Tom Ross

08-07-2009

The developers of First Tracks at Wildhorse Meadows set out last week to explore a new real estate product niche they never meant to occupy in the first place.

The first of the formerly deed-restricted, affordable condominiums in First Tracks were placed on the Steamboat Springs Multiple Listing Service last week at market rates.

The modest condos are in the midst of a planned luxury community, and Brent Pearson, principal and chief financial officer of Resort Ventures West, said he’s not certain what to expect. At prices ranging from $179,000 for the least expensive studio unit up to $470,000 for the two-bedroom units with the best views, Pearson believes full-time residents of Steamboat drawn to living close to Steamboat Ski Area may seek them out. Or, Front Range buyers with a taste for luxury amenities like the hot tub grotto at nearby Trailhead Lodge could perceive them as a one-time value that won’t be seen again.

“We never would have built this product on this land, given what we paid for it,” Pearson said. “That’s what makes this such a great opportunity.

“All up and down the Front Range are people who have been trying” to acquire vacation homes in ski country, Pearson added. He’s hopeful the prices as low as $179,000 for a studio and $215,000 for a one-bedroom will bring contracts.

First Tracks homes are in the midst of a development that has condos at nearby Trailhead Lodge under contract for more than $1 million, and in some cases more than $2 million, although only a handful of those units have closed as anticipated this summer. The disparity makes First Tracks prices an anomaly, Pearson said.

Resort Ventures West originally built the 47 condos in the two buildings at First Tracks in order to satisfy the city’s affordable housing ordinance. However, an extensive marketing and education effort that spanned two years failed to generate substantial interest among Steamboat buyers who could qualify for the deed-restricted homes based on their household incomes.

Open season
In allowing developers to put 38 of the 47 units on the open market, Steamboat Springs City Council members acknowledged that the First Tracks condos did not reach their intended target and that in the midst of the lending crisis, financial institutions are leery of making loans on affordable units with capped appreciation.

Earlier this summer, city officials approved a request from RVW to amend its community housing plan for Wildhorse Meadows, replacing deed-restricted units with a payment in lieu for some units, combined with a voluntary 0.5 percent real estate transfer tax on initial sales.

Nine prospective  buyers under the affordable program remain interested, RVW Director of Sales and Marketing Kerry Shea said.
The exterior finishes on the two First Tracks buildings exceed what one would expect on a project intended for affordable housing.
“The product here had to work in a luxury community,” Pearson said.

Development partner Wintergreen Homes incorporated stone wainscoting and timber trusses in the gables, for example.
The interiors are plain, but include some desirable details. The interior walls have a hand-troweled finish, high quality windows are installed and the two-bedroom units have a master bath. Many condos have covered decks.

Shea points out that a buyer acquiring a vacation home could easily upgrade appliances, countertops, bathroom and door hardware, for example.

Prices and pluses
All of the units are made more livable by the presence of locked storage units in the basement of the buildings. They are ample for storing bicycles and kayaks.

The intent was to give the residents an alternative to stacking their outdoor toys on their decks, Pearson said. And part of that motivation was to keep up appearances for the high-end buyers next door.

Although there is very little variance among the seven studios, seven one-bedroom and 24 two-bedroom units, there is a substantial range of prices within each category.

The variety of prices can be attributed to the quality of the view, Pearson said. Some units look out on the white whale that is the public Tennis Center at Steamboat Springs, while others have views of Thunderhead or across the South Valley to Blacktail Mountain.

The price range for studios from 545 to 565 square feet is $179,000, $225,000 and $249,000; one-bedrooms from 785 to 805 square feet range between $215,000, $225,000 and $315,000; and two-bedrooms from 1,145 to 1,172 square feet range between $295,000, $310,000, $350,000, $370,000, $385,000, $430,000, $445,000 and $470,000.

A relative handful of the condos were released to the MLS this week and the supply will be managed to match demand, Shea said.
Pearson said that obtaining financing for First Tracks purchases will be difficult in the prevailing lending climate.
“It’s still going to be a struggle from a financing standpoint,” Pearson said. “It’s the world we live in.”

Mortgage backers Fannie Mae and Freddie Mac are reluctant to underwrite resort condominiums until the Federal Housing Administration gives them its blessing, and they want to see 71 percent of a project sold before they take that step, Pearson said.

An enticement to enter the process is the fact that access to the amenities already built in Wildhorse Meadows — a fitness center with exercise machines fitted with cable TV, a hot tub grotto, 25-meter lap pool, a game room and the gondola to the ski base – is included in the association fees of First Tracks buyers.

HOA fees vary from about $320 for studios and $380 for one-bedroom condos to $477 for two-bedroom units. In all cases, $184 of the overall HOA fee is attributable to the amenities.