Real Estate Meltdown - Ground Zero
When we last visited the ill-fated Tamarack Resort near Donnelly, in west-central Idaho, it was early April, 2008, and the unfinished "Village Plaza" sat abandoned forlornly in deep snow.
In this photo taken in September, 2009, about 16 months after my last photo expedition, the Tamarack Realty office, which I assume is closed, is on the left; the Village Plaza, still unfinished, is on the right.
Since April, 2008, as far as I know, all that's happened at the Village Plaza, which was to have been completed by December, 2008 as the heart of this newest of destination ski resorts, is it has been better winterized at great expense by the former court-appointed receiver. I understand people who signed up to buy condos here were off the hook if their condos weren't completed by December, 2008. Bye-bye buyers!
All "resort" operations ceased in March 2009, though I understand the golf course opened in July, 2009, which is a tad late, even here where the winter's snows don't melt until April.
The ski runs were opened briefly during the 2008 - 2009 ski season, but were closed when the receiver determined the ski operations were costing more than they were earning.
Unless we missed something during our tour, which is possible, as for the restaurants, grocery stores and any other standard or members-only services or amenities touted in the original promotional materials, fuhgeddaboudit, as they say in Boise. Well, I take that back - the day we were there they may have been offering rides on some sort of elevated contraption that runs through part of the development. And, as I mentioned, the golf course was open.
When we first visited the resort, several years ago, the real estate office shown here was abuzz with activity. Inside, it was all talk about the "phases" that had sold out in nanoseconds and the "phases" that were next in line for subscription. Now, the only things missing are tumbleweeds and the sounds of batwing saloon doors flicking open and closed in a dry and dusty wind.
It's my understanding the developers were relying heavily on sales of lots, condominiums, town homes, "chalets" and other, even more insanely expensive (in my opinion) real estate to finance the resort's development. Would you pay $600,000 or more for a small and vacant view lot in a new and unfinished development with no track record? How about more than $1 million for a condo?
Then bank financing for the Village Plaza dried up, the national and local real estate markets, which had been booming, cratered, the Resort defaulted on various loans, and Tamarack Resort's lenders began foreclosure proceedings.
Today, the place has a weedy and forlorn look. Some of the houses in the "custom home" neighborhood were occupied, but most weren't. Street after street of finished "cottages" looked abandoned and were becoming overgrown with weeds and runaway ornamental plants. Judging by the foreclosure notices in the local newspaper of record, some people who purchased property at Tamarack - from the mid six-digits on up - have stopped making payments and their loans are in foreclosure.
As recently as early September, 2009, it was still possible to view the Tamarack dream by visiting the Resort's own very out-of-date real-estate Web site. Now, as of mid-October, 2009, that vestige of the dream that was to have been Tamarack Resort is no longer on line.
Frankly, I'm surprised the Idaho Attorney General hasn't opened an investigation into the Tamarack Resort meltdown, which has affected people who purchased property in the resort, local residents who lost their jobs at the resort, local contractors who got stiffed, and local suppliers of building materials. Well, perhaps the AG is on top of it; one often doesn't hear about such things until the authorities decide the time is right.
For a peek at part of the real estate scene at Tamarack today, go to tamarackshortsales.com/ What strikes me, and this is just one man's opinion, is how cheap some - not all - of the interior finishes and furnishings look in relation to the still-astronomical prices being suggested for short sales and foreclosed properties. The look is meant to be mountain rustic, but in my opinion, and I realize tastes can differ, it comes across as poorly designed and executed, with odd proportions, surprisingly little fine finish carpentry detailing, and lots and lots of sheetrock.
Ugly or loverly, it looks like real estate prices within the Tamarack Resort are hurting.
For example, in Volume 6, Issue 3 of Homes & Land of McCall, Cascade & Donnelly, (odd how such publications never display a date) the local magazine-sized glossy real estate marketing publication, a photo of a handsome 3,100 square foot "Custom Chalet Home at Tamarack Resort" appears above the caption "Short Sale at $699,00 - Reduced from $2.5 million."
How would you like to own the Custom Chalet Home next door, having paid closer to $2.5 million than $700,00 for it? And with this line of homes short selling at 30 percent of - what - purchase price or someone's notion of fair market value - for the time being it would seem that any sales, forced or voluntary, are going to end up looking a lot like fire sales.
So, in my opinion, Tamarack Resort is very near the tipping point: either a buyer rides in on a white horse, takes the resort off the banks' hands, and resumes construction or, worst case, the banks repo the chair lifts, causing real estate values to sink faster and deeper than the Lusitania. (For those of you who aren't up to speed on your famous shipwrecks, the Lusitania, a 700-foot-long passenger liner of over 30,000 tons with over 1,900 souls aboard, sank in just 18 minutes after being torpedoed off the Irish coast by a German U boat in 1915.)
A key test for the would-be resort and the remaining homeowners alike is whether the ski hill opens for the 2009 - 2010 season.
There may be a middle ground for Tamarack, but I don't know what it would be.