state exactly how far prices have come down, but consider it safe to say between 10-20% and still falling. As credit remains tight, we are beginning to see the affects of individual catastrophic conditions affect the larger market.
So, if prices are dropping, how do you know when it is time to possibly jump back into the game, whether that be in to the financial markets or real estate? According to Warren Buffet in the NY Times Op-Ed from 10/16/08, “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.” Another noteworthy investor, John Rockefeller said “The time to buy real estate is when blood is running in the streets.” I think I can safely say that I see fear and maybe even some blood.
So, let’s look at some of the positive factors which continue to influence our valley and the value it offers to its residents and property owners. The obvious attraction is that everybody wants to live here. Our valley has abundant natural resources and lends itself to an unsurpassable quality of life. We are so much more than a ski town now and our economy is a reflection of that. Jonathon Schecter of The Charture Institute in Jackson Hole WY stated that 75% of the homes in our valley are now primary residences.
In Eagle County is a result of technology, economy, transportation, mores (values) and virtual urbanization, and these factors will continue to attract new residents. While the ski industry is certainly still very important, it is not what will be driving our economy in the next 20 years. According to James Chung of Reach Advisors, Vail and other ski resorts are ½ way through the fortuitous affects of the baby boomer generation. After age 47, there is a precipitous drop in the number of skier days, and the average age of a ski-home buyer is 47. The ski industry will reinvent itself once again as it has done so well in the past. Skiing went from being the hippy, anti-establishment culture of the 60s and 70s to the high-flying yuppie sport of choice in the 80s to the year-round place to share family values and traditions in the 90s and into today. Our resort is becoming a more year-round destination with the continued growth in summer and shoulder season attractions and events such as BRAVO and world-class art, food and sporting festivals. Keeping an eye on changing demographics will be important for future marketing and positioning.
In 25 years, the US population will be 50% minority and 50% Caucasian. The US is also beginning to experience a reverse gender gap in major cities as women are earning bachelor and master’s degrees at the rate of 1.5x that of men. Women in major metropolitan cities make 100-120% of men’s compensation. Currently, men account for 60% of skier traffic.
So, how will Vail maximize this knowledge and position itself in order to attract minorities and women to skiing and recreating here? Lastly, more statistics from James Chung reveal that US ski resorts have an average inventory of unsold real estate of 41 months. Vail Village only has 21 months of inventory. The reason that Vail is positioned better than most other resorts are its proximity to a major population center such as Denver, Vail did not overbuild (questionable?) and that Vail has an economy beyond the slopes. The best news is that real estate prices are very, very likely to go up again. Will you be along for the ride?
To read the entire report from the “Surviving the Economic Storm 2008” symposium, please click on the following link. This Economic Council of Economic Activity site has very interesting stories and statistics:http://www.economiccouncil.biz