Taos Ski Valley sale spurs real estate development
Spike in deals around resort is good news, but some think it’s still too early to tell what kind of long-term impact the purchase by billionaire Louis Bacon will have on the real estate market.
TAOS — The sale of Taos Ski Valley two years ago appears to have sparked a short spike in real estate deals around the resort. But some think it’s still too early to tell what kind of long-term impact the purchase by billionaire Louis Bacon will have on the real estate market.
In December 2013, the Blake family announced it would sell the resort to Bacon, who planned to invest millions for improvements. The sale of one of the last major family-owned ski areas generated considerable media buzz, including a
Wall Street Journal article published four months after the announcement.
That article, focused primarily on real estate, trumpeted what some had called the “Bacon bounce.”
“Property sales at Taos Ski Valley, a rugged resort with European flair in the mountains of New Mexico, have multiplied since December, when New York hedge fund founder Louis Bacon said he was buying the ski area from a family that has owned it for decades,” the story read.
Now, two years later, data suggest there was a surge in sales that actually began in the months before the Blakes made their announcement. Numbers also show this initial “bounce” may have already peaked.
An analysis by Peter Lora, of Lora Co. Real Estate, shows there were almost three times as many sales of homes, condos and land in and around Taos Ski Valley in 2014 when compared to 2012.
Just in terms of dollars, combined sale prices in 2014 were $10.4 million, a huge increase over the 2012 total of $3.2 million.
It’s worth noting that the market was showing signs of life in the months before the sale to Bacon was made public. Data show there were almost as many transactions in 2013 as in 2014, and all but two were under contract before the Blakes announced they were selling.
Still, there’s a sense among area real estate agents that the sale of the resort and the promise of real development had an impact. One condo, for instance, had gone into foreclosure and had been on the market for almost five years. It went under contract two days after news of the sale broke. The deal closed two weeks later.
Condo sales saw an especially sharp increase right after Bacon entered the picture.
In 2012, there were nine condo sales worth $1.7 million. In 2014, there were 20 condo sales worth $6.3 million.
“I sold every unit I had listed,” said Kent Forte, an associate broker with Taos Ski Valley Realty who specializes in the sale of condo units at the Edelweiss Lodge.
For years, Forte said the Taos Ski Valley market was relatively stagnant. There were a lot of properties for sale, he said, which was pushing prices down as much as 15 percent since the pre-recession peak.
Then the resort sale was announced. Bacon was promising to follow through on new lifts and a face-lift to the base area. Forte says there was more interest from buyers — especially those looking for an investment, not just a vacation home.
“Right now is the speculative time,” Forte said. A lot of buyers will pick up a property, use it as a vacation rental to cover the costs and hope to sell it in a few years at a tidy profit.
Evan Blish, a qualifying broker with Piñon Investments of Taos, said that some of those who bought right after the resort sold moved fast in the hopes of snatching up a deal. “They’re feeling some urgency to get in with the feeling that prices are going to go up,” Blish said.
The result, many say, is now a paucity of listings around the resort, even if there are still people who are in the market for something.
“There’s definitely a shortage,” Blish said. “There are buyers out there. There’s just a lack of quality products.”
The limited options could be one reason why the so-called “bounce” appears to be on the downswing. In 2015, total sales dollar volume fell 19 percent compared to the previous year.
But Blish said the immediate fanfare surrounding the Bacon sale and the sudden flurry of real estate activity was “overhyped” and “overexaggerated.” The more meaningful impact and more substantive changes to the market will probably be seen in the years to come, he said.
Part of the reason for low inventory, some think, is because owners who aren’t desperate to sell are waiting for projects that are underway to be finished, primarily a base area renovation that includes the construction of the resort’s centerpiece hotel.
“There are some sellers who are hold- ing on to things because they think prices are going to be better down the road,” Blish said.
Among those sellers biding their time may be the resort itself.
Specifically, the resort took several lots in its Pioneers Glade subdivision off the market shortly after the Bacon sale was made public. In fact, a week after the Blakes announced the sale, the resort bought back a lot from a Texas doctor to whom it had sold the property two years earlier.
Under the Blakes, the resort was selling lots in the “private mountain paradise” as a way to fund improvements, like new ski lifts, that it simply didn’t have cash for. With a deep-pocketed owner like Bacon, there’s no rush to sell Pioneers Glade lots, which are generally considered some of the most desirable ski-in/ski-out properties at the resort.
“I think that the real estate people that Louis employs said to take them off the market and see what real estate prices are going to do,” said Chris Stagg, vice president of Taos Ski Valley Inc. “The new company is more involved in doing real estate development than Mickey Blake was, and they might actually build on — rather than sell — the lots.”
In fact, according to a 2015 economic analysis, the resort plans to spend $239 million on real estate improvements through 2024, including the hotel, condos and townhomes. The analysis said the resort also expects other investors to spend another $45 million.
Some think the true impact won’t be quantifiable until after construction is done and there is a finished product with which to woo buyers.
“Right now, it’s not all that lovely up here,” Stagg said. “But when the hotel comes online and people can see it, go into it and be a part of it, that will help. Then we’ll start to see whether people are willing to pay more to be up here.”
When those projects start to take shape and actually go on the market, there’s a sense that buyer interest will again be piqued and sellers of existing properties will get back in the game.