The Western Resort Alliance 2nd Qtr. sales results have been published . The WRA compares real estate sales numbers for Mountain Resort area’s throughout the west .

McCall remains the most affordable destination on the list , and is a very compelling value proposition at an average residential price of  $227,00. Although McCall’s location and demographics define it’s size ,  and smaller concentration of amenities as other destinations , the fundamentals remain strong comparatively ( Lake , Ski , Public land , quality of experience ).

Western Resort 2nd QTR Comparisons

Work has begun on the next phase of the Legacy Park Improvement Project . This will be a big boost for surrounding business’s and continue to make the central business district surrounding the area realize the potential for such a unique setting. Sidewalks , landscaping , and paving will make this a more pedestrian friendly area .  The summer Weds./Sat. market has drawn large crowds , and the improvements will make it easier to navigate to and from for all enjoying the market , other events , and the park.  This infrastructure improvement hopefully will incent further investment .

Here’s a link to a sketch showing the improvements

Legacy Park Phase II Improvement 

As the absorption of upper end homes has reduced the available inventory in and around McCall,  those looking for custom home quality are turning to building lot purchases for future construction.  We thought this article was very informative and good research for those seeking to build their dream home.

Building modern in the mountains

As we heard the news this week of the Utah group Pelorus submitting a offer for Tamarack, some sounds real good and some sounds not so good. To be successful going forward at Tamarack is going to take a long term approach, efficient operations  and most important,  a buyer with credibility to bring back confidence and buyers that are users of the property.

We only hope that what’s happened since the bankruptcy is not another speculative bubble driven by investors and discounters and that some of those buyers can afford to hold the properties should the values return.  Stability is key.

Cross Harbor Capital is an example of  a creditable buyer.   With their purchase of the Yellowstone Club, confidence and buyers have returned.

Here’s an article and clip from the 2009 Western Development Conference on Real Estate trends in the west, interviewing the Cross Harbor Principle Sam Byrne.  

Western Real Estate Trends and Cross Harbors Sam Byrne

Here’s the link to the article about Tamarack offer from the Palorus Group

Tamarack offer

Outside Magazines 2010 August issue ranked Boise Number ” 1 ” as ” Best overall town in the west ”. …….As all best of articles do, this took in to account a number of attributes Boise excels in.   This underlines the strong fundamentals we see in the long term future of McCall  as Boise is the major market driver for McCall real estate with approx 60% of second home owners residing in the Boise area.   Combine this with our relative affordability compared to other like resort towns,  the demographics of the Boomers just hitting retirement age, and national migration patterns, particularly on the west coast,  as people move from the coast to the intermountain areas.  

Here’s a link to the article

Outside Magazine Best Towns in the West

Sales of single family homes and condominiums picked up considerably during the second quarter of 2010 but while the number of closings increased by nearly 33% compared to second quarter 2009, the median price decreased to $195,000 from $230,000.

In the second quarter, buyer interest has remained keen on distressed properties – short sales and REO (bank owned) properties, primarily under $300,000; and on those non distressed properties priced to sell to compete in this very price sensitive, buyer’s market.    The home buyer’s tax credit which expired April 30 drove a more motivated group of buyers into this market through April, but in May and June buying activity decreased significantly.  Two factors:  the buyer pool shrank having had purchased previously; bad weather, even for McCall delayed travel here to look at available inventory. 

WHAT HAPPENS NEXT,  as we progress into a more traditional selling season:  the weather is good, buyers are waking up and looking at property, even at the high end, and interest rates are lower than we have ever seen them.  A local  McCall bank was quoting 4.4% on the 30 year fixed, conventional rate mortgage loan with a half a point; and the jumbo rates on loans over $414,000 are showing only a very modest differential at 4.7% on a 30 year fixed rate loan with a point.  Those rates should make things happen, even at the affluent end of the market, why pay cash when rates are this low?

Buyer mentality remains firm on pricing but those well located, well designed and well maintained scarce properties that are well priced are being shown and the astute buyers  - at any end of the market -  especially those who have been looking for just the right property, are negotiating and exercising reasonable flexibility.

It is difficult to imagine better buying conditions in this McCall real estate market and we are recommending to our buyers to negotiate with common sense so as not to miss a good buying opportunity.   Stalemates have become too commonplace in this market – we are seeing buyers missing out by not exercising flexibility when they find the right property.   

McCall Residential 2ndQuarter2010 Report

Land and Lots Market Report Second Quarter 2010

The second Quarer of 2010 saw a  large 720 % increase in sold lots over the same period last year  as developers of  distressed subdivisions have discounted significantly to attract builders acquiring multiple properties to land bank for current and future construction.  New construction build to suit under $275,000 including the lot has drawn alot of interest as quality re-sales in this price range are becoming difficult to identify, and buyers become increasingly frustrated with the short sale and REO process for marginal properties.   

Inventory remains high with 423 properties for sale in and around McCall, but the fundamentals remain that in-town scarce view, lakefront or public access properties continue to hold their value .  

LandandLots2ndQtr2010

The WMRA ( Western Mountain Resort Association) 2009 year end real estate sales statistics have been published.  The report compares Mountain resort towns  in the Rocky Mountain states, including McCall.   The statistics are a a bit broad as they include  locations surrrounding the specific resort town also, but reveal that McCall again remains a very compelling value.  Below are year end average sales prices for 2009 in each market reporting.

Teton (Jackson Hole)      $ 1,267,000

Vail                                              1,018,000

Telluride                                       982,000  

Park City                                      779,000

Big Sky                                           711,000

Whistler                                        671,000

Sun Valley                                   654,000

Tahoe Sierra                               613,000

Steamboat                                   567,000

Summit County                         375,000  (Breckenridge,  Keystone,  Copper)

Crested Butte                             367,000

Grand County                            316,000   (Winter Park)

McCall                                       226,000

Pending sales in the McCall market continue to be way ahead of last year, but there are still questions to be answered to see if the increased activity has any legs.  Two trains of thought, one is that the first time home buyer tax credit is the main driver in the bump (local primary occupant’s), and its expiration, the soft  job picture,  and overall economics will slow the surge, and  that we are in a ” mini-bubble “ on our way to a ” double dip “.

Even though we are seeing inventory levels being reduced thru sales absorbtion , there still remains alot of ” shadow inventory “ ( distressed properties still being held by lenders waiting to come onto market ).  

 Others believe in a long term turnaround saying consumer psychology has become more optimistic with the stock market increases, lots of consumers holding cash ,  low cost of borrowing , and historically low home prices . The longer term picture is supported by a belief that home prices are at or near the bottom , and they will stay there ” flat ”  for the next few years , so as scarce inventory presents itself there’s not alot more ” downside ” price pressure left , and now is a good time to purchase . You could also argue that it may be likely a more tax friendly political environment may be present in the next political cycle.

Having said that , keep in mind that 60% plus of McCall  homes are second homes , or investment homes used as vacation rentals , so motives , timing and discretionary decision making  are factors driving buyers .

This is our first commercial market report, so we thought it might be helpful to begin by summarizing the fundamentals of the McCall commercial market environment and the constant attributes that will always be present in either a up or down cycle for any buyer or seller that is interested in the sector.

 McCall is a “resort” town dependent on an influx of  visitors and  second home owners from surrounding areas and regionally during prime season and holidays.  We can break the year down like this,  give or take a few days… .

There are approximate. 42 “Prime” holidays where maximum revenue potential is possible  – Thanksgiving, Christmas, New Years, Memorial Day and July 4th , Spring Break, Presidents Week, Labor Day.  

There are approximately 120 “Peak” days where recreation is at its best - July, August , January, February-  and weekend crowds are consistent.

That leaves the tough part that most businesses need to overcome and plan for - “Shoulder Season “ amounting to approx. 200 plus days or approx. 55% of the year when there is very few people in town.  September, October, November, part of December, March, April, May.   This can vary depending on when the Skiing starts and how early the summer begins.

Thus,  most service/lodging/recreation businesses should have a very low cost basis of operation on fixed expenses to survive during shoulder season.  Since the contraction in the real estate market , and the distress at Tamarack , non-service commercial (Light Manufacturing/Distribution Building Trades/Office Professional) that support that sector have been hard hit also.

This has presented some real opportunities for unique and scarce commercially zoned vacant land and properties that have historically never been available.    The challenge is what kind of business will support the purchase while a drawn out recovery takes place, and how long before some inventory absorption takes place and appreciation begins on the real estate.

McCall Commercial Report

McCall Commercial Report March 2010

Residential and Land

The story line for the first 3 months of 2010 is the obvious continued spike in sales activity of properties under $300,000.  Of the 35 residential sales for the first quarter,  17 were either “bank/seller short sales” or REO (Bank owned Real Estate) for 48% of the sales.

Year over year:  First quarter closings amounted to 35 closings,  up 29% in the first quarter of 2010 compared to 27 closings in the first quarter of 2009.  

Of the 35 sales in the first quarter, 24 sales or 68% closed under $300,000.    March showed increased activity in properties over $400,000 with 6 properties closed compared to Janurary and February when 20 of the 24 properties closed under $400,000.

Lower prices on quality building lots are beginning to attract more interest as the supply of  desirable existing built product is very scarce – especially in the mid to upper end of the market in the range of $500,000 to $1,500,000.    The combination of  softer  prices for building lots,  building materials and labor is making a custom build a more competitive value proposition relative to values of distressed properties.

Another statistic that stands out is the high number (also 35) of pending (sold but not closed) properties as of March 31, 2010.    In recent months, pending sales totals have been consistently numbered between 12-15.    As of March 31, 20 of the 35 pendings are listed under $200,000.

The market has increasingly absorbed existing inventory as listed single family residence’s total 129 and 63 condo/townhomes for a toal of 192 properties currently for sale.   Of the 192 properties for sale, 98, or 51% are listed under $400,000.   There are currently 32 “short sale”  and  8  REO ( Bank owned)  properties for sale for a total of 40 distressed properties or 20% of the total available inventory.

McCall Residential 1stQuarter2010 Report

LandandLots1stQtr2010