Ski town real estate

[Paul_M]

Would you you buy now, wait, or no way would I ever dump serious $$$ in a recreational activity?

Looking at skiing somewhere in VT the next 5-6 years and possibly longer. What is your opinion about buying a modest 1-2 bdrm condo at or near a major VT resort over the next few months.

 

[SkiFanE]

IMO, residential real estate should NEVER be considered an investment. We've lucked out and seen appreciation, but you can't plan on it. So look at what it will cost now, and whether you can afford the mortgage now and in the future. Although, with on mountain RE, I think it's a little more volatile than off mountain, and you're probably more likely to lose $. Off mountain isn't as dependent on skier buyers, so I think prices are a little more steady. We had a P&S for our place in the fall and by the mid winter there was a little boomlet and by January when we closed we felt like we got a great deal. Our neighbors thought we were crazy to spend what we did..then the next year they said we got a great deal. I think better deals can be had in the offseason, people have a plan to 'get rid of it by next ski season' and get desperate and drop the price.

So..if you want to ski, buy now if you can afford it. You can't time a market...if you could we'd all be wealthy.

 

[Tooth]

My on mountain place has appreciated approx $150,000 in the last 7 years. My neighbor just sold his place right next door to mine for the same appreciation. Crazy. I think on mountain RE is a good investment. There is only so much ski in/ski out land or housing. Its like a home on the water. Only so much land to build on. Buy ski in/ski out. Its worth every penny. It makes the whole experience way better.

 

[SkiFanE]

My on mountain place has appreciated approx $150,000 in the last 7 years. My neighbor just sold his place right next door to mine for the same appreciation. Crazy. I think on mountain RE is a good investment. There is only so much ski in/ski out land or housing. Its like a home on the water. Only so much land to build on. Buy ski in/ski out. Its worth every penny. It makes the whole experience way better.

Well we bought in '04...8 years ago. And on mountain then was the same as it is now, actually may be cheaper. Really depends on the mountain and how built up they are already. Our off mountain place has appreciated some (maybe 20-30% but we made a cosmetic dump liveable lol..so it wasn't all market driven) and definately more than the on mountain places. I would definately investigate the mountain, my only frame is reference is the one I ski at.

 

[drjeff]

Would you you buy now, wait, or no way would I ever dump serious $$$ in a recreational activity?

Looking at skiing somewhere in VT the next 5-6 years and possibly longer. What is your opinion about buying a modest 1-2 bdrm condo at or near a major VT resort over the next few months.

Who knows what will happen in the next few months?? Especially with the Presidential Elections coming up (not to try and politicize this thread by any means, but the elections may have a big impact on future prices, mortage rates, etc, etc).

Also need to look at what area you might want to buy at. Some have had bounce backs off the bottom of the market more than others. I know that where I'm at at Mount Snow, townhomes in my complex are selling this winter for an average of 25 to 50k above where units of the same size were selling for last year depending on the number of bedrooms and level of up keep. That being said, atleast with my own place, if I put it on the market today, my listing price would likely be somewhere around 50K lower than what I bought it for 5 years ago, and even that price was about 40-50k below where comparable units had peaked about 18 months or so before we bought ours.

Also in VT, with a 2nd home, especially in a resort area, you've got to consider taxes, and also look at what the VT legislature wants to do with it's healthcare plan for residents. There's no way they can deliver the plan they're talking about without having to raise some serious extra $$$ to fund it, and the likelyhood that 2nd home taxes will be part of that revenue source is pretty good IMHO

No doubt that there are some bargains out there right now. If you wait 5 or 6 years to get into the market vs. buy soon, will you regret it?? Nobody really knows that answer.

Personally I just keep in mind the "value" of the family time that our place brings the family. That is a figure that is hard to put a dollar figure on in my book

 

[ScottySkis]

Or buy home in Slc, really really cheap their.

 

[Cannonball]

Pretty much agree with everything that's been said here. Especially the idea of making sure you can afford it and plan to use it versus buying as an investment. But with that said I think there are ways to improve the investment aspect of it. We are a few weeks away from owning our first ski house. We opted for an in-town, single-family, residential house instead of a condo. In a place like Lincoln we felt that the condo fees, quality of construction, and over-saturation of the condo market make it very unlikely for condos to gain value over time. "Real" Real Estate seems to have better potential for long-term value.

 

[SkiFanE]

Pretty much agree with everything that's been said here. Especially the idea of making sure you can afford it and plan to use it versus buying as an investment. But with that said I think there are ways to improve the investment aspect of it. We are a few weeks away from owning our first ski house. We opted for an in-town, single-family, residential house instead of a condo. In a place like Lincoln we felt that the condo fees, quality of construction, and over-saturation of the condo market make it very unlikely for condos to gain value over time. "Real" Real Estate seems to have better potential for long-term value.

Congrats. That's the choice we made and very happy. It's great year round and we can walk to everything.

To OP Now vs. later...if you want to do it, do it now while kids are young. It becomes a lifestyle they adjust to quickly and develop deep friendships. My kids hang out with their ski buddies and see them all over town, They also feel so at home at the mountain, know so many people. The older 2 are sad to see the season come to an end, oldest is real sad, her ski friends have turned out to be her best friends. You never know what market is going to do..but i can guarantee you the kids are getting older and time flies.

 

[Paul_M]

I look at it as an "investment" in my family life, not an economic investment. Enjoy it for a few years, and then maybe break even is all I ask.

 

[rocojerry]

Would you you buy now, wait, or no way would I ever dump serious $$$ in a recreational activity?

Looking at skiing somewhere in VT the next 5-6 years and possibly longer. What is your opinion about buying a modest 1-2 bdrm condo at or near a major VT resort over the next few months.

wait, because i need to buy a primary home before my ski home....
unless I can somehow make the ski home my primary home!

I'm currently leaning towards a nice plot of land, potentially with a view or pond nearby, centered between a few mtns that I could potentially mix it up with over the years with different season passes....

On mountain seems nice, and I echo supply vs demand -- if its 'maxed' out, or restricitions probably prevent more on-mountain homes being built, it could make a bit more sense to go for on mountain.... otherwise, they are just going to build more, so the on mountain convenience and enjoyment factor is the winner versus the real estate value...

realistically, I'll probably start doing seasonal rentals more often to start...

 

[deadheadskier]

I look at it as an "investment" in my family life, not an economic investment. Enjoy it for a few years, and then maybe break even is all I ask.

If you are looking to buy in Vermont, be ready to commit to at least seven years. Severe tax penalties on real estate sales of secondary dwellings within 7 years of purchase. The law is designed to prevent people from flipping houses and drive real estate prices up beyond affordability for locals. Not that real estate is affordable for locals in most VT mountain towns as is.

 

[Cannonball]

If you are looking to buy in Vermont, be ready to commit to at least seven years. Severe tax penalties on real estate sales of secondary dwellings within 7 years of purchase. The law is designed to prevent people from flipping houses and drive real estate prices up beyond affordability for locals. Not that real estate is affordable for locals in most VT mountain towns as is.

I can't speak for VT, but I would suspect that it's similar to NH where as long as you re-buy in NH you can avoid those big penalties. That allows true residents to move around without getting whacked. True in VT yes/no?

 

[deadheadskier]

I can't speak for VT, but I would suspect that it's similar to NH where as long as you re-buy in NH you can avoid those big penalties. That allows true residents to move around without getting whacked. True in VT yes/no?

I believe the penalty is only on second homes. As long as it's a primary residence, you don't get locked into the resale tax assessment.

 

[Paul_M]

If you are looking to buy in Vermont, be ready to commit to at least seven years. Severe tax penalties on real estate sales of secondary dwellings within 7 years of purchase. The law is designed to prevent people from flipping houses and drive real estate prices up beyond affordability for locals. Not that real estate is affordable for locals in most VT mountain towns as is.

Thanks. Good info.

 

[NotEasyBeingGreen]

No way it's going to happen for us. If we end up with a home closer to a mountain, it will be a relocation, not a second mortgage. I'm plenty happy with finding bargains on HomeAway - we've always had to travel that way (5 kids total!) instead of hotels for the week-long vacays and I've found the deals are just as plentiful in the mountains as at the beach.

 

[Geoff]

I bought in 1993 after real estate collapsed in 1989/1990. 20 years later, my place didn't even track inflation. My cost of ownership is about 4x what it was when I bought it. I'm at the point where I need to sink some money into the place remodeling but I'm hemorrhaging cash into my flatland place remodeling there and I don't have the cash flow to do both at the same time.

If I had to do it over again, I'd go with seasonal rentals. It gives you the flexibility to walk away at the end of the year. It gives you the flexibility to skip a year if something funky happens to your finances.

 

[RichT]

Paul, my two cents. Have you been driving to VT each weekend very long? I've been doing the drive from Rockland to Hunter for over 25 yrs 103 miles door to door 1 3/4 hrs (we built our home up there 22 yrs ago). Spent some years going up 40-45 weekends! Think about doing the drive........for me it's cake, but to Killington (which I did for two seasons) sucked! To far and the fun dies quickly> JMHO

 

[Geoff]

If you are looking to buy in Vermont, be ready to commit to at least seven years. Severe tax penalties on real estate sales of secondary dwellings within 7 years of purchase. The law is designed to prevent people from flipping houses and drive real estate prices up beyond affordability for locals. Not that real estate is affordable for locals in most VT mountain towns as is.

The law is 6 years, not 7. It was designed as an anti-subdivision law. What ended up happening is that developers built condos instead since those don't fall under that law as new construction. For some strange reason, condo resales do fall under the law.

The penalty declines each year so in the 5th year, it's only 5%. The tax is only on the land, not the buildings on the land. Unless you have a bunch of acres, most of the value will be in the buildings so this is rarely much of a tax.

The bigger deal is that you have to pay Vermont income tax on your gains as regular income. For a vacation home owner, you get screwed. They have a graduated income tax but you have to count all your other income sources first to set the tax rate for your gain. If you make $200K in income and have a $50K gain on your real estate sale, you pay the top brackets. Most people who can afford a vacation home will pay 8.80% or 8.95% Vermont income tax on the gain.

The Act 68 state school property tax makes for pretty stiff property taxes. The non-resident rate is 1.38%. Municipal taxes push that well above 2%.

 

[BenedictGomez]

I would never buy a vacation home, as it's typically one of the most destructive things you can do with your money (unless you're so wealthy you just dont care).

But beyond that fact, I think right now is a terrible time to buy a house to begin with.*


*Yes, I'm more than aware that all the "experts" say exactly the opposite

 

[jlboyell]

i have friends that have bought houses and are underwater. for the first time ever im glad i rent.