Random thoughts - buying, selling and values
It's been an interesting summer for us real estate wise.
We're not re investor types, but for many years we've known that we plan to retire in a ski resort town(emphasis on town -- real town, just with the benefit of having a great ski resort along with wonderful summer activities). But we're not novices either. Over the years we've owned a few properties there, first a condo which we rented out when we weren't using. Later we sold the condo and bought a single family house with an accessory dwelling unit ( they call it a caretaker, but really just an adu our house isn't the type that would justify calling it a caretaker. We've had a great tenant there for the last 5 years and our daughter and her husband live in the main house full time and we visit frequently. Back in 2005 we bought an investment condo in a new development, but sold a year later -- for an $80,000 profit after considering closing costs. We also own an 1/8 share ffractional ownership in a condo with the kids in a condotel at the base of the ski area. Something I never thought we would do, but it makes so much sense for us simply for convenience and perks and we consider it more like a luxury than a true investment. Cost was about the same as a new nice car, but will hold it's value better. It breaks even on income and ownership cost sometime making a small profit, but we bought it for the great 52 week a year perks -- even though ownership of the unit itself is fractional we have year round parking in the garage right across the street from the lifts, base area ski storage/valet, owners lounge, great fitness center, pool and hot tubs, plus spa and dining discounts. Value has held it's own considering recent sales.
Can't say what our house would sell for right now, but realtor said if she were to list it today she would list at about 35 percent over our 2004 purchase price (zillow indicates a 42 percent increase, but trust realtor's opinion more) Comps on our street are strong. Either way we consider ourselves pretty lucky given the economy.
While re has been hit hard in this area, the primary weakness has been in
residential lots and condos. Eventually want to build our dream retirement home out there, probably a duplex with the kids. Lot prices are really down. So we started to look at lots to purchase and hold. Found two we really liked. Both had been on the market 3+ years. Thought we had plenty of time to consider. Guess what? Both went under contract within 2 weeks while we were mulling. Neither has closed yet, but i expect the sold pruce to be well below asking and about 70 percent
off original list. That's about the average decline in lots over the past 3 to 4 years. So we lost out there and back to looking next time we are out.
At the same time we were looking at investment condos. Rents are doing nicely there (and DD is a property manager) and cd's aren't doing anything. Ironically the same unit we sold in 2006 just hit the market $20,000 less than we purchased it for in 2005 (and 100,000 less than what we sold it for in 2006. Made a cash offer at 95 percent. Next day 100 percent offer accepted. A week later found possibly better
condo ithat had been on market a while but well priced. Probably about a 4 percent ROI after ownership costs. Within one day while negotiating and getting very close -- another full priced offer came in. Lessons learned, don't dilly dally and just because most properties are selling way below asking, don't play around with property that is well priced to begin with. While we lost out, it is nice to see that reasonably priced properties are starting to move. We've got some good realtor friends in the area and hope to see more smiles at the slopes this winter.