and Diane Mueller. Widely respected throughout the American ski industry, the Mueller’s’ first project involved the successful transformation of Vermont’s Okemo Mountain Resort into one of the top ski resorts in the east. Their winning ways continued with Sapphire Beach Resort and Marina on the island of St. Thomas as well as the successful redevelopments of both Mt. Sunapee in New Hampshire and Catamount at Steamboat.
Tim and Diane bring a refreshing hands-on style of management to Crested Butte Mountain Resort: emphasizing superior guest service and uncompromised quality across the board. Their long-term vision is to vault Crested Butte into the top rank of North American ski resorts, not by being the biggest – but by being one of the best. As president and CEO of their company, Three Peaks Development, Tim Mueller oversees the direction, vision and financial health of the resort, while Diane focuses on “softer” aspects, like guest services, human resources and aesthetics. Three Peaks is truly a family-run operation, with son Ethan stepping into the role of Director of Operations for Crested Butte where he now resides full-time.
As a family, the Mueller’s are linked by their love for the great outdoors. Tim is an avid skier, duck hunter, bow hunter, fisherman, as well as an American history buff. His energetic wife, Diane is also a skier, sailor and marathon runner with an impressive background in fine arts and education. Their son, Ethan, is the Alpine specialist of the clan with favorite sports including snowboarding, skiing, hunting, fishing and mountain biking. No wonder why they already feel right at home at Crested Butte.

Future Development

CBMR has initiated the planning and discussion process for expanding skiing onto nearby Snodgrass Mountain. The expansion could add about 400 acres of predominately intermediate skiing within a few years. “Alpine skiing on Snodgrass is important to our success as a community. We intend to build upon the attributes of the mountain with a Master Plan of improvements that will take place over time and will be in keeping with responsible, planned growth and development that remains consistent with our standards of environmental responsibility and commitment.” Tim Mueller.

Your Mountain Home

Whether you are looking for a quiet home site with convenient access to the slopes or a residence at the center of what is becoming the vibrant heart of Mt. Crested Butte, Crested Butte Mountain Resort Real Estate has what you’re looking for. From the inspired ski-in/ski-out home sites of Prospect, to the new base village, Mountaineer Square, to the view-oriented Villas, you’ll find your own special place in a vast and wild territory.

Mountaineer Square
The master planned Mountaineer Square is the new lively center of the Mt Crested Butte community providing a sense of place via a well designed mixed-use village. Mountaineer Square represents one of the first major development / redevelopment opportunities at Mt Crested Butte.

Prospect
The ski-in/ski-out home sites at Prospect are the perfect place to build the custom home of your dreams. With pristine views and in a secluded neighborhood, Prospect provides the rare chance to own a new slope-side home at one of Colorado’s great destination resorts.

The Villas Summit
The new Villas Summit four bedroom ski homes offer an extraordinary combination of views, location and luxury. Positioned at the top of the Villas neighborhood, the choice becomes yours; hit the slopes, which are just a few short steps away, or stay in and enjoy your spacious mountain home.

Mountain Facts and Stats At-
a-Glance

Location:
Crested Butte is located in southwest Colorado, within the Gunnison National Forest and the Elk Mountain Range of the Colorado Rocky Mountains. The resort lies in the town of Mt. Crested Butte, three miles from the town of Crested Butte, one of Colorado’s largest National Historic Districts, originally settled in the 1880s as a mining supply camp.

Permanent population:
Mt. Crested Butte – 707
Crested Butte – 1,629

Distance from major centers:
30 miles/ 48 km north of Gunnison
230 miles/ 368 km southwest of Denver
90 miles/ 144 km northeast of Montrose
197 miles/ 315 km west of Colorado Springs
17 air miles/ 27 km (and one very big mountain range) from Aspen. Two and ½ hour drive in the summer, approximately four to five hour drive in the winter. (Kebler Pass is closed during winter months)

Nearest airport:
Gunnison/Crested Butte Airport (GUC), 31 miles/ 48 km to the south. Montrose Airport (MTJ) 96 miles.

Airlines:
New this year, United Airlines offers seasonal daily Airbus jet service from Denver to the Gunnison/Crested Butte Airport. Crested Butte is one of two ski areas to offer United Airlines, non-stop daily Air-Bus winter jet service. In addition, United Express provides up to three daily connections via Denver to Gunnison/Crested Butte year-round. Also new this winter, American Airlines will provide non-stop daily 757-jet service from Dallas to Gunnison/Crested Butte with additional Saturday flights during peak periods. E

Season dates:
November 19, 2005 to April 9, 2006

Lift operating hours:
9:00 a.m. – 4:00 p.m.
(High Lift & East River Lift close at 3:30 pm. North Face Lift closes at 3:00 pm)

Summit elevation:
12,162 ft/ 3,707 m

Base elevation:
9,375 ft/ 2,856 m

Lowest lift:
9,100 ft/ 2,774 m

Vertical:
2,775 ft/ 846 m — lift-served
3,062 ft/ 933 m — requires short hike to Peak

Terrain:
1125 acres

Snowmaking:
282 acres of terrain covered by 13 of 15 lifts

Lifts:
15 total— 3 high-speed detachable quad chairs, 2 fixed grip quad, 3 triple chairs, 3 double chairs, 2 surface lifts, 2 Magic Carpets™

Lift capacity:
19,850-people/hour

Trails:
121 total — 23% beginner, 57% intermediate, 20% advanced

Longest run:
2.6 miles/ 4.2 km (Peak to Treasury)

Superpipe:
Located at the top of Forest Queen. The dimensions for the superpipe are: 55’ wide, 18’ high, and a slope of 17 degrees

Terrain parks:
The Canaan Terrain Park , (2600 foot park) located under the Paradise Lift includes jumps of various shapes, sizes and sequences and a dozen or so rail features for intermediates to advanced riders. The popular Kid’s Park is located off the Painter Boy lift and open to skiers, snowboarders and snowskates. The park includes beginner hits and features that include rails, tabletops, rolls and a mini halfpipe. Open to all ages.

Tubing Hill:
In case your kids aren’t tired enough, a children’s tubing hill will be available during the day at the top of Painter Boy and after the lifts close at the base of the Red Lady Express. This hill is lit for nighttime tubing.

Atlas snowshoe loop:
2 miles/ 1.2 km
Two daily tours available/moonlight tours available in January, February and March

Average annual snowfall:
240 inches/ 610 cm

Lodging bed base:
Mt. Crested Butte – 5,000 pillows
Crested Butte – 550 pillows

Bars and restaurants:
On-mountain— 5
Mt. Crested Butte— 8
Crested Butte— 28

At-window ticket pricing:
Adults
1-Day/ $69
2-Day/ $138
3 out of 5 Day/ $198
4 out of 6 Day/ $260
5 out of 7 Day/ $315
6 out of 8 Day/ $372
7 out of 10 Day/ $427
Discounted lift ticket packages available year-round through Crested Butte Vacations, 800-810-SNOW

Skier Days:
1999/2000 – 414,642
2000/2001 – 367,263
2001/2002 – 336,483
2002/2003 – 342,416
2003/2004 – 333,011
2004/2005 – 376,000

Activities for the Disabled:
The Adaptive Sports Center (ASC) of Crested Butte provides year-round outdoor recreation activities for people of all disabilities. Winter programs include adaptive instruction for alpine skiing, nordic skiing and snowboarding. Lessons include private instruction, a lesson-only lift ticket and equipment. The ASC also has an extensive summer program. For more information, call (866) 349-2296 or visit their website at www.adaptivesports.org.

Nordic Skiing:
The Crested Butte Nordic Center, located in historic Crested Butte, provides 35 kilometers of groomed trails for traditional and skate skiing (trail pass required), an ice rink, snowshoeing (trail pass required) and sledding hill. The Nordic Center also provides rentals, lessons and guided backcountry tours in the Gunnison National Forest. Call (970) 349-1707 for more information or visit their website at www.cbnordic.org

Best Known For:
The historic town, the nightlife, fun and excitement, and the resort’s “Extreme Limits” terrain, offering some of the best extreme skiing in the world. Home of “Colorado’s Best Corduroy” and “Dreampipe”, the superpipe with a view!
Home of Colorado’s first X-Games, the legendary SAAB U.S. Extreme Freeskiing and U.S. Extreme Boarderfest Championships, the U. S. Extreme Freeskiing Telemark Championships, a Randonnee Rally and the Elk Mountain Grand Traverse.

Uniquely:
Ask people visiting Crested Butte, and words like authentic, exciting, genuine, unpretentious and fun come up again and again. It’s the perfect place to disconnect—-and reconnect with family and friends.
 
Bustling with action, but laid back in attitude, you can feel the vitality as you wander through the quaint, Victorian historic district with its choices for fine dining, brew pubs, shopping and nightlife.
The town boasts one of Colorado’s largest National Historic Districts, with charm impossible to convey in words. Although “sophisticated” and “charming” are words synonymous with Crested Butte, this doesn’t mean the town hasn’t kept a bit of its irreverence.
Crested Butte is the only North American home of Club Med, “The Granddaddy of All-Inclusive Resorts,” Club Med Crested Butte, is an all-inclusive family destination and ski village, providing meals, beer and wine, ski school, mini club for the kids, lodging and lift tickets. After only five years of operation, slope-side Club Med Crested Butte boasts the highest guest satisfaction scores worldwide.

BUYER RECOURCES

I encourage you to find out all there is to know about The Crested Butte and Mt. Crested Butte Community.  Below you will find a list of websites that will help you start your search.

www.gunnisoncrestedbutte.com
www.eaglebrookerealty.com
www.skicb.com
www.cbweekly.com
www.visitcrestedbutte.com
www.crestedbuttenews.com

 

 

Second-Home Market is Booming!

Second-Home Market is Booming! Who, What, Why?
The second-home market is booming. According to the National Association of Realtors, there were 2.82 million second-homes sold in 2004, up 16.3% from 2003 – accounting for more than one-third of residential transactions. Numerous factors are fueling this rise, and it is not just the affluent market that is driving the trend. While 64% of second-home buyers are 55+ and wealthy, younger groups and the middle class are joining them.

Being such a dominant factor in the real estate industry, the second home market warrants a closer look. What are some of the issues driving this unprecedented growth?

Baby boomers are hitting their prime.
Without question, this demographic leads the trend. Not only do baby boomers have the means and the motivation to take advantage of the attractive housing market, but they also represent a high percentage of the population. In their peak earning years, many boomers are also equity-rich, with homes that have appreciated significantly over time. That kind of buying power puts them in a prime position to purchase second and sometimes even third homes.

Boomers may be planning to retire in a few years and want to lock in rapidly escalating prices now at low interest rates in order to buy homes that serve as short-term vacation residences and future retirement homes. Or, they intend to work for several more years, but, in the meantime are seeking an appealing recreational attraction for holiday weekends and vacations with children and grandchildren.

In many cases, boomers are opting for vacation properties they can enjoy in the off-season and rent out during peak vacation months, with the goal of covering expenses while the property appreciates.

Boomers tend to buy in either Sunbelt areas for vacation and ultimately retirement, or within two hours’ driving distance for enjoyment with family and friends on weekends. Interestingly, some retirees who initially bought in traditional locations like Florida and Arizona have later opted to return to a location nearer to their family members, perhaps in a resort setting but closer to home.

Wealthy Americans are ramping up home purchases.
Despite what some consider a tepid economy, the number of wealthy Americans continues to rise. The number of millionaires in America reached record highs in 2004, hitting 7.5 million – a gain of 21%, the largest jump in the number of U.S. millionaires since 1998, according to the Spectrem Group, a Chicago-based research firm.

And many of these people plan to invest their money in real estate. A recent survey of the wealthiest 10% of Americans revealed that 8% reported plans to acquire a vacation home in the next year, up from less than 6% a year ago. Adding to the volume is the fact that more of these affluent buyers are buying multiple homes, making “second” home somewhat of a misnomer.

This wealth is spurring a new kind of second home. While 20 years ago the second home was a small cottage at the beach or a rustic A-frame in the mountains, today it is the ‘dream’ home for many, which is often more palatial than the primary residence.

Career issues drive second home sales.
Longer hours in the workplace, two-career families and other work-related issues can spur the desire or need for second homes.

An increasing number of couples include one retiree and one spouse still in the work force, resulting in ownership of one home in a lake, golf or beach community as well as a condo or cluster home near the workplace. Dual career couples with jobs in different cities might also require homes in each location.

Corporate upheavals can impact the need for second homes, causing some workers to opt to buy a small condo and commute for a time to ensure job security before they uproot the family. Long hours in the office lead some commuting executives to purchase pied-à-terres in the city to give them a place to stay overnight. (This is also a growing trend for suburbanites who want to spend weekends in the city.)

Extra work hours can also impact the location of recreational homes people are buying. As Americans spend more time at the office, they find that three and four-day weekends are often more doable than week-long vacations in remote destinations. They are seeking weekend retreats within driving distance…lake, shore, golf or mountain properties that serve as a hub for extended family and friends without incurring significant travel expenses.

Moderate income families are also getting in on the trend.
As noted previously, these days, acquiring a second home is not something reserved for the wealthiest Americans. More moderate income families are finding reasons and ways to get in on the action. A recent presentation by NAR Chief Economist David Lereah, Ph.D, noted that the typical investment home was valued at $148,000, while the typical vacation home was valued at $190,000 – lower than the million dollar dream homes some would expect.

Low interest rates and creative financing options – such as interest only loans – have also fueled the second homes boom. Other families are making it happen with shared purchases, going in with other family members or friends to share the costs and justify the usage of recreational homes. This arrangement allows them to attain something they might not be able to without pooling resources.

Others have different reasons for buying. Many families are opting to purchase condos for their undergraduate or graduate school children as a quasi-investment and as an alternative to campus housing, which can be expensive, scarce or undesirable. Some are buying around campus for a different reason; rabid football fan alumni desire a place to stay when they go back for football weekends. This trend has become prevalent enough that there are actually time-shares based around it. We have started to call these “event” homes.

What it means…
Clearly, the second home market is big business for the real estate industry, with no signs of slowing down. Impacting markets across the country and demographics across the board, second home and investment purchases represent a whopping 36% of the home market. Real estate professionals who tune in to the desire of customers for multiple homes – whatever their reasons – will enjoy greater success and capture more business from their client base. Agents who promote their ability to help clients buy second homes elsewhere can enjoy significant incremental referral income…and if the client is also a friend, maybe the loan of a weekend getaway in the process!

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Baby Boomers Driving Second Home Sales

Baby Boomers Drive Second-Home Purchases
Approximately 35% of all home sales in 2004 were second-home purchases, and baby boomers make up the majority of buyers for this growing trend. Boomers have both the means and the motivation to take advantage of the attractive housing market, and they represent a high percentage of the population.

Boomers, who were born between 1946 and 1964, now aged 41 to 59, definitely have the means. They are in their peak earning years and many are also equity-rich, with homes that have appreciated significantly over time. Match that buying power with low interest rates, and they are in a prime position to buy a second and sometimes even a third home. Many of them remember 18% interest rates of the early ‘80s, making today’s environment even more attractive.

Baby boomers also have the motivation, buying for vacation, investment, and other reasons. They may be planning to retire in a few years and want to lock in rapidly escalating prices now at low interest rates to buy a home that serves as a short-term vacation residence and a future retirement home. Or they intend to work for several more years, but are seeking an appealing recreational attraction in the meantime for their children and grandchildren to enjoy holiday weekends and vacations.

In many cases, boomers are opting for vacation properties they can enjoy in the off-season and rent out during peak vacation months, with the goal of covering expenses while the property appreciates. They may share such purchases with other family members to accomplish their objectives. Builders have created or partnered with property management companies to handle rentals and absentee ownership details for such buyers.

Vacation purchases are occurring in the obvious resort locations – Myrtle Beach, Atlantic City, Naples, Cape Cod, Panama City, and the like. But, in addition, many sales are being made in metropolitan areas, led by Las Vegas, West Palm Beach, Tallahassee, Reno, Orlando, Honolulu, Charleston and Miami.

Boomers tend to buy for either vacation or retirement in Sunbelt areas, or within two hours’ driving distance for weekend enjoyment with family and friends. Interestingly, some retirees who initially bought in traditional locations like Florida and Arizona have later opted to return to a location nearer their family members, perhaps in a resort setting but closer to home.

In addition to recreation, boomers buy second homes for other reasons too, such as commuter marriages and college-age children. An increasing number of boomer couples include one retiree and one spouse still in the work force, resulting in ownership of one home in a lake, golf or beach community as well as a condo or cluster home near the workplace. Others are buying homes for their undergraduate or graduate school children as a quasi-investment and lodging solution during those years. There are even “event homes” like weekend condos marketed for football weekend use by alumni. And, of course, there are the traditional investment rental property purchases.

Baby boomer behavior differs dramatically from that of previous generations and influences both their propensity for buying second homes and the kinds of homes they are buying:

  1. They are much better-educated and comfortable with large-scale purchases like real estate.
  2. They are investment-conscious, knowing that their requirements to be comfortable in retirement exceed those of their parents.
  3. They have a much younger self-perception: today’s 60 is yesterday’s 45.
  4. They are more active and prefer to be in inter-generational communities with an abundance of recreational options, from fly-fishing and hiking to golf and skiing.
  5. They value family, and they view their homes as the center of family gatherings.
  6. They are healthier and will live longer.
  7. Home is a statement of who they are…more individualized, less cookie-cutter, with their individual choice of design and amenities.

In all baby boomer second-home purchases, investment is an important motivator, as boomers look to diversify their portfolios with real estate. While we hear comparisons between the stock market and real estate, the two are actually very different investments for many reasons including:

  1. Stock purchases are relatively quick and easy, while real estate is time-consuming.
  2. The transaction costs are minimal for stocks compared to real estate.
  3. The motivation to buy stocks is purely financial, while a real estate purchase is partly financial and partly tied to the desire for life experiences.
  4. Stock purchases are made with no questions asked, while real estate purchases – at least those with financing – receive mortgage lender scrutiny.
  5. Stocks experience price declines on a daily or hourly basis, while there has been no national housing price decline since the 1930s.

In both types of investments, though, speculation can lead to unfortunate results. Red flags do exist for the practice of trying to “flip” properties in the short term for a significant profit, as well as for looser lending practices leading to an unhealthy

proportion of interest-only and adjustable rate mortgages. The rise of these practices in overheated markets with lower affordability is a recipe for trouble.

Nevertheless, if undertaken appropriately, real estate investments can outperform stocks, create wealth, offer the best form of leveraged investment, provide great tax benefits and government subsidies, and generate social benefits to both the property owner and the community.

All of these factors help explain why baby boomers are such a driving force behind the housing boom in general and the second-home market in particular. Given that about two-thirds of the nation’s housing stock was built before1980, many boomers are ready for a change. It’s why their vacation homes may be larger, newer, and more expensive than their primary residences and why these second homes may, in fact, be their ultimate dream homes.

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Understanding Closing Costs

Real estate closing costs explained
Closing costs can add thousands of dollars to the cost of a home, so it’s essential to know what to expect. RESPA stands for Real Estate Settlement Procedures Act, which requires lenders to disclose information to potential customers throughout the mortgage process. Lending institutions must fully inform borrowers about all closing costs, lender servicing and escrow account practices, and business relationships between closing service providers and other parties to the transaction. For more information on RESPA, visit the U.S. Dept. of Housing and Urban Development’s s Web site and search on the term "RESPA."

Under RESPA, a lender must give you a good faith estimate that lists all fees to be paid before closing, such as loan origination fees, prepaid items such as mortgage interest, escrow items to be deposited, title charges, recording fees, and any miscellaneous settlement charges such as express mail charges, and any escrow costs you will encounter when purchasing a home.

Another aspect of real estate closings is the creation of a public record of the sale. Any time a piece of real estate is sold, certain records derived as a result of the real estate closing are entered into the public record. Transfer of title and deed get recorded at the county clerk’s. Usually a "recording fee" is included in closing costs. This is the fee charged by the closing company to record the real estate transfer with the county clerk or registrar. This fee is charged to the closing company by the registrar. You will receive a copy of the public record at closing. Should you need additional copies of these records, you will usually need to pay the county clerk or registrar for them.

Timing on closing can vary widely. Depending on the specific circumstances of the sellers and buyers, as well as the general load on the mortgage and closing companies, it usually takes anywhere from three to eight weeks before closing on a home. In that time, you’ll have a home inspection conducted, the mortgage lender will process your application, and the closing company will prepare all the closing documents, including a list of the real estate closing costs, which generally cannot be calculated until just before the actual closing. Review all documents for mistakes before signing any closing paperwork.

Making an Offer

Making an offer on your home
You find a new home. You decide to make a real estate purchase. You make an offer? Easy. Right? Not always. The advice below will help guide you through this process.

If you are purchasing a new construction home or condominium, you have it easy. You pay what they ask. Sometimes demonstration units are discounted, or you can choose from upgrades, but, generally, if you like it you pay the price. However, if you are purchasing a home or condominium from a private owner you have a much more complicated process.

Whether you are buying real estate or selling a home, consider the sale of a home as a mutually beneficial transaction. It is true that an asking price is exactly that — an asking price, but very often buyers and sellers become emotional, feel slighted or even offended if neither party makes responsible and realistic offers. For all purposes, this is a business transaction that requires multiple parties and often outside services and financing (which often require more time than most people think). The key, however, to moving the entire process along is an agreement—legally binding—between the buyers and sellers of homes.

The Offer Process
The buyer gives an offer to a buying real estate agent who writes an offer letter. The buying real estate agent meets with the selling real estate agent (usually with the sellers present). The buying real estate agent presents the offer. The sellers decide to accept the offer, counter the offer or reject the offer. Sometimes there are contingencies with the offer, the counter offer or both. A contingency is an offer with a set of specifications or requirements attached. Some of these contingencies include:

  • I will purchase your house if and when I sell my current house.
  • I will purchase your house if you fix the back stairs to the house.
  • I will purchase your house if my mortgage loan is approved.

Sellers can also add contingencies in their counter offers. Also, either party has a time limit set to respond to the offer/counter offer and can withdraw it prior to that time if there is no response. Doesn’t this make buying a car seem simple?

From the Seller’s Perspective
There are two crucial factors in selling your home. How much you are willing to accept for a home and under what time frame. Price goes a long way in determining how quickly a home will sell. Legally any real estate agent representing a buyer that is interested in a home must present an offer to your selling agent regardless of the amount offered. Take an offer seriously, and don’t get offended if it is below the price you are asking. You can always reject an offer.

Unless you accept earnest money with an offer that has contingencies you should add your own contingency that you can continue to market your home in case the contingent offer falls through. Earnest money is a non-refundable deposit of sorts. You should also set as tight a time limit on a contingency period that a buyer sets. If you are accepting bids during a contingency period and another offer comes in you can accept that other bid if you give the first buyer notice and a time period to respond. For instance if you are waiting in a contingency for the buyer’s own house to sell and another offer comes in for your home, you can give 48 hours for them to close on your house, making their contingency on selling their house to buy yours null. The buyer may very well go ahead and close on your house even though they have not sold theirs.

If you have multiple bids you do not have to accept the higher offer. Sometimes some things may be more important. For instance, it is not uncommon for developers to come into established communities to purchase smaller homes, tear them down and build a new larger home. Maybe you would rather a family purchase your home instead of a single person. Legally you can not discriminate against a buyer because of race.

As a seller, use the following guidelines:

  • Let your real estate agent do the negotiating.
  • Look at all offers seriously.
  • Don’t get emotional over offers.
  • Be open-minded to all buyers of homes.
  • If you make a counter offer make the best one possible.
  • Don’t judge buyers by appearance.

From the Buyer’s Perspective
The process begins with a warning for home buyers. Because the commission that the buying agent gets comes from the sale of the home and hence the seller, your buying real estate agent may have legal responsibility to the seller of the home. If this is the case they are legally an “underagent” or “sub-agent” for the seller. Even though they are helping the buyer in the process they have disclosure responsibility to the sellers. This means if you disclose a bid but tell the agent you would be willing to come up if they reject it, your buying real estate agent would have to reveal that to the sellers if they ask. In some states there is "buyer agency." Buyer agency means a real estate agent is contracted to work exclusively for the buyer and that real estate agent has legal responsibility to the buyer. If your state has an underagent arrangement (the agent buyer is responsible to the seller), don’t be dismayed. Although this is not ideal, it has worked fine in states for a long time. The main thing to do is ask the real estate agent to whom they are legally responsible and to not divulge information that the agent would have to reveal to the seller. In other words make a bid but don’t talk about how you’ll offer $125,000 but would be willing to pay $140,000.

When you are seeking to make an offer make your most reasonable offer. You aren’t haggling over a used car, and it is unlikely that the buyer will make more than one counter offer. When you are seeking your deal make sure you understand all the items included in the sale. If you want the kitchen appliances make sure that is understood. Items that are permanent attachments are included in the sale of a house but if there is some special item, for instance an antique chandelier, make sure it is part of the offer. The last thing either a buyer or seller needs to do is haggle over an old stove. Closings have failed for less.

As a buyer, use the following guidelines.

  • Let the real estate agent do the negotiating.
  • Do not call the seller.
  • Don’t give a rock bottom bid unless you are aware that the seller is open to them.
  • Include everything in the bid that you want, including inspection service, repairs, appliances, etc.
  • Don’t request personal property, including washer and dryer unless you know they are looking to leave it.
  • If the seller is present during viewing don’t give your personal opinions about the home.

Crested Butte and Gunnison Real Estate Market Report

Entire GUNNISON AND CRESTED BUTTE MLS
559 listings from Round Mountain North (Crested Butte South to Mt. Crested Butte)
80 listings Under Contract = 14% of the total market is Under Contract

Average Price of listings Under Contract = $ 853,434

TOWN OF CRESTED BUTTE MARKET REPORT

85 listings in Town (includes Residential, Commercial and Land)
17 of which are Under Contract = 20% of all CB listings are U/C
46 Residential listings in Town
8 are Under Contract = 17% of Residential listings in Town are U/C

TOWN OF MT. CRESTED BUTTE REPORT

205 listings in Mt. CB (includes Residential, Commercial, Land)
18 are Under Contract = 9% of all Mt. CB listings are U/C
177 Residential listings in Mt. Crested Butte
15 are Under Contract = 8% of Residential listings in Mt. CB are U/C

STATE OF THE SOLD MARKET as of January 25, 2006

Jan. 1, 2005 – Jan. 25, 2005: 30
Jan. 1, 2006 – Jan. 25, 2006: 12

Average Price for Jan. 1, 2005 – Jan. 25, 2005: $ 378,222
Average Price for Jan. 1, 2006 – Jan. 25, 2006: $ 719,538
Total Sales Volume Jan. 1, 2005 – Jan. 25, 2005: $ 13,994,200

Total Sales Volume Jan. 1, 2006 – Jan. 25, 2006: $ 8,634,450

Contact Channing Boucher for additional information at 970-596-3228

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Get a Good Deal on Real Estate

Buying a home is very often an emotional process especially if it’s going to be your primary residence or perhaps a second home in some far-off ski town in the Rockiers. Well, buyers, fear not — just make sure you review these helpful tips before you make your next offer on a house. It could give you an advantage over another buyer in the market.

Determine true market size.

There may be plenty of homes in a particular area where you are house hunting, but that doesn’t mean that they’ll all be suitable for your needs. Identifying how many homes actually could be right for you will help to determine your negotiating power. Choices are always critical to creating a better deal.

Look for vacant properties.

Finding properties that are vacant is a good opportunity to get a deal. Very often sellers might have moved out because they purchased another home and they don’t want to now have to carry two mortgages. The longer vacant homes sit on the market, often the more eager and motivated the sellers become to begin negotiating with buyers.

Look for the diamond in the rough.

Have you ever been shown a house and your first thought was, "This is awful. Who would ever live here?" The home sells; the new owner makes a few changes to it and puts it back on the market. You go see it again and it looks completely different — now it’s charming, pleasant and liveable. This is the diamond-in-the-rough scenario. A lot of buyers will pass up a good buy on a home because they can’t see its potential.

Be willing to visit difficult-to-show properties.

Some houses that are considered good buys on the market are the ones that frequently aren’t easy to show. Whether it’s because a tenant is living there and won’t cooperate, the seller has refused to allow a lockbox to be put on the home or the showing hours are extremely limited — regardless of the reason, this is a home you should see. Why? If you have a home for sale with minimal showings, then there are likely very few, if any, offers. It’s the perfect opportunity to bait a seller by putting in an offer.

Be flexible with your closing date.

There are lots of reasons why sellers have to close escrow by a certain date. They may be trying to move to get their children into another school or they may be trying to get another house in the same market — whatever the reason, if you can match your closing date with the seller’s you might get the best deal on the house. Make sure you know when the seller wants to be out of the house before you put in an offer and then do your best to meet the seller’s closing date.

Shy away from price-per-square-foot method.

This method only determines the square footage of a home, but it leaves out upgrades such as recently-remodeled kitchens or bathrooms. It also doesn’t take into account homes that have views or are located on very busy streets. It gives you an idea of what you’re paying per square foot, but other details about the home may be the reason it is priced higher or lower than a home in the neighborhood with similar square footage.

If you can keep your emotions in check, practice patience and follow the tips in this column, you’ll find you’re in a better position to get the best deal on your next home.

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