Of booms and boomers
VAIL ” If you’re targeting ski-resort guests, it’s not about baby boomers, it’s about rich baby boomers, said Ford Frick, managing director of BBC Research and
The hype about all baby boomers having money to burn is hype and nothing more. Speaking to a gathering of business and real estate professionals discussing ways to drive the summer resort market, Frick pointed out that 1 percent of households account for 35 percent of personal net worth.
“Baby boomers are significantly underfunded for their rapidly approaching retirement,” Frick said. “Some seem to be thinking of it as a vacation. If they think that, they’re deluded.”
“Rich baby boomers will do what they want, regardless of what those beneath them economically do.”
To drive their markets ” during the summer or any other time ” resorts should be working that 1 percent and those in that neighborhood, Frick said.
Those buying in resort areas are not necessarily buying in the resorts.
The resort real estate market has shifted from traditional ski towns with traditional ski lodges, condominiums and single-family homes and surrounding ranches, Frick said. It’s now condo/hotels, boutique hotels, fractional ownership and downvalley trophy ranches with small plots of horse property.
“Look at any ski resort area and downvalley or the next valley over is where it’s happening,” Frick said. “Those areas are no longer satellite to the core resorts. Places like Hotchkiss, Paonia and Cedaredge are attracting fairly well-to-do people seeking a certain lifestyle.”
He praised Vail for the town’s massive upgrades, but said it’s not unique to Vail. Most ski resorts in the western U.S. are less than 50 years old and almost all of them are in the middle of major urban renewal projects.
“Everyone’s taking a shot at this. It will be interesting to see how they do,” Frick said.
A new resort in Grand County seems to have the right perspective. Multiple amenities are bundled, privatized and packaged with real estate alternatives.
“People are asked ‘Do you like golf? Fishing? Skiing? Ranching? What do you want?’ Then the real estate is packaged to go with it,” Frick said.
Skiing has gone from an adventure to entertainment, with amenities targeted at almost any demographic imaginable, and from rough-and-tumble villages to quality-of-life communities.
As resort areas continue to grow, they’re faced with something of an identity crisis that asks what they need to be if they want to define themselves as a community.
“Is it a sense of place? A sense of common experience? Or have we moved away from that?” Frick asked.
Edwards, for example, may or may not be a community, but Frick said it is an “interesting phenomena.”
“It’s a result of market forces where there was room for those results to land,” Frick said.
Aspen has different problems.
“Walk down the street in Aspen and you can feel the ghost of John Denver right there beside you like it was still 1978,” Frick said. “You walk down that street and you realize that something is very wrong there.”
The issues for all resorts have not changed significantly.
“We face the struggle of community pressures versus market responsiveness, economic and social divisions, affordable housing and privatization versus community access to amenities,” Frick said.
We’re not growing out of control, Frick said, pointing out that 85-90 percent of the housing stock does not change from year to year. An average of 10 percent of a resort area’s housing stock sells and 2 percent is new. Remodeling is now a larger market segment than new construction.
“Off season feels busy, but it’s not,” he said. “There’s lots of construction activity and energy, lots of traffic and people moving around, but the retail statistics indicate that business is still dead during the off season.”
Short memories are always a danger and some people in the real estate and building industry have forgotten about the market crash between 1984 and 1989. Properties lost about 50 percent of their value.
“We’ve lost that from our collective memory,” said Frick.
Breckenridge Mayor Ernie Blake is proud of the direction his community is taking in response to the market forces all resort communities are dealing with.
Breckenridge is not much different from any other ski town, at least not in the issues it faces. Real estate prices are up 22 percent in the last four years. At the same time, town revenues are up 25 percent, Blake said.
Breckenridge is taking dead aim at its two more pressing issues: child care and attainable housing. Breckenridge is creating 150 new child care slots for local residents.
The town was prepared to pull the trigger on a tax to create and maintain attainable housing. Breckenridge residents decided instead to join a similar countywide effort in Summit County.
“We decided to forego the town’s tax to be part of the countywide tax, and we will work to make sure it passes.”
Breckenridge has 460 units right now and Blake vowed they will get more.
“I’m proud of Breckenridge and its responsible approach to real estate and construction management,” Blake said.
In honor of Breckenridge’s accomplishments, Sept. 29 was declared Mayor Ernie Blake Day by Colorado Gov. Bill Owens.
Randy Wyrick can be reached at 970-748-2977 or firstname.lastname@example.org.
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