Discovery Land Company was in town last Tuesday night for a beautiful presentation at The Dallas Petroleum Club. If you compare developers to handbags, Discovery is the Birken Bag with a Louis Vuitton wallet inside. Discovery developed Vaquero and a number of uber high end communities from Texas to Arizona, and has the kind of sterling reputation most developers could only dream of. Discovery has developed a host of world class golf, ski, and residential first and second home communities across the globe. Last week, they were selling Texans the creme de la creme of whole ownership vacation home living, the Yellowstone Club in Montana.
Never heard of The Yellowstone Club? If you are in real estate, shame on you. Go pour a glass of wine and pull up the chair.
First, News alert: Americans are starting to buy vacation properties. Plummeting prices, volatility in the stock and bond markets, and American love of home ownership is surging through: sales are up in Aspen and even in Miami. Sales in Miami were up 34.1 percent in September from the same month last year, according to the National Association of Realtors. Sales in other hard-hit areas also rose. Atlanta was up 24.7 — well, we sent them Al Hill III — and poor price plummeting Phoenix was up a whopping 25.3% percent in September.
I keep waiting for the day when homes are given away in Phoenix.
And I’ve been waiting a long time to hear this quote, I found it in the New York Times:
“There’s a certain confidence in parking their cash here right now, as opposed to leaving it in the stock market or whatever country they’re from,” said Allison Turk, of EWM Realtors. “Their hope is for a 2 or 3 percent return on the properties today that will grow to an 8 or 10 percent return in five to 10 years. Buyers believe that vacation homes in crucial markets are priced at the bottom, while investors from abroad see these areas as safe harbors that could drive up their returns. And so the real estate cycle begins again.”
South Texas is not a troubled area, and Port Aransas condo and beach home sales are brisk and moving. Didn’t surprise me at all that Discovery came to Dallas to showcase their second home communities.
The Yellowstone Club, west of Big Sky, Montana, is probably the most exclusive ski resort in the free world. It is the world’s only private ski and golf community in the world — yes, private ski slopes, 13,600 acres of Montana wilderness and powder, 864 exclusive residences with owners dripping prestige like Bill Gates (these are the slopes where the Gates kids learned to ski) Jack Kemp, Dan Quayle and more billionaires than any ski lift has ever held. The famous over-spending founders Tim and Edra Blixseth had caviar-laced New Years Eve dinners at The Club for $1000 a plate. One spec home called the River Runs Through It home even features, yes, an all-glass passageway to the guest quarters with a heated river flowing below it. Tim and Edra are now both extremely broke and divorced, she selling her $55 million Porcupine Creek ranch in Rancho Mirage, CA saddled with what some say is $1 billion in debt.
Here’s the thing about buying into a Club with a lot of rich people: they can afford to pick up the pieces. The owners financially rescued The Yellowstone Club, and it wants to get back on track as a great, luxurious family retreat in summer and winter for hard-working (read: high net worth) people. They hope to find some second home buyers in Dallas. Think I’ll have to go there this winter and check it out for you! I’ve already checked out Spanish Peaks, which I totally loved, but which I understand is now is struggling.
Other Discovery properties include Gozzer Ranch on a rocky bluff over looking gorgeous crystal clear and pure Lake Coeur D’Alene, Idaho: marina, top-rated golf course and much more, this development offers 258 estate homesites plus cabins, cottages and luxury water-front condos.
Baker’s Bay Golf & Ocean Club is a private club and community on Great Guana Cay in the Abaco Islands of the Bahama. There’s El Dorado, another beachfront community and golf club in Los Cabos, Mexico with more luxury homes, villas and casitas; Mountaintop, a private golf and residential community in the western North Carolina mountains. Then there’s The Madison Club in La Quinta, CA and Rock Creek Cattle Company, a working cattle or what I call “condo ranch”. These places might be sharpening pencils a little harder on pricing, but they are well-funded for the most part and weathering the storm. Course, that’s what I said about Spanish Peaks. Most buyers — families with young kids or baby boomers looking to provide a legacy home for the future, are circling for even a flat investment. I mean, the stock market is doing so well right now, right?
Funniest story I ever heard about the art of selling second homes came from one of the most honest salesman I’ve ever met — Jim Jackson down at The Palms on Costa Rica. Jim was interviewing salesmen and said to one, ok, give me your best pitch — what’s your closer?
“I ask the buyer if he knows how a child spells love,” said the salesman.