An Avalanche of Price Cuts

By NANCY KEATES

The hard sell has hit high-end ski areas.

"ANOTHER PRICE REDUCTION!" shrieked a recent email to Aspen, Colo., real-estate agents in bold red 48-point font, advertising the fact that a large home in the exclusive community of Starwood was now asking $9.95 million, 38% less than its original $15.95 million asking price. "CONTRARY TO RUMORS, 101 STEIN IS NOT UNDER CONTRACT!" screamed another, in lime-green size 24 font, about a ski-in, ski-out townhouse now asking $4.8 million, down from $7.4 million. But the biggest shocker, says Aspen broker Pamala Steadman, was the email reporting the markdown of a mansion on Red Mountain—a prestigious area of a prestigious town—to $19.9 million from $28 million.
Prices Slashed on Ski-Resort Homes

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Mason & Morse Real Estate

An Aspen townhouse cut its price to $4.8 million from $7.4 million

Fall has long been considered a good time to hunt for good ski deals, from season passes to condominium rentals. But this year, the biggest discounting isn't just on lift tickets and goggles; it's on custom-built homes with views and slopeside condos with Jacuzzi tubs. "This is really unheard of," says Ms. Steadman. "Sellers are finally getting desperate."

Like the rest of the luxury real-estate market, elite ski areas initially held up better at the beginning of the housing downturn, seemingly immune from the rash of foreclosures sweeping across less-affluent communities. That was even more true at ski resorts, where land use restrictions limit inventory and buyers are often less reliant on credit. For a while, sellers just took their homes off the market.

But this summer the high-end finally hit a wall, because of the lack of financing for large "jumbo" mortgages as well as the fact that federal rescue measures only applied to lower-priced properties. According to the National Association of Realtors, sales of homes over $1 million fell 1.2% in September from a year earlier. The crunch was then exacerbated at ski resorts, where a number of projects begun before the housing bust have just been completed, says Rod Slifer, principal of Slifer Smith & Frampton Real Estate in Vail, Colo. "That's put extra pressure on prices," he says.

In Sun Valley, Idaho, a favorite spot for CEOs, a 12,000-square-foot home on 10 acres with a guest house and six-stall barn was reduced for the second time this month to $7.9 million, more than half off its original asking price of $17.9 million. Nearby, a newer six-bedroom home on 2.5 acres is at $6.5 million, down from $8.5 million. "Prices are much lower now," says Suzanne Williams, an agent in Ketchum, Idaho. According to the Sawtooth Board of Realtors MLS statistics, for September 2009 there were 14 home sales with a median price of $465,000 compared to 20 sales with a median price of $830,000 in September 2008.

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Carol Dopkin Real Estate

This estate asks $9.95 million.
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Prices also fell sharply this summer in Jackson Hole, Wyo., known for its steep slopes and rugged feel. According to the Teton Board of Realtors MLS, nine homes sold with a median price of $800,000 this past September, compared to 12 sales and a median price of $1.3 million in September 2008 and 19 sales and a median price of $1.04 million in 2007.

Park City, Utah, a popular destination with a mix of high and moderately priced homes, has shown some signs of stabilization. The number of homes sold as of August of this year was the same, 50, as it was by August 2008, an improvement over the winter. But pricey Upper Deer Valley is still struggling. "I'm willing to go another year," says Craig Mogel, a developer in Deer Valley who initially listed a home he built at $9.95 million in the fall of 2007 and reduced the price by $1 million a year later.

Nowhere is the fire sale hotter than in Aspen, where four homes were sold in September of 2009 with a total value of $24.2 million, down from 11 homes sold in September 2007 with a total value of $71.8 million, according to MLS statistics from the Aspen Board of Realtors. "There are unbelievable bargains now," says Carol Dopkin, of Carol Dopkin Real Estate.

Ms. Dopkin is representing the house in Starwood that's down to $9.95 million. It is a top-to-bottom eight-year renovation of a 9,900-square-foot, seven-bedroom home on six acres with a four-stall barn and a guest house. Owner Debi Roblin Cook, who lives in Hawaii, says the current price is less than the amount she and her recently deceased husband put into the redo. "There's been some interest, but it's like people almost want you to give it away," she says, declining to say whether she would further reduce the price if the home fails to sell. She says she did get an offer a few years ago for $16 million which she now regrets rejecting.

Some agents think the market will pick up in the winter, traditionally high season. Developer and real-estate agent Sallie Golden and her partner finished a 6,000-square-foot home on 910 W. North St. in Aspen's West End in September. When the property sat unsold at $10 million, she dropped the price to $6.8 million. She received three serious offers and finally closed on a deal last week.

Meanwhile, the emails directed to brokers (and their clients) keep on coming. In October a brand new, four-bedroom, four-bathroom condo in the heart of Aspen originally at $8 million fell to $5.5 million. "PRICE REDUCTION!" the 24-point font bellowed. "FURNISHED!"

Write to Nancy Keates at nancy.keates@wsj.com