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After Years of Declining Values, Prices for Second Homes in the Woods, Near Ski Lifts, and in the Desert Are Finally Recovering : Resort Sales Pick Up

September 11, 1988|DAVID W. MYERS | Times Staff Writer

Whether your dream vacation home is a rustic cabin in the woods, a chalet near the ski lifts or a modern condo at a desert country club, turning that dream into reality may be cheaper now than at any other time in this decade.

Prices in most resort areas frequented by Californians have changed little over the past few years, in sharp contrast to the overheated urban markets. Values in many second-home areas have actually declined.

But the factors that led to a drop in both sales and prices earlier in the '80s--a recession, high interest rates, overbuilding and then tax reform jitters--are now only memories.

"Sales seem to be picking up in just about every resort area," said Joel Singer, chief economist of the California Assn. of Realtors. "It looks like things have finally bottomed, and now they're on an upswing."

Singer said the turnaround is the result of several factors. Interest rates are still fairly low, family incomes have been rising, many baby boomers have lots of disposable cash and Congress hasn't tinkered much with tax deductions for second homes--all of which tends to fuel sales in resort areas.

But while brokers in most resort areas say sales took off earlier this year, prices are only now beginning to rise--which may make this an ideal time to buy a second home. Here's a sampling of how much it would cost to buy that dream getaway spot:

Ski Resort Popular

"Two-bedroom condos near the ski lifts start at about $80,000," said Janet Stevens, a broker in the mountain community of Big Bear, 103 miles northeast of downtown Los Angeles. "That mania that has taken over the housing market down below is only now starting to take hold here."

Although sales across the Big Bear Valley are brisk, much of the activity is taking place in the Sugarloaf area, about 6 miles east of the popular Snow Summit Ski Resort.

"An A-frame there, with two or three bedrooms, starts at $45,000," Stevens said. "Since the mortgage payments will be fairly low, it's drawing a lot of people who want to rent their place out when they're not using it themselves."

The same cabin closer to the ski lifts will cost about $75,000. People who want bigger spreads are looking at Baldwin Lake, about 11 miles east of Snow Summit, where 1-acre parcels are selling for $40,000.

In the Sierra town of Mammoth Lakes, 307 miles north of Los Angeles, broker Phil Hamilton says sales of cabins and other detached homes took off about five months ago. Condos followed suit last month.

"Prices dropped about 45% between 1980 and last year, but now they're solidifying, and we're starting to see some increases," he said.

The average two-bedroom condo with a loft sells for $90,000, he said, although studios can still be found for $45,000 or $50,000. A single-family home "with a decent view of the mountains" starts at about $150,000.

"About 90% of my buyers are from the Los Angeles-San Diego area," he said.

Prices are generally a bit lower in South Lake Tahoe.

"If you're looking for a basic, no-frills ski condo with two bedrooms and one or two baths, you can get one up here for about $43,000," said Debbie Jacobson, a broker in South Lake Tahoe. "A nice two-story ski chalet near the ski lifts, with two or three bedrooms, runs in the 70 thousands or 80 thousands."

Palm Springs Area

"I'm the busiest I've been in the eight years I've been in the business," she added. "Condos and detached homes are both selling well, but detached homes generally have the best appreciation potential. People want some land and sometimes a garage."

Vacation-home buyers seeking warmer climates are once again flocking to the Palm Springs area, 108 miles east of Los Angeles, where a "condo glut" is finally beginning to disappear.

"Most of the people buying second homes here are spending about $150,000," said real estate agent Steve Scheinwald. "That will get you a two-bedroom, two-bath country club condo with a wet bar, fireplace and 1,400 or 1,500 square feet of space. You'll be on the fairway, or close to it."

"Three years ago, that same condo would have sold for about $5,000 more," Scheinwald said. But after a prolonged decline, he said, "prices seem to have stabilized, sales are picking up, and we're starting to see some appreciation."

Stories Misleading

Prices and sales have been rising for more than a year in many parts of Hawaii, another spot where many Californians own second homes.

However, "all those stories about Japanese investors buying up all our condos and driving prices through the roof are misleading. Prices have exploded in Waikiki, but they're not nearly as high in most other areas of the islands," said Mike Sklarz, director of a Honolulu-based sales and research firm.

The lowest-priced two-bedroom condos--about $100,000--can be found in Kihei on Maui, Princeville on Kauai, and Kona on the big island of Hawaii, Sklarz said.

Mid-Priced Buys

Generally, properties in master-planned communities are better buys than homes in areas where growth isn't as well thought out, Sklarz said. "The master-planned areas tend to have better appreciation potential and their atmosphere won't be ruined by haphazard growth," he said.

Mid-priced buyers who want both good investment potential and a quality resort should stick to Oahu, the only island with a diversified economy that isn't hyper-sensitive to the health of the tourism industry.

"The Turtle Bay Resort, a little north of Waikiki, is really an undiscovered resort area, and Hawaii Kai, on the southeastern tip of the island, is really nice," Sklarz said. Prices in both areas range from $150,000 to $200,000.

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