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post #61 of 75
Quote:
Originally Posted by breckview View Post

 

On the day of the exact bottom (if that were able to quantify), it will be the time when most people believe exactly what you believe.  That is, that lower prices are coming and people should wait.

 

  .  I bought real estate at pretty much every market low since I was a kid in the late 1970s to the 2002 low, and it always paid off very well.  All those times appeared similar to how it appears now.  Extreme negativity about the future based on seemingly very logical arguments.

 


 

We should invest together.  I can't figure out bottoms, but I hit the exact peak in two markets.  As you say, in both cases, everyone thought I was selling too soon and that significant upside remained.  Extreme optimism based on logical arguments.

 

Markets and human nature are amazing things.  Last summer when oil was $147 I voiced the opinion that oil would not make it to $200 a barrel, and that $70 would be seen in a year or two.  Most people thought I was crazy, and proceeded to explain to me how this time it was different. Didn't matter that I know something about the industry, oil was just going up forever.  I never would have guessed $35, but the point is that as you say, the consensus is not often correct. 

post #62 of 75
Quote:
Originally Posted by MattL View Post

 

 

That is true, but nothing has been 'normal' about these market events, the upturn could very well be just as different. We just don't know. Personally I think there will be bigger, faster bounce than we usually see in all types of markets when this is all over,but that is pure gut feeling. I'm usually pretty intuative about these things, unfortantely I second guess myself and kick myself later (like passing up $10,000 in Google IPO stock at $85).


 

I'm the pessimist here. I think the only thing "different" about this market is it'll be worse than any of us can personally remember. And my gut feeling is it'll rebound much slower instead of faster. With banks becoming stingy with lending and most people's saving evaporated in the stock/housing market, I just don't see where the money can come out from to fuel a fast housing recovery. The only way houses can fly off the market is at half price! :(

 

So for investment property, I'm incline to wait some more. The money you may save could fund a pretty good skiing season in places you REALLY want to ski.

 

On the other hand, if you're planning to USE the ski house for your own pleasure of skiing, buy now means you get to use it instead of paying yet another season of rental! 

 

Of course I could very well be completely wrong! ;-)

 

 

post #63 of 75

I agree that the best location is the one you will enjoy the most.

I also think the most important point right now is to wait. Asking prices at most resorts are not down as much as the housing market overall. A lot of owners are holding out in hopes of getting out of it what they have in it. As long as owners have the property listed at close to what they have in it they may not have to recognize the loss on their financial statement. Later this year banks will be pushing more property into foreclosure, either the primary residence or the vacation condo.

In the spirit of full disclosure I did not follow this advice since I never thought things would get this bad. I do know that ski-in/ski-out property I looked at two years ago is still advertised at the same price it was two seasons ago! Surely they will take less today, but they certainly are not moving aggressively.

post #64 of 75

Not to get to personal but I think people could point you in a more correct direction if they knew what kind of money your looking to spend. No need to be telling you Breckenridge if your looking to spend 150K.

post #65 of 75
Quote:

 I do know that ski-in/ski-out property I looked at two years ago is still advertised at the same price it was two seasons ago! Surely they will take less today, but they certainly are not moving aggressively.

This is key here.  As an owner of a ski in/ski out condo our rentals/value of our units are just as good this year as last year (so far) and there hasnt been much change in the last 3 years - we average 75% occupancy during ski season which covers approximately 75% of our cost (mortgage and HOA dues) - our summer rental rates/occupancy is much lower and covers another 10%.   A properly managed/marketed ski in/ski out in a primo location is just not going to fluctuate that much. 

 

I also recommend buying one in a resort/town where you will enjoy it the most - not necessarily a resort where the best deal is.  If you only visit 2-4 weeks a year and you want to cover most of your costs by rental income - pony up and get a ski in/out in the best location you can afford.  A huge consideration after the obvious price you pay for the condo/home that is often overlooked is the rental history and management rental agreement.  There are some well managed properties that only take a 25% fee from the owners for the rentals and their are others that take 40% or more.  Therefore, the best price for a rental property may not be the best deal in the long run if another property is better managed/marketed and has other income potential to lower your management fee ie. restaurant, ski locker rentals, etc.  If you will spend 4-6 months a year there and do not mind if it is not ski in/out and do not depend on rentals to cover the majority of your costs - you will have more options and good deals to consider in properties located off slope...

post #66 of 75
Quote:
Originally Posted by breckview View Post

 

I'm not going to say this is a "good time" because I don't know.  Nobody knows when the final bottom will be in.  But one thing is for sure...  On the day of the exact bottom (if that were able to quantify), it will be the time when most people believe exactly what you believe.  That is, that lower prices are coming and people should wait.  The reality is that the perfect time to buy will be a period (probably a year or so) when inventory is high and sellers are most pessimistic.  That period may or may not have started yet.  It's impossible to know for sure.  Those who want reward will be required to step up to the plate and take the risk.

 

That is how markets work.  Right now it appears there is great risk (which may or may not actually be true).  By agreeing to take on that perceived risk, you get a low price.  Once the market believes the risk is gone, prices will no longer be low.

 

Risk is clearly diminishing, I just think it has a good ways to go before if reverses course. One thing that should give investors pause is that markets typically regress to the mean, and often overshoot it, on both the up and down sides. It very well could be a great time to buy judging from market sentiment, on the other hand there are a lot of unknowns still lurking out there and sentiment could get a whole lot worse. I’m certainly not suggesting that anyone try to time the market bottom, I’m just saying that using discounts from peak bubble prices is perhaps not the best metric to use in judging current values. 

 

 

post #67 of 75
Quote:
Originally Posted by hobbes429 View Post

 

I wasn't looking to turn this into an investment advice column ... I happen to agree that some cautious cost averaging into the market at these levels may not be a bad idea depending upon one's investment objectives.  That's neither here not there ... you know what they say about opinions! 

 

I'm really just looking for some real estate market insight here ...

Frankly, I really don't think the RE market is a good place to put money for at least 12 months. I have been watching properties in Mammoth CA, and have found that market to be very weak and at a late 2002 level to attract buyers. General consensus of the Case Schiller index is that RE prices will tank another 14% on average over the next 12 months. Buying a Rydex 2X S&P 500 long Index fund at this point is very likely a much better investment with the S&P at 770 on Friday.

Just my 2 cents

post #68 of 75

Stumbled upon this post and would be interested to hear people's views on this thread 3 years later!

post #69 of 75

I was in Steamboat last month and a resident there told me housing prices are still low, approximately at 1999 price levels.  With current super low mortgage rates seems like opportunity is knocking.  Believe member here Finndog has a property for sale there.

post #70 of 75
Aspen prices are pretty firm, but downvalley is still very soft. I just closed on a house in Carbondale, CO., for about half what it cost to build in 2007.
post #71 of 75

In the west, Mammoth and Lake Tahoe, stuff that sells seems to go at about a 2001 price level.  I am not super optimistic we are at the bottom of this cycle, so I continue to watch and wait on buying that 2nd home.  As far as rates are concerned, typically as rates go up, the market stalls out even more creating more downward pressure on prices.  Just one more reason I am not super convinced we are anywhere close to a bottom.  If properties are not selling like hotcakes with a 4% 30 year fixed, what will happen when they go to 6%-7%?

post #72 of 75

Anyone know what real estate is like around Big Sky? From a pure skiing perspective, I always felt like that was a good area to invest - a huge resort that has the potential to be the next Jackson/Aspen/Vail but remains a less crowded, more off-the-radar destination. Don't know anything about the real estate market there, though.

post #73 of 75
Quote:
Originally Posted by JoeUT View Post

Anyone know what real estate is like around Big Sky? From a pure skiing perspective, I always felt like that was a good area to invest - a huge resort that has the potential to be the next Jackson/Aspen/Vail but remains a less crowded, more off-the-radar destination. Don't know anything about the real estate market there, though.



Good point.  From my perspective, it is very hard to get in/out of MT with very limited flights (and expensive).  However, this could be a chicken/egg thing.  I recall not that long ago having the same issues with JH, etc.

 

Don't know much about RE near Big Sky, but I have family in the area, so I might inquire.

post #74 of 75

All I know is that years ago we were looking for real estate in MT...before it got expensive and then crashed... And it's a heck of a lot pricier in Big Sky than elsewhere. I guess if you want to invest and not live there, it would eventually be a good investment. But then you are limiting your audience to people who want to buy rental properties or a vacation home. Realistically, living in Big Sky is NOT what I would want. MILES to Bozeman and not that great a road.

post #75 of 75

I've owned a condo at Killington, VT for over ten years and it's in the resort's short term rental management program.  Even with the recent price drops, it's worth double what I paid, and net rental income covers a good percentage of costs.  And I use it for skiing about 50 days a year plus visits in summer and fall foliage.  I'd do it again in a heartbeat.

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