Archive for November, 2011

From the desk of Tim Baker, Executive Director, Beaver Creek Resort Company

What an amazingly beautiful fall this has been!  And now as the leaves ( and snow) begin to fall, we at the BCRC reflect on the year that has past and the year ahead.

BCRC’s Fiscal Year 2011 came to a close on September 30th.  Financially, I am pleased to report that BCRC had a successful year from a financial standpoint.  Our unaudited results reflect an increase in revenue of ~5.4% or approximately $844,000 (on a total budget or $15,535,000). BCRC was extremely successful with the management of expenses resulting in a negligible variance of 0.81% or $104,267 (on a total budget of $15,444,000).  Based on the increase in revenue and flat expenses in FY11, the BCRC reserve balance is forecast to achieve approximately $2,218,000 or 15.3% of the BCRC operating budget (after capital expenditures), an increase in reserves year over year of $1,643,000.  I’m proud to say that BCRC will end its fiscal year with a ZERO operating debt balance.  Final results may vary a bit as our financial books come to a close over t he course of the next few weeks.  Actual financial results for FY11 (in addition to the proposed FY12 budget) will be presented in greater detail to the BCRC membership at the Annual Meeting on Saturday, November  26th at 8:00am at the Park Hyatt in Beaver Creek.

The season and fiscal year ahead look promising as well.  Earlier in the summer, our booking pace for winter was far ahead of the pace for last year.  While it has slowed somewhat in recent weeks, winter guests are still booking ahead for their Beaver Creek winter vacations.  We eagerly await another epic season in our own winter wonderland!

We are still working on a number of improvement projects around the Resort before the snow begins to fly.  As you may have noticed this summer, we are currently updating most of the signage along Village Road and in the Village core.  Phase 1 of this project should be complete later this month.  We have also started work on a significant improvement to Centennnial Station (Dial-A-Ride bus stop).  This is intended to be an on-going project with a continuation in the summer of 2012 to dramatically enhance the arrival experience for Owners and Guests in this location.

In addition to these major improvements, we are quite busy this “off season” preparing for what promises to be another epic winter season here at beautiful Beaver Creek Resort! I look forward to seeing you soon!

All the best

Tim Baker

Executive Director, BCRC


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Housing to gradually improve in 2012, NAR economist says

(I attended this conference and this presentation.  It was very interesting.  I have a copy of Dr. Yun’s slide presentation if anyone is interested.  TMN)


Friday, November 11th, 2011, 4:12 pm

Gradual improvement in the housing market is expected next year, with existing-home sales edging up 4% to 5% and new home sales getting an even bigger boost off this year’s record lows, the chief economist of the nation’s largest real estate group said Friday.

“Tight mortgage credit conditions have been holding back homebuyers all year, and consumer confidence has been shaky recently,” Lawrence Yun, chief economist of theNational Association of Realtors, said. “Nonetheless, there is a sizeable pent-up demand based on population growth, employment levels and a doubling-up phenomenon that can’t continue indefinitely.”

Yun, who made his comments during the annual NAR conference for real estate agents under way in Anaheim, Calif., projected gross domestic product growth of 1.8% for 2011, rising to 2.2% in 2012 with the unemployment rate declining to 8.7% by the second half of 2012.

Mortgage interest rates, he predicted, would gradually rise from record 2011 lows to 4.5% by the middle of 2012.

“Very favorable affordability conditions will dominate next year as well, which will probably be the second best year on record dating back to 1970. Our hope is that credit restrictions will ease and allow more homebuyers to take advantage of current opportunities.”

Existing-home sales are forecast to edge up about 1% this year. Based on NAR’s current projection model, existing-home sales would total 4.96 million in 2011. NAR is revising downward existing-home sales totals in recent years although it expects little change to previously reported comparisons based on percentage change.

New-home sales for 2011 are projected at 302,000 this year, a record low, with expectations that they will rise about 23% to 372,000 in 2012.

Housing starts are forecast to rise about 8% to 630,000 from 583,000 in 2011.

With falling inventory, the median home price should rise in 2012, he said.  “Home prices have yet to show a definitive stabilization pattern in most areas. Still, given an over-correction in prices, there likely will be moderate appreciation in 2012,” Yun said.

Richard Peach, senior vice president at the Federal Reserve Board of New York, said the economy continues to disappoint. “Among the significant structural impediments are the legacy of the housing boom and bust, and fiscal contrition at the state and local level.”

He promoted moving foreclosures by giving incentives to military servicemembers.

“My idea is to allocate certificates to 2.5 million service members who served in Afghanistan and Iraq that could be used as a down payment on a foreclosed home in theFannie or Freddie portfolio,” he said.  This would help to absorb the inventory and stabilize the housing market.

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Marketwatch – Existing-home sales up 1.4% in October

By Steve Goldstein

WASHINGTON (MarketWatch) — The National Association of Realtors on Monday said sales rose 1.4% to a seasonally adjusted annual rate of 4.97 million from 4.9 million in September. Economists polled by MarketWatch had anticipated a decline to an annual rate of 4.8 million in October. The September figure was marginally downward revised by 100,000. The median price of homes dropped 4.7% from year-ago levels to $162,500. Inventories declined 2.2% to 3.3 million, reflecting 8.0 months of supply at current sales rates. Lawrence Yun, chief economist of the NAR, said at a press conference that the increase in home sales was nothing to get excited by but pointed to the progress on inventories as a hopeful sign.

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Marketwatch – Why Housing Deserves a Home in Your Portfolio

By Amy Hoak, Marketwatch

CHICAGO (MarketWatch) — Now may be a great time to buy a house, given that years of falling home prices and low mortgage rates have made buying a place to live more affordable than it has been in decades.

And that’s not just a pitch from the National Association of Realtors.

A recent report from J.P. Morgan Asset Management, titled “Housing: A time to buy,” written by David Kelly and David Lebovitz, made the case for why a home may be a wise purchase.

Where to invest in real estate

Investors can find opportunities in apartment and shopping-mall REITs, according to Marty Cohen of real-estate fund manager Cohen & Steers, who advises caution around single-family housing, commercial and retirement properties. Jonathan Burton reports.

“Although the U.S. housing market remains extremely depressed, we believe that given current valuations and demographic dynamics, now may be the time to consider an investment in housing,” the report said.

Investors may be tempted to play off that theme, positioning themselves for the moment when home buyers come back in droves.

But that’s a trickier proposition than it sounds.

This housing market has been anything but predictable. And the pain inflicted during the housing recession has left deep scars, making it difficult for many people to pin their money to the belief that housing could soon be on the mend.

Plus, any recovery may be slow.

That’s because while prices are down and financing is attractive, it’s harder for people to qualify for mortgages. The high unemployment rate has dealt a blow to household formation, and other would-be buyers simply can’t muster the confidence to buy a home.

Moreover, many homeowners are underwater on their mortgage and won’t be able to sell their home, let alone buy a new one, anytime soon.

“My own read of the tea leaves is [a housing recovery is] going to take awhile, and there isn’t an obvious place to invest to play that theme,” said Craig Leupold, president of Green Street Advisors, a real-estate and real-estate investment trust research firm.

Home, sweet home

Any brave souls willing to make a bet on the return of the residential real-estate market right now might first look at home builders and the home-improvement stores as places to invest.

Builders have slashed volume in recent years, and are on track to sell 313,000 new homes this year — far fewer than in 2005, when 1.28 million new homes were sold.

In fact, builders have pulled so far back on creating inventory during the downturn, it’s possible the market could run out of existing inventory faster than expected once housing gets back on track, said Eric Landry, director of industrial sector research for investment research firm Morningstar Inc.

“When the confidence does arise, there’s not going to be enough supply to satiate it,” he said. After all, he noted, the population keeps growing and our housing stock isn’t growing with it.

Plus, he said, new buyers will want houses that are near job centers and are built for modern lifestyles, and some currently available houses won’t fit that bill.

Rooms with a view

If you think that housing sales will remain low, your best bet might be to snap up rentals at low prices.

Those with wherewithal and patience might invest in a low-priced property and turn it into a rental, which can be a lucrative move at a time when rents are on the rise because fewer people have the means — or the desire — to buy a home.

Some firms help the novice investor buy an income-producing single-family home and offer property-management support. These companies buy single-family home foreclosures, update them to new construction standards, find quality tenants, and sell the income-producing properties to investors.

“It’s geared toward your business owners and professionals who want to diversify their portfolio of investments and want to get benefits that come along with owning real estate,” said Eric Workman, vice president of sales for MACK Companies, which is based in the Chicago area. “Owning real estate without having someone else manage it for you becomes a full-time job,” he said.

Another, more liquid, option is to invest in apartment REITs. They’ll suffer if there’s a strong return to homeownership, but the sector should be solid for at least another 18 months, said Wells Fargo’s Hunt.

One big reason to look at apartments: Supply is at a 30-year low, and for every percentage point that the homeownership rate drops, another 1.1 million renters enter the market, Hunt said.

Plus, many 18- to 32-year-olds may still be wary of homeownership, since for the past several years all they’ve seen is home prices going down, Hunt added. And this is a generation that isn’t as secure as they’d like to be in their jobs, he said, so not being tied down to a mortgage will likely be important to them.

Amy Hoak is a MarketWatch reporter based in Chicago.


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