As everyone departs for the holiday season and many are hitting the slopes I wanted to share a survey I did of Colorado real estate experts on the best ski investments. As you can see there were some surprises. What huge changes occurred in Breckenridge and Vail to make them fall on the list? If you are buying real estate what is the best ski town to buy in?
What was in the data on Colorado ski real estate?
I was a bit surprised by this recent survey. The survey was sent to my Colorado list of realtors, investors, real estate pros, etc… (if you want to be included on this list sign up here) with a high concentration in the various mountain communities as we do a lot of lending in all the ski towns.
I’ve put out lists of best ski investments for the last 10 years or so, but this survey changed the rankings a bit of how I would typically put the resorts in order. For example, I would put mountains like Vail or Breckenridge much higher on the list. At the same time Winter Park had been ranked lower on the list. Why the recent movement of the best ski towns in Colorado? What does this mean when you are looking to buy ski real estate?
Why did Vail and Breckenridge fall in this survey?
Breckenridge: Summit County has had an amazing run basically doubling since 2019 so prices went up extremely quickly and got a little ahead of themselves. The market has definitely changed now; gone are the days of 40% appreciation to declines in median home prices. Median home prices have declined about 10% from the peak. Furthermore, Breckenridge introduced strict nightly rental regulations on the number of licenses in certain areas which has made it difficult for many property owners. Although this is not the root cause of the drop on the list, it likely is not helping. There is no doubt that after an unbelievable runup in prices that Breckenridge has cooled. Historically, Breckenridge has a higher correlation to Denver so as Denver cools so does Summit County. It appears these historical trends are holding true in this cycle. Look for more downward pressure on prices the remainder of this year into next.
Vail: In this past election Vail proposed a 17% tax on nightly rental stays. This is a huge jump and higher than most other markets. With a 17% tax, cleaning fees, platform fees from VRBO/Airbnb it would have been very hard to make the numbers work for most investment properties in Vail. Although the initiative didn’t pass, it gave pause to many buyers looking at Vail. Furthermore Vail has gotten a lot of bad press in the past couple seasons on overcrowding as well. As a result, many are looking at more exclusive areas like Beaver Creek that don’t have the same tax issues as Vail or the overcrowding.
Why was Winter Park ranked high on the list?
Winter Park moving up on the list actually surprised me. Traditionally Winter Park has a high correlation to Denver like Breckenridge but it appears that many chose Winter Park due to the affordability. It is one of the more affordable major ski areas which is attracting more diverse buyers. Furthermore, I think the Winter Park Train from Denver also is a bonus as you can eliminate the traffic issues of I 70 that plague many of the other resorts.
Steamboat and Beaver Creek continue to perform well
Both Steamboat and Beaver Creek have a much lower correlation to the Denver metro area and draw buyers from throughout the country. Furthermore, Beaver Creek has a large international buying pool. Having a much larger pool of buyers helps smooth out the ups and downs in the market. I think this trend will continue and that Steamboat and Beaver Creek will outperform other markets due to the broader buying pool.
It is also important to note that historically Steamboat and Beaver Creek (eagle airport) have direct air service from many major markets which increases the desire of these areas as you don’t have to rent a car, sit in 6 hours of traffic on I70 you can fly directly to Steamboat or Beaver Creek and be on the slope shortly thereafter without the hassle.
The top ski real estate in Colorado is Aspen and Telluride
Both Telluride and Aspen have a lot in common. Both are land constrained, building costs are high, there are very few, if any, available lots, and most importantly they are seen as a hedge to inflation. In a high inflation environment, high net worth buyers are scrambling to “protect” their assets. In a typical market as the stock market fell, you could hedge with treasuries or international exposure, but in the current environment everything is falling so hard assets like real estate are one of the few “safe havens”. Furthermore, neither market has a high correlation with another market. For example, what happens in Denver doesn’t have much if any impact on either market as the buyers come from all over the country and world. Both Telluride and Aspen meet these characteristics.
Summary
There aren’t any “bad” ski towns in Colorado. Every Colorado ski town is basically land locked and building costs are high which will limit new inventory coming online. But if I had to rank them in order based on today’s economic environment Telluride and Aspen would tie for the top place followed by Beaver Creek/Steamboat. Note, even the top performing ski towns will come off their highs over the next year or so, but I don’t envision a 2008 rerun. Remember that the high end Colorado ski towns have a direct correlation to the stock market so if there is a major reset in the stock market, look for some pain in ski towns.
Regardless of what happens in the upcoming year, long term the majority of high end ski areas will outperform most other real estate throughout the country so none of these markets would be a bad long-term investment but in the short term, as we are seeing in the data above, some will clearly outperform others.
Additional Reading/Resources
- https://coloradohardmoney.com/big-questions-in-co-this-election-what-town-proposed-17-short-term-rental-tax/
- https://coloradorealtors.com/market-trends/regional-and-statewide-statistics/
- https://coloradohardmoney.com/best-colorado-ski-real-estate/
- https://www.zillow.com/home-values/14934/breckenridge-co/
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Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner. I’m not an armchair reporter/writer. We are an actual private lender, lending our own money. We service our own loans and own commercial and residential real estate throughout the country.
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Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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