The high-end market sets a benchmark for sales in 2012, vacant land sales are up, and 2013 promises stronger.
BY Sabina Dana Plasse / Photos Tim Brown
Sun Valley Real Estate Roundtable at the Valley Club brought together realtors Lane Monroe of Keller Williams, Eva Turzian of Sotheby’s Sun Valley International Realty, Jed Gray of Sun Valley Associates Real Estate, and Suzanne Williams of Sun Valley Real Estate for an enlightened conversation about the state of real estate in Sun Valley in 2013. In 2012, the high-end real estate market set a benchmark for sales. All the realtors agree that a stronger sales season exists in Sun Valley for 2013. In the last five months, would-be buyers have been looking at real estate significantly more than in the past year, which is a good sign for the 2013 summer season in Sun Valley, especially since there’s a good volume of property.
Where is the Sun Valley market now? What are the conditions as far as demand and inventory?
Monroe: We’re seeing real prices.
Gray: We have had a good increase in sales volume. The inventory has declined dramatically, and as a result of this, we should see increased activity in the mid- to upper-level markets. The recession definitely made the upper-end buyers more considerate. We have to keep the perspective that Sun Valley basically has a limited sales season: July, August, September, and October that are the strongest months for the real estate business.
Turzian: It depends on the segment of the market you are talking about. Real estate has always been supply and demand. Now, the supply is much less than it was a year ago when there was a lot more inventory on the market. It’s good because a lot of inventory needed to be absorbed so the market can stabilize.
Williams: We’ve seen an increase in the number of vacant land sales in the first six months of this year compared to the first six months of last year. If the high-end residential market picks up this summer, then we will be on pace to meet or exceed the sales volume of 2012. Last year, we had $342 million in total sales volume, including every real estate transaction—land, single family, condominium, farm/ranch and commercial. That $342-million figure is the highest total sales volume we’ve had since 2007.
Gray: People are not in a hurry to buy in the upper market. They are taking their time to really understand the inventory.
Williams: The good news for buyers in this market is that many homes are priced so that they can be acquired at below replacement cost. Furthermore, there is a significantly higher number of high-end properties under construction this year, which is helping to re-invigorate the local construction economy.
Monroe: This has been the case for the last two years. We’re starting to see the difference, and things will begin to progress forward.
Turzian: Some sellers believe if they have held on this long, they’ll wait another year or two to see what happens. I would encourage buyers to act now, while there are still some great deals around.
Williams: Some sellers just want to list where they want to list and give it a try. We have not seen a whole lot of desperation in the homeowner’s market.
Monroe: The market is finally catching up back to appraisals again, which is really going to help us. We are getting sales, and there are fewer foreclosures.
Turzian: We’ll always have people with cash in this market. It’s been so great to see the renters at the lower end of the market buy homes. Every segment of the market in Sun Valley has a component of cash buyers.
What trends are you observing that may move it to a new place?
Monroe: I think you have some of the old guard downsizing or their children are coming in, and they’ve decided they don’t want their parents’ properties. They will sell and move on. You will see the old guard leaving and new folks coming in.
Gray: The recession has taken the emotional purchase away. It’s all about dollars and proven value.
Turzian: People are doing their homework. They really want to know everything, and the Internet makes things very transparent because it’s easy to find information online. I think this is great both for our clients and us as agents.
Williams: Vacant land sales are ahead of last year, and in the higher-end market we have had sales over $2 million. We’ve had a very positive first five months in the lower end of the market, and we’re just now moving into the peak sale months for the high-end market, which we expect to be just as robust.
Gray: The lower end of the market that has defiantly turned around. It will be interesting to see if the rise in interest rates will slow this sector down.
What makes the Sun Valley market unique?
Monroe: For the price and what you can get in Sun Valley, our lifestyle cannot compare to anywhere else. We have the best of the winter world where people come and then come back for the summer, and that’s where everyone is really active.
Gray: We are a bargain. If one were to compare out inventory with like-kind properties in other western ski resorts, we will beat the price point. When you combine that with the fact that our recreational facilities are not crowded, Sun Valley is a great buy.
Turzian: I went to the Community Library and watched a program on the Sawtooth National Recreation Area, and how lucky we are to have this in our backyard. You forget about this, and it made me really proud to live where we have an amazing unspoiled place so close. The outdoors are so easy to access from your backdoor.
Williams: Prices are still very competitive compared to other high-end resort communities. One upside of the limited air access to Sun Valley is that it has helped to preserve our small-town charm, but we still have outstanding recreational amenities and a vibrant arts community.
Coming out of the slowdown, how are you and your firm doing business differently? Did it change the local industry?
Monroe: In my thirty-three years of doing real estate, we’ve always kept missing the point of technology. We advanced to Keller Williams, and it’s amazing the difference it has made to have technology. We got rid of mom-and-pop, jumped in, and it has made a difference.
Gray: We’re an independent office. When we changed to operation of our office to be a broker-only business, it gave us the opportunity to be flexible with the changing marketplace. We are the oldest standing real estate office in the Valley, and business has been good. The changes we made were to have to learn the lower end of the market. I don’t think that’s exclusive to us. I think we all have had to learn short sales and bank-owned properties.
Turzian: The Internet has changed the real estate business, and it continues to change the business. It’s exciting. It has really helped me in many ways. I believe in educating my clients. The more they know, the easier it is to make an informed decision about what they want. They will send lengthy emails with lots of very specific questions. Our firm pushes luxury and high-end photography, which I think is very helpful in marketing a property, especially since many people start their search on the Internet.
Williams: In 2012, we recognized the increasing importance of a global real estate reach and chose to affiliate with Christie’s International Real Estate. This allows us to reach potential buyers not only across the country, but also across the world.
Monroe: You have to adjust. We have better prepared buyers. You will see people still balk at a normal price for properties in the $800,000 to a million dollar range because that’s the perception.
Gray: It’s the lower end of the market that has delightfully turned around. It will be interesting to see if the rise of interest rates will slow things down. It’s a big deal to have inventory reduction.
Williams: Since most of our buying happens between July and October, we can be pushed over the edge to a higher sales volume this year. The good news is for buyers who have been looking. They should purchase now because they can acquire homes below replacement costs. I sold a home in Gimlet that was well below the replacement cost, and that is what buyers want. It’s not inexpensive, but you cannot replace for the price.
Gray: If you have the money, you are king. Again, that truism only holds out to a certain level. If there’s no inventory you lose your kingdom because there’s nothing to buy.
Monroe: We need more realistic inventory for the market.
What forces may change things in the Sun Valley market in the future? Is there anything holding it back?
Monroe: The word is out. We just need people to pay attention.
Gray: Air Service! Today we need more visitors to boost our business and the economy. Improved air service is imperative, which is why we started the Realtors for Air program. We are trying to do this as an industry for the local community. Sun Valley is competing with other western resorts that have multiple direct flights into their areas.
Williams: I think Sun Valley will continue to attract those buyers seeking a higher quality of life, particularly as life becomes more difficult, crowded and expensive in major metropolitan areas. Our ski programs, our music and art programs, and our educational opportunities are major draws for those considering the move to a resort community.
Monroe: Buyers are so well educated compared to ten years ago. You have to be on top of it, and you have to be able to get back to those people. The pipeline of information is absolutely essential in this market.
Turzian: Well, my crystal ball lies to me every time, but I think the air service into this area will play a big factor in our market.
Williams: Air access to Sun Valley is a continuing challenge. I’m encouraged by many of the local initiatives to address this issue, especially the efforts of the Fly Sun Valley Alliance and the proposed Sun Valley Air Club private initiative.
What is the status of repeat buyers versus newcomers? Are you seeing more lifestyle buyers with a long-term commitment to the community?
Monroe: When people come here and see the education and the activities for their kids, whether it’s snowboarding, free styling, alpine, or Nordic skiing. It’s unmatched anywhere in the U.S. We’re not bulletproof, but we’re better than most.
Gray: My children moved back to Sun Valley because of a good school system and lifestyle. Also, my clients have told me the reason they buy here rather than another mountain resort is because of the sense of community we have. Blaine County is a great place to live and visit.
Turzian: The sense of community here in the valley is great. I have seen younger families, clients, who have moved here for the lifestyle—that’s exciting to see. They want to raise their kids in a great environment, be healthy themselves, and learn how to skate ski, ski, fish or bike better. They are well educated and smart. I am really passionate about my quality of life here in the valley, so it’s really fun to be able to help others move here for the same lifestyle. It’s one of the reasons I really love this job.
Williams: The market is equally balanced between repeat customers and new buyers. There are many sellers who are downsizing to simplify their lives as they age, but there are an equal number of new and young families moving to the area for the first time.
What is your best advice for a buyer looking at the Sun Valley market today?
Monroe: If you are not involved in social media, you will be left a little behind. It’s all about lead generation for people coming to Sun Valley. We want people to come here. We’re the best bargain for all the luxury homes in the U.S. The value is now.
Gray: With the inventory going down and interest rates going up, this is an excellent time to find that perfect property and make that buy.
Williams: Buy now. With many asking prices below replacement cost, this is an opportunity to buy some exceptional values. This ‘buyer’s market’ may not last long as the well-priced inventory is absorbed.
Turzian: Do your homework and get your ducks in a row because the good deals are going fast.
What are you doing to attract clients?
Monroe: We’re a small community. When people come by car, they drive everywhere. It’s why an open house still works. It also comes down to service.
Gray: Providing great service and carrying great listings. Using today’s media is also important.
Turzian: The Internet is still a huge resource. With the advancement of technology, it’s very important to make a first impression with everything—print, social media, everything.
Williams: My focus has been to provide the highest level of service and professionalism to a loyal network of clients and new referrals.