2nd Trailhead Lodge auction in Steamboat nearly clears out distressed inventory
December 22, 2012
Steamboat Springs — The results of the second auction at Trailhead Lodge in eight months have the potential to unstick the midrange condominium market at the base of Steamboat Ski Area.
Realtor Jon Wade, of Colorado Group Realty, said the auction produced another 20 to 23 sales and left as few as five Trailhead condominiums unsold. If the large majority of the contracts close, Wade said, the result will be that there are virtually no distressed condos on the market at the base of the ski area in that price range. The excitement among buyers at the auction and the brisk pace of sales send a positive signal about the local market, he added. Most of the units sold for less than $350 per square foot, and the condos come with underground parking and the use of a large outdoor swimming pool and an exercise facility.
"If you look at where the market was in spring, Trailhead kind of froze the whole midrange condo market," Wade said. "People still wondered what they would sell for. It really is a new ballgame now. For one thing, there are no short sales currently on the market (in medium-sized condos at the ski base). It feels really weird to be this positive, but after what we've been through, this is very positive news, no ifs, ands or buts. That was a heck of a sign."
Prices paid per square foot for Trailhead Lodge condos during the Dec. 15 auction began at $259 for a pair of one-bedroom units on the second floor, where studios typically sold for $140,000, or $319 per square foot. Condos offering two bedrooms and a den with 2.5 baths sold for about $450,000, or $330 per square foot.
SilverLeaf Financial, of Salt Lake City, acquired the six-story Trailhead Lodge building and the remaining 58 unsold condos through foreclosure proceedings last year. SilverLeaf purchased the outstanding debt of $57 million from Bank of America for $28 million.
During the first auction in May, 24 prospective buyers had their bids accepted for an aggregate $9.17 million. By early June 14, sales had closed for a combined $6 million.
This time around, auctioneer Kennedy Wilson put 30 units on the block at prices an average of 10 percent lower than what they were in the spring.
Competition for Trailhead is closer to the ski slopes at Eagleridge, Canyon Creek and Trappeurs Crossing, Wade said. But Trailhead, with its own people-mover gondola to bring the ski base closer, offers newer product with high-end finishes.
"Other than ski-in, ski out, it's the nicest hotel in town that's not a hotel," Wade said.
The project has many amenities and a large lobby with a check-in desk. What may matter more to existing future condo owners, Wade said, is that as the market moves forward and appraisers look at comparable sales in the condo market, Trailhead will fare well because its two-bedroom units, for example, are 20 to 25 percent larger than the competition and offer air conditioning.
"Now it comes down to, what can you find (to purchase any longer) that has a view?"
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com