A local HVAC contractor said of the new code “This is like a really obese…
Will the “snow thief” affect your winter plans and profitability!
As we all know the ski industry is highly cyclical in nature with the largest driver of profitably for the ski industry is you guessed it, the secret ingredient, snow! Long range predictions came out for Colorado and the “snow thief” will be lurking in certain areas. Which areas will get “robbed” of snow and which will benefit? How will this impact ski profitability and your profitability if you are a real estate owner in a ski town?
Ironically one of the largest influences on ski profitability originates in the Pacific Ocean. The surface temperature is the largest drive of which resorts prosper with abundant snow and which get their winter robbed by the “snow thief”. The upcoming season is shaping up to be quite interesting regarding snow predictions.
Why does this matter?
Suppose you own a rental condo or house in a certain area that is going to receive less snow, you might also receive less rental revenue if the big storms miss your particular resort driving traffic to other resorts. This is true for most businesses dependent on snow in the Colorado mountains.
How does this impact Colorado’s snow weather?
La Niña occurs when there is cool water in the central and east-central Pacific near the equator which results in average to above-average snowfall for Steamboat and less moisture at resorts to the south.
By contrast, El Niño is the result of warmer ocean water, typically resulting in lower moisture levels for Northern Resorts and more abundant snow for southern resorts.
What is the prediction?
According to the long-range forecasts from the National Weather Service “La Nina” has a greater than 60% probability of forming for the upcoming ski season. This will impact weather through the western mountain states. In a nutshell northern resorts like Steamboat and Winter Park typically get considerably more snow while southern resorts like Crested Butte, Durango, Telluride typically get less snow. Resorts like Aspen, Copper, and Vail should be around average to slightly above average.
For example, in Steamboat the average snowfall for steamboat is 334 inches, in strong la nina years the snowfall was > 20% above average. In 07/08, a la nina year steamboat received 489 inches of snow. Quite the opposite effect for la nina years in telluride where La nina is classified as the “snow thief” (see Telluride Daily) causing well below average snowfall: “snowfall during the regular ski season was spotty, and several storms seemed to simply pass Telluride by”
What should you do?
If you are a powder hound look to the I70 resorts and northward. If you are a business owner dependent on the ski industry or own rental property in the resort areas you should plan accordingly. Early season snow will likely be lighter in the southern resorts and heavier up north.
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 the Colorado Real Estate Journal, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
Fairview is the recognized leader in Colorado Hard Money and Colorado private lending focusing on residential investment properties and commercial properties both in Denver and throughout the state. We are the Colorado experts having closed thousands of loans throughout the state.
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