Buying and selling in Colorado ski towns: a cautionary tale from steamboat values plunge, 4 ways to quickly lose money in ski real estate
There is a condo complex in Steamboat where units have precipitously dropped in value while…
There is a condo complex in Steamboat Springs, CO where units have precipitously dropped in value overnight while owners cannot sell, refinance, rent, or in many cases use the units. The units themselves are fine, but there is one huge problem. What happened in Steamboat? Why is this a cautionary tale for buying in ski towns? What 4 items should you always look for in Colorado ski real estate?
I’ll give you the quick summary. A condo complex near the base of the mountain no longer has parking. There is a dispute with the owner of the parking structure where the complex has a 98 year lease. Essentially the parking structure was condemned by the city for engineering issues and the owner of the property has not repaired. Furthermore based on the article it is questionable as to the maintenance agreement on the parking structure. It does not look like the parking issue could be resolved for years if ever as the current property with the parking structure is set for redevelopment at some point.
Here is what a member of the HOA said: “The units are not rentable or sellable during this period of no parking,” Fresques said. “I had a real estate agent reach out to me about a potential sale, and he wanted a clarification on the parking. It’s a mess that impacts the whole community. It’s the result of the Ski Time Square community trying to do the right thing for its residents.
Furthermore, it is likely not possible to refinance or even occupy the units without any parking. Unfortunately there are few if any available overnight parking anywhere close to the property or within the city limits. Long and short, this is a huge problem for property owners and not unique to Steamboat. Parking is only one of the 4 critical items to watch before buying Colorado ski real estate.
Colorado ski real estate is unique. If you are not careful and/or know what to look for you can quickly lose money and/or usability of the property.
I live full time in the mountains and have for years. I have done hundreds of loans throughout Colorado ski towns from Steamboat to Telluride and everywhere in between along with own real estate in many markets. If you do not live/work in the particular ski town you are interested in, ensure you bring in an expert that does. It is difficult if not impossible to protect yourself without intimate market knowledge.
Each Colorado ski town is so unique. It is very different buying a property in Breckenridge than in a uniform neighborhood in Denver or Castle rock. Specific market expertise is absolutely critical when you are looking to buy a property in the mountains. You do not want to end up with a property you thought you could short term rent and now you cannot or a property you wanted to build a dream home on that doesn’t fit with the regulations. Colorado ski real estate is still a great investment, but the recent issue in Steamboat regarding parking for a condo complex should serve as a cautionary tale that you must do your homework and bring in an expert if needed.
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Written by Glen Weinberg, Owner 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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