the tragic state of real estate

Well well well. This is the post I've been speaking of for awhile now. I find the time appropriate to talk about the dire real estate situation here since I watched a DVD last night about the destruction (in terms of over-development) of mountain towns like Vail and Aspen, which are turning into lifeless towns that serve as retreats for second home-owners who have priced out all of the people give actual life to the town. It really was a sad film, and it's sadder to think that this may be happening as we speak here in Telluride.

Take a look at the photos above and the homes you see there. The four on the left? Those are what you can buy for anywhere between $1.4 million and $1.7 million. No really. And the house on the right? That one is $1.25 million. But if you look closely, you will see that it is a wreck. Rumor has it that the floor inside is the same as the ground outside - dirt and rocks. It's been around for ages and appears to be almost un-inhabitable. But look how considerate the realtor is who listed this home - to the right, they have included their recommendation of what to do once someone purchases it - tear it down and build that model! Why of course - buy something for $1.25 and then pay for the tear down and re-construction! What a deal. I find it so offensive that almost 90% of the already overpriced listings explain how these homes should be seen as development potential - they can be torn down and rebuilt, they can be renovated then resold, etc etc. What has happened is that there are now multi-million dollar homes, hovering around the $6-7 million mark, with bowling alleys, home theaters, indoor hot tubs, etc. Over the top, unnecessary extravagance. And the irony is that this extravagance is being built by and for people who spend maybe a month total out of the year here. The rest of the time the homes are empty. The town is pitch black at night since no one is home.

Sure, you could say, what's the big deal? It's just like New York. It's so expensive there, but that's just the way it is. Well, yes. That is true. However in New York, there is income opportunity. There are too many companies to count where one can build up quite a large income and make enough money to afford the rent or mortgage. However, Telluride is a town where people work mainly in the service industry and most likely make minimum wage or a bit more, and the people who are lucky enough to have year-round, full time jobs often struggle to find customers and clients as people are mostly in and out here - for festivals or for skiing or just for vacation. Those who have retail stores have to pay exorbitant amounts in rent (those prices have skyrocketed too) and have sporadic customers who come in and hopefully buy enough to pay the rent. It's tough to make a living here, and unless you come from a wealthy family or have won the lottery, there is no way you are making enough money to afford a multi-million dollar home. It is so sad that there is no actual home in town - with no shared walls, with a yard, etc - for less than $925,000.

Also troubling is the fact that the market is slow. It's slow in the U.S. and there is no difference here, but these people keep their homes on the market for these ridiculous prices, not budging. It seems very rare that they drop their prices, so these homes sit there, empty and overpriced for many many months. The second home-owners with their homes for sale have no motivation to drop the price - they'll wait until they get the price they want - because they've paid cash for their place and aren't losing anything by leaving it there and they want to make their million. Which as you can imagine, takes even more away from the town.

People argue that you can live down valley, outside of town, for a much cheaper price. However, these "towns" don't have stores, they don't have anything really besides homes, so if you do live outside town, you have to drive windy roads to get to Telluride to do pretty much everything, from buying your milk to doing your job. Factor in the winter when roads are treacherous and you are adding on more travel time and risky, dangerous driving.

It appears that things are so transient here because of it - the people who love it here and are true locals can't stay because they can't afford to be here. No matter how hard they work, they could never buy a home here. I'm waiting for the day when they have no one here to service these rich second-homeowners because no one can stay. Maybe they will put up a stink then when there is no one here to make their latte.

Can you tell I feel very strongly about this? Sigh.