A stroll down the beautifully
appointed corridor of Copper Ridge, a spectacular six-penthouse
development in the heart of downtown Ketchum, is a lonely one. All six
of the $2.5 million to $3.3 million condos have remained empty since
they were built in 2004. Has the Wood River Valley’s real estate bubble
burst? And where do we go from here?
Changing the Landscape or the
Wood River Valley
Over the past three
decades, Blaine County’s skyrocketing real estate prices have resulted
in many year-round residents struggling to
survive in a high-end resort town. How can
the Wood River Valley reconcile its undeniably attractive wealth with
the real need to maintain a sustainable community? As the market
stutters nationwide, Greg Stahl took this opportunity to examine the
changing reality of the valley’s real estate. Photos by David N. Seelig.
Much has changed in
25 years, but maybe nothing quite as dramatic as inflation of property
values in Sun Valley and the surrounding area. In 1982, the cumulative
net value of all properties in Blaine County (which includes the cities
of Bellevue, Hailey, Ketchum and Sun Valley) was $912.5 million. By
2006, those same properties were worth $11.72 billion. It was an
explosion that affected all corners of the local economy. Realtors and
construction companies rode the wave of inflation to prosperous careers
while local elected officials struggled to stem the flooding tide with
regulations encouraging smart, controlled growth.
The side effects were
unmistakable. Facing ever-escalating home prices, people making lower or
middle incomes were met with formidable challenges in their quests to
secure permanent toeholds in the valley. In the late 1990s, local
governments began to respond, but it is questionable as to whether they
acted soon enough. Currently, Blaine County faces a 2.5 percent negative
growth rate of its 20- to 39-year-old residents, according to U.S.
Census data. And that is despite the fact that the county continues to
experience 11 percent overall population growth.
The myriad of
variables at work is astounding. Climbing home prices, which contribute
to a mass exodus of the area’s youthful vitality, increasing government
regulation, and a ceaseless influx of staggering wealth are all at play.
“You can tell ’em I’m confused,” said Drew Sanderford, associate
director of Blaine County’s affordable housing agency. “Tell ’em we sat
out here for an hour trying to figure out how to tell this story, and we
couldn’t. I mean, how do you explain this to people? You don’t. You have
to live it to know it.”
Sorting out the stew
Blaine County is a complex demographic stew. Like many Western resort
areas, it is well-known for its wealthy celebrity residents, but it is
also very much a real community, a place where average people try to
carve out average lives, and the presence of the über rich is just
another part of everyday life. And that is one of the area’s most
redeeming qualities, said 30-year local Realtor Sherry Daech, who
specializes in high-end real estate. “That’s part of what makes this
community special. Those clientele, they’re treated like normal people.”
But that clientele, and the reasons they’re drawn to the Wood River
Valley, have an unmistakable role to play in the ever-inflating cost of
a home here. As people with deep pockets arrive, able and willing to pay
astonishing prices for second or third homes, the cost of the entire
market goes up. Simultaneously, the money they bring feeds a sizeable
chunk of the local economy. Without them, there would be fewer
architects, fewer engineers, fewer restaurant employees, and, yes, fewer
writers. It’s an ironic situation. Outside money makes it possible for
middle-income people to live here and simultaneously puts local real
estate out of reach for many.
following 9/11 and the subsequent tanking of the stock market, investors
began to look to real estate as a safe venture. Low interest rates only
helped catalyze the feeding frenzy. Between 2001 and 2006, the county’s
assessed property values soared, more than doubling from $5.6 billion to
$11.72 billion. As momentum mounted, increasing numbers of people got
into the game. The market fed itself. Prices spiraled upward, and Blaine
County now has somewhere in the neighborhood of 400 real estate agents.
That’s roughly one agent for every 50 full-time residents. “It was just
happening. People were coming here. We have a fabulous place to live,”
said Daech. “We are so lucky, and we still have a great sense of
community, and we’re not as pricey as some other Western resorts.”
Realtor Sherry Daech is a self-made success story in a league of her
own. She arrived in Blaine County some 30 years ago, young and
practically penniless. Today, following an astoundingly successful real
estate career, Daech is one of the most successful local women of her
generation. Is it possible to mimic Daech’s success in the socioeconomic
climate of today’s Wood River Valley?
Where there’s a boom…
As with all booms, there is the inevitable deflation. And while local
commentators stop short of predicting a bust, they do concede that the
real estate market has slowed considerably, both here and nationwide, in
the last six months.
Daech and other local real estate agents say the “market is readjusting
itself” following the boom of the last five years. But however you label
it, streets throughout the valley are congested with real estate sales
signs, especially in Hailey, as the area experiences a housing glut.
“Things went up so
quickly about a year and a half ago,” said Asa Chandler, an agent with
Windermere Real Estate in Ketchum. “The market is kind of correcting
itself right now. It’s a great time to be a buyer.” But what she didn’t
say, and the kind of information real estate agents in general are not
too likely to offer, is that if current trends continue, it may be an
even better time to be a buyer in another few months, or maybe another
In the month of
October, if you were looking to buy a home in Blaine County there were
on average 1,100 of them to choose from, and that number may be growing.
That’s about 400 more than this time last year. “It’s a good time to
look around and make an offer because there are deals to be had,” said
Jim Figge, president of the Sawtooth Board of Realtors. Correspondingly,
prices have begun to drop, in some cases by more than 10 percent.
Chandler referenced a Hailey home listed in September for $250,000. The
asking price three months earlier had been $315,000.
that the residential housing market is unusually flat. “Our phones are
more quiet than usual. I think there are a lot of people who have a
sit-back-and-wait attitude,” he said. “Buyers are witnessing that our
market is in a period of adjustment, and they’re electing not to buy.
They’re waiting to see what the market will do.”
In October of 2006, the Sawtooth Board of Realtors’ Multiple Listings
Service showed 1,038 residential properties for sale. That was down
slightly from 1,079 on July 31 and up from 791 listed in July 2005.
Including commercial properties and vacant land, there were 1,723
listings on October 8. Ann Tokareff, the board’s executive officer,
explained that some of the listings are for homes outside Blaine County,
but the majority are situated in the Wood River Valley.
Figge is hesitant to
call the housing surplus a glut because it doesn’t apply to all segments
of the market. Expensive homes fronting golf courses are still in high
demand, but single-family homes, particularly in Hailey, are plentiful.
So, what’s going on
with the valley’s housing market? Three things, said Figge. The market
has leveled off and is readjusting following the recent real estate
boom; interest rates are higher; and people are reacting to worldwide
events. He also commented that some sellers have overpriced their
properties. Now that the market has flattened out, they may have to
lower them if they’re anxious to sell. “I don’t think anyone is chipping
into their equity yet,” he said. “I think what sellers need to do is
make it look like a deal, so it looks like if you don’t buy it, the next
guy will.” If sellers can wait, though, prices are likely to go back up,
Figge said. “Historically, our prices have not gone down, but just
flattened. And how long we’re in this flattened mood, I just can’t
Windermere of Ketchum’s designated broker, agrees. “This market is still
a very desirable place to live,” he said. “If people had the chance to
move here, would they? Yes. But without job growth, it can only support
so many people.”
Where have all the young people gone?
Job growth is a crucial aspect to this local quandary. Second-home
owners and pleasure-seeking vacationers aren’t attracted to a town
without vitality, and without jobs and affordable housing, that sense of
community—which many people cherish and see as a selling point for this
Although the careers
associated with the development of high-end real estate sales and
construction have fed a significant chunk of the local economy, their
product comes at the cost of affordability. “I was talking with a guy at
work last week, and he’s lived here his whole life,” said Dan Gilmore,
who’s called the Wood River Valley home since 1999. “I asked him how
long it takes to be considered a local. He said about 10 years—long
enough to see one full rotation of friends come and go.”
And so it is with
many of the area’s 20- and 30-something residents. They come, and they
go, but when they go they take slivers of the area’s youthful vitality
with them. What’s more, evidence indicates that more of them are leaving
than in times past. “It’s vacuous,” Sanderford said. “I mean, people are
The U.S. Census
Bureau backs Sanderford’s assertion. From 1970 to 1980, Blaine County
experienced a significant jump in its 20- to 39-year-old population,
from 26 percent of the total to 46 percent of the total. But it has been
declining ever since, both in percentage and, occasionally, in overall
numbers. From 1980 through 2004, the percentage of 20- to 39-year-olds
dropped with each census, from 46 percent in 1980 to 37 percent in 1990
to 29 percent in 2000. The projected number in 2004 dropped still
further to 26 percent.
1980, the number of people in that age bracket has stayed the same, or
even dropped slightly, while overall population boomed, from 9,841
people in 1980 to 21,103 in 2004.
Although many young
people never intended to stay for the long term, some might have if it
were easier to make ends meet. At the root of the matter is that area
wages increase at an average pace while real estate shoots through the
roof. From 2001 to 2004, average annual individual incomes in Blaine
County actually decreased, adjusting from $31,802 to $31,770. In that
same period, the assessed net value of Blaine County properties
increased from $5.6 billion to $8.1 billion, according to a July 2006
Blaine County Housing Needs Assessment. Clearly, wages have not kept
pace with the inflation of real estate. Somewhere, something has to
Aaron Domini, 27, has
lived in the Wood River Valley for three years and has worked for
Citizens for Smart Growth and Ketchum-based Living Architecture. He said
the relative absence of 20- and 30-something residents creates a unique
social dynamic for people like himself who have chosen to stick around.
“You end up expanding your social group,” he said. “I’ve got friends
from 20 to 50. If I lived in a city, it would probably be very
Domini stressed that the situation in the Wood River Valley is not
unique. It’s endemic to mountain towns around the West, and, for the
time being, the area’s boons far outweigh its pitfalls for him. However,
if we want to keep Ketchum a desirable place to live with a vibrant
community, it will take a diverse socioeconomic community and people of
varying ages. The reality is that without young professionals as the
backbone of our economy, we are creating an economy with no successors.”
The real missing link, however, is housing that people of varying
classes and demographics can afford. It’s a relatively new, sometimes
contentious issue that has made progress on the affordable front
In the fall of 1998,
during the local housing program’s infancy, affordable housing took
center stage in Blaine County’s resort city of Ketchum as some citizens
tried to initiate a recall of Ketchum City Council members who voted in
favor of the city’s first affordable housing project. A slew of letters
to the city offered varying complaints. Some were concerned that the
“quality of construction” would not be up to par and would devalue
surrounding houses. Some worried the two-bedroom condos, first planned
as rentals but which were eventually sold at $135,000 each, would
attract criminals as residents. “If you can’t afford to live (here),
then leave,” one applicant for The Fields reported an anonymous caller
saying in October 1999.
The recall petition
failed for lack of signatures, and some might argue that shows overall
community sentiment was accurately reflected in the City Council’s
decision to give The Fields the thumbs up. The contradiction is nothing
new in the affordable housing arena. NIMBYs (the not-in-my-backyard
people) generally recognize the need for housing at all prices, as long
as it’s in somebody else’s neighborhood. “In society in general, that’s
always been a problem,” said current Ketchum Mayor Randy Hall, who was
one of the three City Council members targeted by the petition. “But the
needs of the many outweigh the needs of the few. It was the first
project, and it came on the heels of a very emotional debate. I think we
did pretty well on our first go-around. The project was a success.”
Still, local communities are far behind the curve. A 2002 study found a
countywide deficit of 473 affordable housing units. That demand grew to
1,200 units by summer 2006. Yet, developers continue to build
multi-million-dollar condominiums that sometimes sit empty.
continues to displace area workers. Sanderford has worked as associate
director of the Blaine-Ketchum Housing Authority for more than a year.
He said affordable housing is both important and contentious. More than
that, he said, it’s simple altruism that drives it. The community must
collectively decide that a sense of community is something worth making
some sacrifices for. “When you think about it at a real visceral level,
it’s the right thing to do. Community is a good thing.”
What does it all mean?
No matter how you cut it, the bottom line is still that Sun Valley and
its surrounding communities constitute a magnificent place to live.
People will continue to retire here. People will continue to carve out
ordinary livings as best they can. And local real estate prices will
probably continue to climb.
Daech, who is a self-made success story, arrived in Blaine County some
30 years ago, young and practically penniless. She fell in love with the
place and made things work. She is one of the most successful Wood River
Valley women of her generation. And, yes there are still success stories
to be made here. But it is debatable as to whether today someone like
Daech could arrive here with nothing and build such a resounding
Nevertheless, the bottom line is that places like Sun Valley will always
be in demand, said Daech. “If we weren’t so unique and so small and such
a wonderful community, I might think that (the market could take a
downward turn), but I don’t,” she said. “I think we were all surprised
by how much the market grew, but it’s there, and I think it’s going to
What you get
in Blaine County?
In September 2006,
writer and local resident Timi Saviers enlisted Realtor Barb Vanderpool
for a tour of homes that could be purchased throughout the valleyfor
around $650,000. A single price range was chosen in orderto illustrate
the impact of location on a property’s price. Starting south of Bellevue
and working their way north to Sun Valley, the pair discovered a variety
of abodes in the price range, although not a wide inventory. A brief
foray north of Ketchum found not one slice of acreage in the allotted
South of Bellevue
List Price: $699,000
Interior: 2,021 sq. ft.
Lot Size: 20 acres
Date Built: 2001
This area of the valley has a true country feel and is a 40-minute drive
to Ketchum. A comfortable single-family home with a few nice touches,
such as high ceilings, alder cabinets, custom closets and a country
porch, the 20 acre lot would benefit from some landscaping to create
privacy and ambiance.
List Price: $649,000
Interior: 2,794 sq. ft.
Lot Size: 0.28 acres
Date Built: 2006
This single-family home is newly constructed, has quality interior
finishes and ample living space. It has cathedral ceilings, hardwood
floors, granite counters, slate tiling, spacious bathrooms, walk-in
closets, a custom fireplace and a guest/bonus room with bath and
excellent views over a large garage.
List Price: $649,000
Interior: 2,305 sq. ft.
Lot Size: 0.59
Date Built: 1991
Situated on the northern edge of Hailey this single-family home is a
short bike ride to town and a conservative 20-minute drive to Ketchum.
Located on a bench lot in an upscale neighborhood, this is a very
livable home. High ceilings, custom closets and a practical floor plan
create a comfortable
living space. The kitchen is in need of an update and a few cosmetic
touches are required throughout, but the home has a clean and quiet feel
with several large
windows looking out onto a private and nicely landscaped yard.
List Price: $699,000
Interior: 2,628 sq. ft.
Lot Size: 0.66 acres
Date Built: 1971
This home with “potential” is in the beautiful and sought-after East
Fork area. With lots of sun, mature trees and access to many trails, the
location is great. A darkly cabinesque home with an awkward floor plan,
everything about this house looks original, 35 years old and vintage.
However, it is not easy to find a place for this price between Hailey
and Ketchum (no condos), and the location can’t be beat.
List Price: $695,000
Interior: 1,166 sq. ft.
Date Built: 1999
This condo is a short walk to the River Run lifts and steps to the bike
path. On the second floor, the condo has a short, but dark and
under-a-freeway-bridge-like entry corridor. Just hurry and get that door
open because inside it is bright, warm and welcoming. The kitchen is a
dream with thick, rich, granite counters and spacious bathrooms with
designer finishes. The living room, though not large, has a high
ceiling, a lovely fireplace and French doors onto the deck with Baldy
views. The main bedroom also has French doors opening onto the deck with
more sun and more views. All this and it comes nicely furnished, too.
List Price: $682,000
Interior: 1,598 sq. ft.
Date Built: 2006
Utilitarian elegance describes this Pine Ridge townhouse. The
well-thought-out floor plan, radiant heat cement floors and great closet
space make it a practical home, while the finishing touches, such as
slab granite and travertine in the kitchen and bathrooms, alder
cabinets, solid doors, high ceilings and architectural details lend a
custom feel. Throughout the home, large windows bring in plenty of
natural light and views of surrounding mountains. The courtyard is
thoughtfully landscaped with native mountain ash and pine and there is
plenty of storage for cars, skis and bikes in the attached two-car
garage. Close to town and one mile from Warm Springs lifts, this place
seems to have it all.
List Price: $605,000
Interior: 980 sq. ft.
Date Built: 1967
Located across from the Sun Valley Reservoir, this condo is steps away
from Sun Valley Village, ice-skating, tennis and swimming pools and is a
short walk to Dollar Mountain lifts. The condo is quite small but clean
and seemingly solid. It looks like all the original interiors are
intact: wood-beamed ceiling, darkly paneled walls and craggy, volcanic
rock fireplace. The kitchen and downstairs bath are clean but tiny. The
bedrooms are upstairs and, though small, have nice windows with views
over the treed grounds.
History of a
The following is
information on one property from the Sawtooth Board of Realtors’
records. A three-bedroom, two-bathroom, 2,300 sq. ft. home in the
Ketchum neighborhood of Third Avenue and Edelweiss Street was on the
market for $135,000 in 1986, $319,000 in 1996, and now goes for
somewhere in the region of $1,185,000. That’s a rise of more than
$52,000 a year. However, home prices in this valley are still reasonable
when compared with other Western resort towns. In Aspen, Colorado,
$650,000 will get you a one-bedroom, one-bath, 543 sq. ft. condominium
built in 1970. Even with a softening housing market, the Wood River
Valley is still a good investment.