By Ulrich,

Isn’t it interesting how some towns seem to take on the personality of their founding fathers? Steamboat Springs is just such a place. Within 5 years of the Crawford family settling here they were joined by other hardy families who settled the Yampa Valley and set the tone of its character for decades to come.

The Ranching way of life brings certain traits that are unique to its lifestyle. Resilience, Independence, Toughness, Simplicity, Innovation; Ranchers must adapt to a variety of challenges such as weather, equipment, crop conditions, diseases, and market conditions. It is easy to place a parallel on farming and the ski industry; after all aren’t ski areas simply snow ranchers?

Just as the Ranchers had to face a myriad of challenges so did Steamboat as a community. Many of these challenges were championed by innovation and our independent spirit. Being so isolated we had to figure out how to facilitate an easier way to attract our tourists, hence the Yampa Valley Regional Airport. We were the community that invented the airline subsidy program as well as kids ski free.

The Steamboat Economy has reinvented itself on several occasions from agriculture to coal mining to health (the hot springs were a huge draw from the handicapped to the rich and famous from 1909, when passenger trains arrive, to 1939 when the famous cabin hotel burned down), various incantations of tourism and even construction.

Even during our most successful economic days we have remained grounded and enjoy living this simple uncomplicated life. Talk to some locals and see how many leave their homes unlocked and the keys in their cars. As you stroll up and down Lincoln Avenue notice the lack of suits and ties. There used to be a saying that only out of town salesmen and out of town attorneys wore suits and ties and we had no use for either. How many other places in the world can a CEO of a major corporation and a cab driver enjoy each other’s company as without pretences?  

Of course the most important traits that are so attractive and inviting are those of collaboration and welcoming. The early settlers knew all too well that the only way to survive was to help your neighbor, because sure as shootin you would someday need their help. The new families were welcomed and celebrated and assisted to insure their success. These traits are still present and what separates Routt County from so many other places.

It is incumbent upon us who have wondered into this special place and embraced its heritage to foster and maintain this personality for future generations to benefit from.

Q.  Hi Susana- we are looking for a condo in Steamboat. Do you have information on the average nightly/weekly/monthly rental rate for a unit as described above? If not, can you direct me to a good source for this information? This will help us evaluate the opportunity. Thanks.

A. Great question. Unfortunately, there is no single place to go to, to get that information, except on a condo by condo basis.  Here’s why:

• Every development has its own rates, and this largely depends on the condo’s location (how close it is to the base of the ski area, for example, or downtown) and amenities (whether it has a pool, shuttle service to the ski mountain or downtown, hot tubs, tennis courts, etc.).
• Then even within a development there will be different rates depending on the season and even the night. The highest rates are typically the week between Christmas and New Years, during the ski season in general with peaks during President’s holiday and school spring breaks, etc. The shoulder seasons of spring, after the ski area closes, and the fall, before the ski area opens, command lower rates.
• It is fairly easy to get a general idea of what the annual rental figures will be, by asking for rental history figures from the past, for any of the condos on the market. I can help you get these figures. They often are in the form of an Income and Expense sheet given to the owners by the management company.
• Another thing that affects the bottom line is how much the owners have used the condo (and thus had it unavailable for rental), as well as when the owners used it (personally using it during the highest-income holiday week, for example, will have a greater impact on your annual income than using it during the off season). Which is not to say that you shouldn’t use it during that week – after all, one of the pleasures of having your own vacation condo is being able to use it when you want to – but just that sometimes the owner’s use is, and other times isn’t, included in the income and expense reports which we have access to.

Nevertheless, I can certainly help you analyze the figures and the properties. 

A couple of other things to keep in mind are:

• Regardless of the rate or the condominium development, one thing you can count on is that in Steamboat, to be conservative, it is typical to figure that 50% of the rate will stay with the management company and the other 50% will go to you.
• Your Home Owner’s Association (HOA) fees are independant of your management fees, and these can vary greatly between condominium projects.
• If you are interested in getting financing to help with your purchase, it’s important to know that financing for condominiums in developments that allow nightly rentals (even if you’re renting your individual unit or not), is quite limited. In addition to meeting the usual requirements demanded by lenders these days (good credit score and income), you should anticipate needing to bring 25-35% of the purchase price with you to the closing table, and borrowing the rest.

Hope this helps!

We are quite fortunate in the Yampa Valley to have not experienced the volume of short sales and foreclosures that so many have experienced across the nation. Total short sales and foreclosures constitute less than 2% of our market. The name short sale is definitely an oxymoron since nothing about the process is short.  

 

Land Title Company has just released the February sales numbers and found that total sales volume for the month of February 2010 is 267% over the volume from February 2009. Year to date volume is up 228% compared to the same period in 2009. Units Sold are up 165% from February 2010 compared to February 2009.

  While Volume and Units are up over last year, the number of loans recorded is down. Year to date in 2010 there have been 283 loans compared to 487 through the same period in 2009, once again proving that cash is king.   

This points out that there are still significant issues with current lending. The problem started when, as a knee jerk reaction, Congress bailed out financial institutions toward the end of 2008 with billions of dollars (the taxpayers) of interest free money. The hope was to inject this money into the economy via a variety of loans. Because there were no regulations in place as to how the bail out money was to be spent, the financial institutions simply took the money and deposited them into government backed bonds paying 3% interest.

  

Although many of these institutions have paid back some or most of the funds we, the consumer, are still feeling the effects of the unavailable money. In the Steamboat Springs Condominium market we are seeing a real catch 22. This is a product that, in our market, is the only housing available for first time homebuyer’s who are trying to take advantage of the tax credit. However, since they cannot get financing they also cannot take advantage of the tax credit.

  As with most of life, the good news is balanced by reality and as my Mother always used to say “This too shall pass�.

What would happen to Steamboat if there wasn’t a little controversy every now and then? As you can imagine a housing development of 487 acres that will, over the next 20 to 30 years provide an additional 2,500 housing units of varied types is likely to stir some debate.   

This master-planned project based on “New Urbanism” will integrate apartments, condos, townhomes and single family homes into a community setting that will also offer an area of commercial including a grocery store. No residence is more that a 1/8th mile from the nearest free to rider city bus stop. Included in the project are over 148 acres of parks and open space. Hiking and bike trails throughout the community will link to Silver Spur as well as the Steamboat Core trail via a tunnel under US 40 that will be built by the developer.   

In cooperation with the School district there will eventually be a K-8th grade school built on a nearby exiting site already owned by the school district. A new fire station is also incorporated into the development along with significant highway improvements for that area.   

Steamboat 700 has been endorsed by the City of Steamboat Springs as well as the County Commissioners, School district, Steamboat Pilot and Today, Yampa Valley Medical Center and many local civic leaders.   All ballots for this City wide election are due by March 9th and tabulation has already begun.

We at Buyer’s Resource feel that this project has been well planned and fits within our West Steamboat area plan that was revised in 1998. This project allows for an affordable housing component but more importantly provides our workers with an attainable housing alternative within the Steamboat City limits. The developer has worked diligently to listen to the needs and wants of the community and has obliged with this plan. We endorse this project and hope that you will take the time and effort to fully understand the dynamics and scope of Steamboat 700.  

That is been the Steamboat Springs mantra as we sent 17 young athletes from the winter Sports Club off to Vancouver and the Olympics. The send off was a party as we blocked off Lincoln Avenue and brought in a huge monitor and stage. More than 2,000 people gathered to celebrate and encourage these great representatives. The lighting of our own Olympic torch on the County Building lawn and fireworks off of the roof helped warm the celebration.

 

Highlights of the games for the Steamboat crowd were the Nordic Combined which consists of jumping followed by cross-country skiing.  Two individual events sandwich a team event. In total there are 9 medals awarded to the Nordic Combined events. The United States team made up of primarily Steamboat born and/or raised athletes won 4 of the 9 possible medals.

 

It all started on the 2^nd day of Olympic competition with the normal hill individual. Steamboat native Johnny Spillane took a silver medal with Steamboat Native Todd Lodwick  taking 4^th and long time Steamboat’s winter sports club athlete Bill Demong taking 6^th place. This set up the team event where 4 team members jump then run a relay of 5k each. At the end the Americans with the three skiers above plus Bret Camerota were able to take 2^nd place and walk away with a silver medal. Last of the events  is the large hill individual which saw Bill Demong take the gold followed closely by Johnny Spillane. In the history of the Olympics the United States had never won a medal in only two events, Biathlon and Nordic Combined.  Thanks to the great teammates and friends from Steamboat Springs that 86 year drought has been snapped.

 Now all that is left is to welcome them all home. That, my friends, will be quite another celebration!

This article appeared in a newsletter produced by Joe Birkinbine of ATP Financial Services here in Steamboat. Joe is a financial planner as well as an instructor and trainer for pilots. I thought the article interesting enough to share.  Ulrich  

Price bubbles in technology stocks, crude oil, home prices, credit, and other areas posed far-reaching problems for investors.

For example, the past two recessions were each preceded by (and likely caused by) price bubbles: The recession that began in December 2007 was preceded by a bubble in real estate; the 2001 recession was preceded by a bubble in technology stocks.  Federal Reserve chairman Ben Bernanke told Congress that asset price bubbles and the financial booms that they cause were perhaps “the most difficult problem for monetary policy this decade.�

The hot topic right now seems to be where the next bubble will pop up in our economy. But can ordinary investors protect themselves from bubbles? Is it possible to tell the difference between an asset bubble and a legitimate investment opportunity?  What Is a Bubble?A bubble typically occurs when there is widespread speculation that a particular asset is going to increase in value. The subsequent spike in demand for the asset drives up the price, but when the anticipated gains don’t materialize, some segment of the investing public is left holding an overpriced asset. Losses occur as the market adjusts to represent the true value of the asset. Bubbles can occur in the economy at large, in a particular financial market, or in a particular security or commodity. Generally speaking, most bubbles get started with the belief that the investment is a sure thing and thus anyone who manages to purchase the hot asset is guaranteed a return because the price will always rise. One other common ingredient is the notion that fundamentals don’t matter anymore, which leads people into a things-are-different-this-time mentality.  A Saltwater BubbleHistory is littered with investment bubbles, but the first may have been the South Sea bubble, a stock scam in 18th century England. See if any elements of this story sound familiar. The South Sea Company was granted a monopoly on trading routes with Spanish South America in exchange for assuming England’s war debt. So great was the anticipated value of the trade routes that investors became desperate for South Sea Company stock. The company simply issued shares to meet the demand because there was no law to prevent it from doing so. It soon became quite fashionable to own South Sea shares. Many of England’s rich and powerful were drawn in, which, combined with the company’s lavish offices (built and furnished before any trade voyages were launched), further added to the perception of a sure thing. The share price peaked after appreciating 1,000%. When eventually it became evident that the company was making little profit and its officers had acted fraudulently, the share price plummeted. Thousands of investors were bankrupted, and not only because the stock crashed. In addition to spawning many copycat scams, the scandal caused bank failures and a loss of confidence in stock investing. The British government responded with legislation that later came to be called the “Bubble Act of 1720.�2 

Minus 28 degrees! That’s right, minus 28 this morning. A friend who lives west of town by the river had it at minus 33. What does that mean in Ski Town USA? Pretty much business as usual. School isn’t cancelled until the thermometer hits 40 below. Both of my girls went through the entire school system here in Steamboat and NEVER had a snow day.

The temperature on top of the gondola on Mt. Werner sat at a plus 8 degrees as of 8:00 am this morning. That is a 36 degree difference from town to the mid way point of the Steamboat Ski area. Another way to look at it would be the same difference from the temperature that water freezes to a short wearing, golf playing 68 degrees. How is this possible? It’s called a temperature inversion. Cold air is heavier and sinks down the valley walls while a layer of lighter, warmer air caps the inversion. Most people won’t believe it until they experience this phenomenon.   Alright, enough about the temperature, let’s move on to another number. 118. That is the number of inches of snow that the ski area has received to date. This pretty much puts us on par to reach our average of 350 inches of snowfall for the winter. The winter of 2007-2008 brought us our highest snowfall total of 496 inches. The interesting and forgotten number is that the Ski Area closed a week earlier than normal that year and the week following the end of the ski season we received another 60 to 70 inches which would have increased this amount dramatically. The most snow fall in one month was January 1996 where we saw 216.5 inches of snow fall.Let’s move on to 3.8%. That is the national inflation rate for 2008. 2009 actually saw a .04% decrease in inflation. Unemployment has gone from 5.8% in 2008 to 9.3% in 2009. Again on a national level existing home sales (in the millions) have increased from 4,913 in 2008 to 5,011 in 2009 with the National Association of Realtors predicting another increase in 2010 to 5,694. NAR is also predicting a 3.6% increase in cost of homes for 2010. Within the Steamboat Springs area Multiple Listing Service (MLS) we saw 427 single family home sales in 2007 down to 148 in 2009. Average price of a single family home in 2007 was around $800,000 and in 2009 was $631,000. Of course there are a myriad of reasons why there are these differences. Remember that these are only the single family homes and do not include condos, townhomes, multiplexes or fractional. Still it is always fun to look at these numbers. Numbers are what we do at Buyer’s Resource. We do it because it is fun and interesting but, most important; it’s valuable to understand the market in which we live. Of course we go into much more depth and detail but this blog is longer than anticipated already. Why not just give us a call and let us know what numbers you would like to glean and let us show you how we can put these numbers and our expertise to work for you.