Perfect Snow Causes Million-Dollar Impulse Buys Among the Super Rich
Last winter, the stars aligned for skiers across the western half of the United States. Resorts such as Aspen in Colorado, Park City in Utah, and Sugar Bowl in California saw record or near-record snowfall.
Now, as home sales in those resorts enter this year’s fourth quarter, traditionally their peak sales season, multiple brokers are saying that they’re seeing a direct relationship between last year’s conditions and this year’s sales.
“Historically, we sell more real estate in September and October than any other month,” says Breck Overall, a Sierra Sotheby’s International Realty broker based in California near Lake Tahoe. “But lines have been a little blurred because it was such a good ski season. This year we’ve seen sales start in June.”
The third quarter of 2017, he says, “was the strongest quarter in our history.”
In a certain respect, this makes intuitive sense: A miserable ski vacation isn't going to seal a $10 million deal. “Without a doubt, the snow conditions greatly influence a buyer’s perception of the market,” says David McHugh, a LIV Sotheby’s International Broker based in Beaver Creek, Colo. “That’s what gets them to buy here. If there aren’t good conditions, it’s like going to Disney World when it’s raining.”
But the spike in sales following last year's season had led to a phenomenon that goes beyond mere common sense. Vail has seen a 13 percent year-to-year increase in sales volume during the first half of 2017, according to a Douglas Elliman/Knight Frank ski property report (PDF). In the first eight months of 2017, the report says, Aspen has seen 26 sales priced above $2,000 per square foot; in contrast, in 2015, that price point saw a total of 13 sales for the whole year.
Not Just Powder
Steven Shane, a Compass broker based near Aspen, cites such external factors as a booming U.S. economy and the siren song of the now world-famous Aspen lifestyle that have driven home sales up 56 percent vs. the same time frame last year.
“There might be people who say, ‘I’m not going to miss another epic ski season like what took place last year,’” Shane says. “But do I think it’s the driving impetus for someone to buy a home in Aspen? No, I think it’s a longer-visioned approach.”
Christine Grenney, a Summit Sotheby’s International Realty broker in Park City, points to similar quality-of-life factors to explain the area’s booming sales. (In the area’s Old Town, sales are up 48 percent in dollar volume from last year). “For years, I sold homes to locals who were upsizing or downsizing,” she says. “Now I’m seeing a lot of people pick up their kids and move from places like Greenwich, Conn.”
Even so, she says, the area’s spectacular snowfall might have had an outsize impact on 2017 sales: “Twenty-five percent of the properties I’ve sold this year have been to people who were making a decision based on their vacation,” she says.
Raifie Bass, a broker for Douglas Elliman Real Estate in Aspen, says the effect of conditions on the slopes pales in comparison to conditions in the energy market: “We look at the stock market and oil prices,” he says. “We have a lot of Texas buyers, and however the oil market is doing is a great indicator as to how our market will go.”
Aspen, he says, “is the 1 percent of the 1 percent,” and the .01 percent, from Bass’s perspective, is doing great. “People who have money in equities have more money than they’ve ever had.”
What They’re Paying and Who’s Buying
In Vail, Colo., broker McHugh says he’s seeing the biggest turnover in homes priced from $5 million to $10 million. In nearby Beaver Creek, he says, the number is slightly lower.
Eleven percent of McHugh’s buyers are international, “but the hard part is that a lot of our clients will set up a U.S. corporation to handle that asset,” he says. “So I really think it’s actually as high as 20 percent on the international spectrum.” Buyers from Texas, he continues, represent nearly 22 percent of his domestic market.
In Park City, the $2 million to $4 million range has experienced immense activity, Grenney says. “You’ve got a median single-family-home price of $1.9 million.”
In Tahoe, $5 million to $8 million sales are regularly seen along the shore of Lake Tahoe and in Martis Camp, a 2,177-acre development that features a private chairlift connecting to Lookout Mountain. Prices in the area, says Sierra Sotheby’s broker Overall, can exceed $10 million.
Aspen sales are higher. “I think we’ve seen something like 50 sales north of $7 million,” says Bass, the Elliman broker. “It’s a healthy market here.”
Only when you get to Sun Valley, Idaho, do prices seem to sink to something the merely upper-middle class can hope to afford. “Most of our volume is in the $1 million to $3 million range, says Tom Drougas, a broker for Christie’s International Real Estate. “Things start to thin out above $3 million.”
He acknowledges that good conditions certainly help rather than hurt his sales (“I don’t think there’s any question that deep-powder skiing is something people love”), but he emphasizes that his area benefits from its resort owners’ intensive investment in man-made snow machines. “We’re in an era where people are worried about climate change, and ski resorts everywhere are trying to deal with that,” he says. “It goes to show you never know from one year to the next.”