| Home Values Plummeting In Colorado Ski Resort Communities
After nearly twenty years of property values steadily climbing in Colorado's top ski resort communities, prices are dropping in many of these upscale areas. In counties like Summit, Routt, Eagle, Pitkin, and San Miguel, home values have plummeted for the first time in more than 19 years, and by as much as twenty percent in most areas over the last couple of years.
In Eagle County, for instance, local assessors report a countywide average decline of about 30 percent in prices for home, commercial, and undeveloped properties. That 30 percent drop in residential property value is more than triple the average decline for homes across Colorado's 64 counties.
The steepest declines haven't occurred in the richest of the state's resort areas. Although Beaver Creek's Bachelor's Gulch and Aspen's West End suffered 20 percent declines in home values, the declines were mainly fueled by price declines in those areas' working-class area away from the slopes.
In other areas, price declines have been even more severe. Two years ago, for instance, the average home in Basalt, Colorado was worth over $1 million, and has since fallen to just about $500,000. For several years, prices in the community were rising about 2 percent every month, peaking in late 2008 and early 2009, but have fallen even more drastically than they rose ever since resulting in a more than 50 percent drop in the average home value in the community over the last two years.
The areas hit hardest by recent drops in home values are the same communities that saw drastic increases in 2008 and 2009, before the housing bust hit Colorado's mountain communities. During that time, prices in these upscale communities were rising by at least ten percent every two years. Insiders say the collapse is the first residential property value declines of this extent in Colorado's montainous areas since the late 1980s, when the savings and loan crisis and oil market collapse triggered the last real housing bust in Colorado.
The value declines are so severe, in fact, that they are affecting the state's strapped budget, as well. State funds are used to cover lost property tax contributions for education, adding another $140 million to the state's already-inflated $1 billion budget deficit. In resort areas where county officials rely heavily on property tax revenue, leaders have already begun taking steps to prepare for a massive expected drop in property tax revenue in 2012.