The fuse is burning: Local home sales surge, market sees ‘quiet stabilization’

By Joseph T. O’Connor Explore Big Sky Senior Editor

BIG SKY – Even after sluggish fourth quarter numbers, the national housing market continues its upward trend. Our home turf, however, is seeing a market surge.

Explore Big Sky newspaper took to the streets in early February to get a mid-winter real estate update from some of our local expert brokers.

The greater Big Sky area – as the Multiple Listing Service references it – saw 220 real estate transactions in both 2011 and 2012. In 2013, those numbers jumped to 349, according to MLS reports.

These statistics are likely low however, because as a private membership organization the Yellowstone Club isn’t required to report sales. Sources close to the club say they saw over $400 million in transactions in 2013 alone, making it a record season since the club’s founding in 1998.

The MLS figures indicate diminishing inventory and rising home prices, according to Eric Ossorio, a broker for Prudential Montana who lives in Big Sky.

“[It] means that there’s an upward pressure on pricing,” Ossorio said. “We’re seeing increased activity for sure, but it’s uneven. At the lower end, there’s still reasonably strong activity … More people can afford $200,000-$300,000 homes than $1 million homes.”

Data from MLS backs this up. Of 2013’s 349 transactions, 210 were for homes valued at less than $400,000. Currently, Big Sky homes available in that price range are scarce, says Martha Johnson, co-owner of Montana Living/Big Sky Real Estate.

“There are only eight front doors available between $200,000 and $550,000,” she said, pointing to a concerted vision that’s providing what she calls a “quiet stabilization” of the local market – Big Sky’s three major ski areas came out of bankruptcy protection in the past year.

The Club at Spanish Peaks, recently renamed Spanish Peaks Mountain Club, crawled from beneath Chapter 7 protection last July through a collaborative effort by CrossHarbor Capital Partners and Boyne Resorts. In October, the same partnership announced it was purchasing the assets of Moonlight Basin Resort, which merged with Big Sky Resort under the deal. Then in November, Makar Properties, a real estate firm based in Newport Beach, Calif., declared it was taking over operations at Lone Mountain Ranch.

“We’re [now] looking at a unified Big Sky,” Johnson said. “This winter season is the first time in about six years that all of our pillars are [not in] bankruptcy, [and] with such a strong, positive outlook, prices are stabilizing.”

So far in 2014, Big Sky Sotheby’s broker Jeff Helms has seen houses being snatched up, as well as a market shift, one he says will soon benefit sellers.

“Last year we were just absorbing the inventory,” Helms said. “Now that we have such a limited supply of inventory, you can make adjustments for views or location. We’re slowly making the transition from a buyer’s market back to a seller’s market.”

Yet bigger transactions aren’t exactly scarce, and the high-end market is moving in certain areas, said Ania Bulis, a broker at Christie’s International Real Estate/Pure West.

Bulis closed a significant property in Spanish Peaks Mountain Club on Feb. 13, and expects to close another in March. Christie’s also held the listing for a 5,738-square-foot home on Chief Joseph Trail in Big Sky’s Sweet Grass Hills area, which sold in January for $3.35 million, according to Bulis.

“[That’s] the only house in recent memory that’s sold for more than $2 million outside of club sales,” said Ossorio, referring to the Yellowstone Club and the Spanish Peaks Mountain Club.

The exception is The Big EZ, a 23,000-square-foot lodge on 60 acres, which sold for $7.5 million at auction on Aug. 9, according to Ossorio.

L&K Real Estate, a Big Sky firm specializing in luxury homes, has seen properties sell quickly in the last 12 months, said L&K owner Eric Ladd. The firm currently has more than $90 million in listed properties, including five in Spanish Peaks and 11 in the Yellowstone Club. In 2013, its first year in business, L&K brokered 48 transactions totaling $27,833,820.

“Consistent with any price demographic, properly priced, quality real estate is selling,” Ladd said, adding that luxury prices still haven’t returned to their peak prices from 2006 and 2007. “It represents a strong opportunity for buyers to get good values,” he said of the market now.

According to Ladd, the value in Big Sky is unparalleled among major ski resort communities. “Compared to markets like Vail or Jackson Hole, Big Sky’s luxury real estate is a very attractive value,” he said. “If you compare apples to apples, Big Sky is a no-brainer if someone likes what [it] has to offer.”

“And don’t forget,” he added, “Yellowstone Club is private, so when you compare this area to a market like Aspen, there should be no comparison since they don’t have a gate.”

Johnson urged potential buyers to make moves quickly in such a rapidly changing real estate market.

“Across the board in Big Sky, ski in/ski out homes are grossly underpriced compared to [places like] Jackson and Park City,” she said. “There’s a fuse burning on these listings because the [market] is coming around again.”

Two markets at a glance