Second homes half of Eagle County
Survey results released last week show that 49 percent of homes in Eagle County are not lived in full time by those who own them – a phenomenon called second-home ownership.
That statistic, as well as dozens of others found in the 2003 Mountain Resort Homeowners Survey, should not surprise anybody who has spent time in Eagle County during recent years. Still, the survey provides a sharper, more detailed focus on a sector that now rivals tourism as the primary driver of the economy in Eagle County and the three other mountain counties in the study. More than 65,000 property records were studied in drawing up the survey.
Complexities of the relationship between local residents and vacation-home owners, groups with sometimes complementary but at other times competing needs, is defined in the report. For example, locals and second-home owners in Eagle County assign almost identical importance to parks and trail systems, but locals rate local schools and health care as more important while non-residents place more emphasis on arts and culture.
In demographics, however, residents and second-home owners differ more broadly. Locals in the four-county area tend to be younger (25-54) and less affluent ($15,000 to $100,000 annual income) while second-home owners are older (55-plus) and more affluent ($100,000 to $1 million-plus). Educational attainment is high for both groups, but 50 percent of second-home owners have graduate or professional degrees compared to 25 percent for locals.
But the study’s greater value may be to help define the future. Baby boomers, now aged 39 to 57, are expected to fuel continued growth in the second-home market as they near retirement. Currently, the greatest percentage of second-home owners is in an older age cohort, 54-65 – the age bracket that baby boomers are now entering.
Of special significance is Colorado’s Front Range. Since the founding of Vail, the Front Range has been the leading origin for second-home owners. It also is the home base for the largest number of second-home owners in Summit and Grand counties.
The Front Range has a larger percentage of baby boomers than the national average, and as those boomers near retirement, more are expected to purchase vacation homes.
Existing second homes are also expected to get more use. In Eagle County, 45 percent of second-home owners said they intend to increase their use, 17 percent said they plan to renovate and 17 percent said they intended to retire to their second homes. This could help compound the county’s tiny (3 percent at the 2000 census) but growing population of senior citizens.
Pros and cons
Even for those who feed off the real estate economy, this is a double-edged sword. Linda Venturoni, director of special projects for the Northwest Colorado Council of Governments, which conducted the study, points out that the greatest single effect of second-home development is the elevation of property prices. Home costs are the single most important reason for the high cost of living in the mountain resorts, she says.
As such, she explains, burgeoning second-home development could crowd out housing for local employees, creating a variety of economic and environmental problems.
The issue is found even in Minturn, a town of relatively few second homes. Still, says Alan Lanning, the town manager, property values rose 488 percent during the 1990s, the greatest increase of any town in Eagle County.
Those rising property values are a result of the second-home-driven economy elsewhere in the Eagle Valley. But the consequence for Minturn, he says, is steadily diminished activity.
“As time goes by, there are fewer and fewer lights on,” Lanning said.
Another aspect of this same issue is commuting. Several years ago, state planners projected that 40,000 people daily would be commuting into the mountain resort communities from Winter Park to Aspen by the year 2020, with the greatest influx being into Eagle County. Because of Sept. 11 and the stock market slowdown, those alarming figures are being revised downward, but planners still warn of a substantial commuter phenomenon in coming years.
But developers argue the more benign aspects of second-home ownership. Paul Stanshick, now with Centex Homes but formerly with Intrawest, argues second-home owners provide a steadying influence on local economies, putting money into local economies with few impacts. He argues that ski towns would benefit much more from second-home development than from day skiers.
Stanshick also predicts that the baby boomer second-home market will be delayed by the stock market fizzle of the last several years. Conventional wisdom had held that the baby boom would fuel a second-home extravaganza through the year 2012. Now, as baby boomers work longer to recover their eviscerated 401K plans, they will also delay their spending for vacation homes.
Last week’s survey confirms what most probably suspected, but it may have several surprises. For example, from the following list, pick the primary reasons for purchase of second homes: scenery, intent to retire, proximity to airport, recreational amenities, investment potential, proximity to ski resort or air/water quality.
Now, guess which was the most frequent recreational activity for second-home owners – and which one for residents: golf, downhill skiing, hiking, walking/ jogging or mountain biking.
The answer to the first question is recreational amenities, followed closely by proximity to ski resort, both far more important than investment potential or air and water quality. Airport proximity was relatively unimportant.
And which recreational activities were favored? For non-residents in Eagle County, downhill skiing is tops, followed by walking/jogging and then hiking. For residents, hiking leads the list followed by walking/jogging, and then downhill skiing. Mountain biking and golf are both further down the list.
Surprising to some may be that Eagle County has a lower percentage of second homes than the other three counties in the study. Summit County is highest, at 67 percent, followed by Grand County at 63 percent, then Pitkin at 55 percent. However, Eagle and Pitkin counties tend to have more expensive homes.
Grand County only recently entered the realm of $1million-plus homes, but had a thriving second-home market a century ago clustered along the banks of Grand Lake, when mining still dominated Aspen, Red Cliff, and Breckenridge.
Somewhat perplexing is how people rate environmental quality. Like locals – but to a slightly higher degree – non-residents rate air quality as well as water quality and quantity as even more important than scenery. And all three, in Eagle County, are ranked even more important than recreational opportunities.
Could that really be true? Maybe. Venturoni points out, however, that people don’t buy their second homes because of air and water quality. She suspects that people sometimes rate environmental quality high because they think it’s the responsible thing to do.
Just as Vail is more like Aspen than either one sometimes cares to admit, so are Eagle and Pitkin counties mirrors of one another in this survey – however, there were also differences.
For example, Pitkin County residents and non-residents rate arts and culture significantly higher than do their Eagle County counterparts. That stands to reason, as Aspen very nearly has nightly lectures by Noble laureates. Golf and economic opportunities, in turn, are valued more highly in Eagle County.
While some parts of the U.S. would no doubt be pleased beyond words to have the problems associated with non-resident property ownership of the Eagle Valley, Aspen, and Summit County, even some communities in the region are studying how to keep the second-home market at bay. Chet Gaede, mayor of Leadville, who attended last week’s briefing, says his community has clearly indicated a desire to be a town of families. He hopes to learn what strategies can be used to discourage non-resident property ownership.
Others, including Eagle, don’t shun second-home development, but are cautious. Larry McKinzie, Eagle’s planner, acknowledges that vacation homes elevate property values, but says second homes otherwise provide limited value to a community, while introducing some problems.
“That doesn’t mean we don’t want any, but we aren’t anxious to see a bunch of them in our community,” McKinzie said.