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Bungalow bargains drive local buyers to resort real estate

This custom home at Tamarack is priced at just less than $2 million. While custom homes have accounted for nearly a quarter of Tamarack's resort real estate sales since 2009, $2 million is on the high end of what buyers are willing to pay. Photo courtesy of Prudential Idaho Realty.

Ski resort real estate in Idaho is affordable and selling fast, and more Idahoans are taking advantage of the drop in property prices.

“We’ve been selling like gangbusters,” said Trisha Sears, Tamarack Resort sales specialist with Prudential Idaho Realty. “The majority of our new homeowners are Idahoans or close by. … It’s been a big shift.”

Sears said a lot of the original buyers for resort property at Tamarack were speculators and investors hoping to rent and/or flip the properties. From 2004 to 2007, real estate firms sold 656 properties at Tamarack.

“Interestingly enough,” Sears said, “most of those had mortgages on those properties.” When the real estate market crashed in 2008, a lot of those people walked away from the mortgages. Sears said today’s buyers are end users.

“They’re here much more frequently,” she said. “That’s been good for the energy of Tamarack Resort.”

Tamarack, located west of Lake Cascade between Cascade and Donnelly, has had a tumultuous history. In 2008 the resort’s majority owner, Jean-Pierre Boespflug, defaulted on a $250 million construction loan. Boespflug was unable to borrow enough money to support spending on the resort, and he has since disappeared.

Credit Suisse Group has $300 million in claims against the resort, and has been cleared to pursue a sheriff’s sale of the resort. Additional creditors are awaiting permission to move forward on their own foreclosure bids.

Despite the resort’s financial woes, the Tamarack Municipal Association, comprising 365 homeowners, plans to bankroll the 2012-13 ski season.

Patrick Werry, a sales associate for Century 21 Riverstone in Sandpoint in far northern Idaho, said he is also seeing an increase in the number of buyers who are making frequent use of properties they own near Schweitzer Mountain Resort, located about half an hour northwest of Sandpoint.

“A lot of them like to have that option (to rent), just in case,” he said.

“We’ve seen a lot more people from Boise and the Treasure Valley than we’ve seen in the past,” said Todd Conklin, CEO of Coldwell Banker Distinctive Properties, which sells real estate in Sun Valley and the surrounding Wood River Valley. “The numbers have been staggering.”

Conklin said that in the past, he thought Treasure Valley residents preferred McCall as the spot for their vacation homes. But now that prices have come down in Sun Valley, piquing Treasure Valley residents’ interest, he thinks perhaps McCall was just more affordable.

Sears said most of her buyers are purchasing properties in the $200,000 to $800,000 range. “It’s still a real comfortable range for people.”

Of the $42 million dollars’ worth of real estate sold at Tamarack from 2009 to 2012, 30 percent was sold in 2009 and 41 percent was sold in 2010, Sears said. Sales slowed in 2011 and 2012 due to low inventory. During 2009 and 2010, Prudential had 65 active listings on average, but “this week, we have only 29 active listings for built products,” Sears said.

In Sandpoint, Werry said the most popular price range is $210,000 to $700,000. Year-to-date, a little more than 30 percent of the 23 homes that have been sold on Schweitzer were in the $200,000 to $300,000 range. In 2011, 45 percent of the 31 homes sold that year were in that price range.

Conklin said the Wood River Valley has had an unusual year: During the first half of 2012, “the high-end (priced around $3 million) was very hot. … That subsided in the third quarter.”

Across the board, inventories are low for ski resort real estate, especially for properties priced below $200,000.

Sears said inventory between $100,000 and $200,000 is essentially gone. If a house comes on the market at a good price, Sears said, “it’s gone; it’s gone quickly.”

“The pent-up demand that everyone speculated about, it’s there,” Conklin said. He said the inventory of properties priced less than $500,000 is exhausted in Sun Valley. “It’s just gone.” He said some properties in that price range don’t even make it to the multiple listing service; as soon as people hear rumors such a property might become available, they start calling around, and the house gets sold. “That’s a whole new world.”

Including an essential amenity – the hot tub – this Tamarack property is a high-end listing at just less than $2 million. Photo courtesy of Prudential Idaho Realty.

Werry said most buyers of ski resort real estate are looking for ski-in, ski-out properties. “Most of them are built for the cabin sort of feel,” he said. Amenities such as hot tubs and fireplaces are essential, but buyers have shifted their size requirements; 1,500- to 2,000-square-foot properties are more desirable than the 4,000-square-foot properties popular in the real estate market’s boom cycle.

While already-built resort properties are an easy sell, bare land is a bit of a challenge.

“It’s such a tight building window,” Werry said. In addition to the fact that the building season is short at high altitudes, the low cost of existing buildings makes it hard for builders to compete.

Conklin said he recently spoke with an architect who has plenty of work, just not in the Wood River Valley. People can buy single-family homes for $300 per square foot in the valley, and “we can’t build it for that,” the architect told Conklin. Even with “a monster drop” in land prices – Conklin said lots in Ketchum that sold for $250,000 in their heyday are now selling for $50,000 – the cost to build is still more than the cost to buy, said Conklin and Sears.

“The construction industry is going to continue to struggle” until the inventory of inexpensive, single-family homes is absorbed, Conklin said. “That’s why we’re all pretty excited that the inventory levels are down.”

Developers are starting to plan for the future, Conklin said. “Definitely we’re seeing signs that things are getting better. … We’re starting to see some interest in land.”

Werry said Schweitzer developers built three homes at the Mountainside development this year and have sold one of those properties.

“That higher-end market is limited … but (developers) see the opportunity there,” Werry said. “(The resort does) have real estate that they’re developing … or that they could develop.”

With average sales prices for resort real estate creeping up, it may be only a matter of time before the cost to build comes more in line with the cost to buy.

Year-to-date, Conklin said, the average sales price for resort properties in the Wood River Valley is $800,000 in 2012, up from $775,000 in 2011, a 3 percent increase.

At Schweitzer, prices made a significantly bigger jump. Data from the Selkirk Association of Realtors MLS show the 2012 year-to-date average sales price is $281,900, up from $221,231 in 2011, a 27 percent increase.

“We’re starting to see an uptick trend,” Werry said.

“It’s great to see,” Conklin said.

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