Wintergreen Real Estate

Greetings from one of the most beautiful places in the world.

Summer activities are in full swing from evening concerts in the Evans Center to summer sports to children’s programs to great dining in the Devils Grill and Copper Mine (new menu) to guided hiking with Doug Coleman and great fishing, just to mention a few. The opportunities within Wintergreen while enjoying the cool summer breezes in the mountains seem endless. If you want to escape the heat and have some fun, COME! And, if you need a good deal on a place to stay, call us at (434) 325-7933. We are still 15 to 20 degrees cooler than where you are.

Now to business:

There is little doubt the upheaval in the real estate market over the past couple of years has been a jolt to the nation’s collective psyche. Economists believe we are at the trough or close to the bottom of the market and the market is starting to turn. Due to historically low interest rates, we are starting to see more activity and sales. It should be remembered that in any housing recession, housing prices are slow to recover, but sales recover faster. WREC sold in the six months from January 1st to July 1st 2009: 7 lots, 6 condos, 16 homes. In the same period of this year, we sold 14 lots, 8 condos, and 28 homes and that does not include all the sales within Wintergreen, but it is the lion’s share. It seems to be getting better. People have become more conservative in their personal finances and those interested in buying here are looking for houses and condos and home-sites that exhibit affordable value. These buyers are prudent and informed by making use of the Internet. It gives them information which makes it harder for properties which are overpriced to be noticed. Wintergreen Real Estate Company has an advantage in our market in that we have one of the most sophisticated and robust web sites in the industry. Our website www.wintergreenrealestate.com remains the primary driver of prospects to the community and eventual sales. Most Americans within a three hour radius of our community are familiar with Wintergreen through vacationing, advertising, or referral. And, although the Internet services satisfy many of a potential Buyer’s initial curiosity, there is still a tremendous need to utilize the skills of a real estate professional. The best result requires a partnership. At Wintergreen Real Estate Company, we like to utilize the strengths of the internet coupled with experienced, knowledgeable agents to make sure our buyers are making the right decision and they look to our group of seasoned experts at WREC for good advice. Understanding this real estate market will be the key to our recovery. There are still opportunities for savvy real estate investors even in a slow real estate market recovery. As mentioned, properly priced real estate sells and the other properties sit on the market. It is a great time to recommend a friend or relative. Simply put, there are some good deals out there.

A friend sent me the following note on pricing and I thought it might be interesting for our owners who have property listed for sale.

“Most of us think of numbers as describing quantities, and nothing more. Four is more than three; case closed. However, numbers have aesthetic qualities, too. There’s a reason an estimated two-thirds of items on retail shelves have prices ending in nine. It’s good for sales. Researchers have known about this nine-ending effect for nearly 80 years. Perhaps because precise prices look low — even lower than those ending in nine. A Cornell University study published recently in the academic journal Marketing Science looks at buyer attitudes toward precise numbers, both in the laboratory and the marketplace. Subjects sorted into groups and asked to make flash decisions on where a string of large numbers ranked on a magnitude scale of 1 to 9 consistently assigned higher magnitudes to round numbers than to precise, slightly higher ones.

For example, they judged $510,000 to be slightly higher on the scale than $511,534, and they saw $400,000 as considerably higher than $401,298. The researchers theorize that people aren’t used to discussing large numbers with precision, so they tend to associate precision with smallness. They call this tendency the precision heuristic (a heuristic is a type of mental shortcut that humans use to make decisions quickly, but not always wisely). The habit seems to be learned, not hard-wired; the researchers found that they could retrain subjects through additional demonstrations in which the obviously large numbers were precise and the obviously small ones were rounded.

That’s all well and good in the lab, but would the precision heuristic work in real life? It already has, apparently. The researchers studied thousands of real-estate transactions in South Florida and Long Island, N.Y., where houses sold for less than the asking price. All else held equal, houses that were originally listed at precise amounts sold for about 0.75% more than those that started with rounded prices. On a $500,000 house, that’s $3,750.” We should be willing to explore anything to get an edge for our sellers in this weak and recovering market. Maybe a price adjustment based on heuristics valuing will get a buyer’s attention.

Headlines may proclaim that real estate sales are up, but according to a recent AP Economic Survey, home values in some areas have fallen an average of 30% since 2006. We are seeing few new single-family housing starts but are seeing more additions. Our buyers are looking at existing inventory which will help absorb the standing inventory.

It is very important to remember given the slow rate of sales and the weaken economy that Wintergreen is in far better financial shape than many of other resort communities. Thankfully we have a mature community, little debt, and great leadership. I asked John Coy, the chairman of W.P.I. if I could enclose a copy of his recent letter to members, because it is pertinent and affects all owners at Wintergreen. If you are a member, forgive the redundancy, if not, it is worth noting.

“As you recall, two years ago we were in default on our loan agreement with Bank of America, and owed them about $12 million. Today, WPI’s debt consists of $7.5 million owed to the Members who participated in the private placement. We have no balance owing on the line of credit. These results were not achieved without sacrifice by many and a ceaseless dedication to the cause, but I believe that today we stand apart from many other organizations and communities that have not been able to endure the economic difficulties of the past two years.

I am especially pleased to report that on Wednesday, June 30, WPI executed an agreement with Bank of America whereby the large majority of our real estate holdings and personal property were released back to the Resort. An extremely difficult business and financial challenge which began in July, 2008 has been successfully met and resolved, in no small part as the result of the Membership’s continuing support of the Resort and the success of last year’s $7.5 million private placement initiative.

Bank of America has released all of WPI’s real estate holdings, with the exception of the Wintergarden Spa and the Associate Housing facility. The Devils Knob complex, the developable parcel known as Grassy Ridge, the Mountain Inn and Village area, and all our ski terrain has been returned to our control. We continue to maintain a $3 million line of credit with Bank of America (thus their retention of the two parcels), and our account has been moved from the “workout” group in Charlotte and returned to the commercial office in Richmond.

To be sure, the past winter helped provide WPI with its best financial performance in many years, and we look forward to reporting these results in greater detail at the Annual Meeting in October. But just as important as an improved financial picture is what I believe is the elevation of morale among the Membership and its different constituencies over the past months. There exists a sense that things are moving in the right direction and, while there is undeniably much ground to be made up and work left to do, we have the right leadership team in place to achieve those goals.

I am exceptionally pleased to be able to make this announcement, and offer my gratitude and thanks to our Membership, the management team, the entire staff who helped engineer and make this turnaround possible, and the support of the many guests and day visitors who have joined us over the years. The future of WPI is certainly much brighter today than in 2008. “

I also wanted to pass this on to you because we just recently received it from the W.P.I. Members Office and I did not want you to be confused with their new policies.

“Please note that effective May 28, 2010, the Wintergarden Aquatics & Fitness Center will become exclusive to WPI Members and Resort Guests every day, all day, 365 days a year. Patrons with spa services or enrolled in a fitness class will continue to have access to the pools and fitness center on the day of service or class. WPI Membership is available for the new set price of $5,000 for a Non-Equity membership and $12,000 for a Premier Equity Membership. The new set price for a WPI Right of Membership is $9,000. Financing is available for all products.”

In closing allow me to mention something that is guaranteed to bring great pleasure to any member of your family in addition to all the things there are to do at Wintergreen; FISHING. Wintergreen is blessed being in the middle of some of the best fishing in America. The James River and the Shenandoah River are world renowned rivers for Smallmouth Bass and only about ½ to an hour away. The Rockfish River branches merge a couple miles down Route 6 and below Skyler to the confluence at the James in the late spring and early summer is a stunning little river with spectacular fishing when the large Bass from the James are spawning. It can provide one of life’s best days on the water. The fishing is great and the scenery truly beautiful. The ponds in Stoney Creek were stocked in the mid 1970’s and those fish are big and strong enough to pull your canoe. Whether you have a cane pole and some worms or a fancy fly-rod and poppers, you will catch big fish. As a favor, just don’t kill them. The same fish should be caught by Grandparents and later Grandchildren. The trout fishing is also first class. Spend part of a day enjoying quiet solitude and a beautiful upstream hike on Stoney Creek in Shamokin Gorge. Russell Otis and WPOA under a permit from the good folks at Virginia Department of Fisheries stocks twice a year in addition to a decent resident population. Finally, for the true fly fishermen, there are opportunities to catch large trout on dry flies on the Limestone streams in the Shenandoah Valley and Western Virginia, which will rival the famous trout streams of Montana and Great Britain. Instruction is available through local shops and there are guides and information available. Call me if you need advice or have questions. Have a great summer and stop by the Black Bear Café office or the Stoney Creek Office next time you are here, It would be great to see you again.

From Tim Merrick

We have recently seen incidents of phony emails supposedly from us asking for personal information. These bogus emails are from hijacked computers. This is, unfortunately, an increasingly popular form of spam—one over which we have no control.

Needless to say, these emails are not from us. Wintergreen Real Estate has based its business on integrity, honesty, and personal contacts. We will NEVER send you an email requesting personal information. If you receive such an email, delete it immediately—before opening if possible. Call us at (434) 325-7933 if you have any questions

Calling all photographers!

As our Wintergreen and Stoney Creek property owners know, we publish a calendar every year that showcases the seasonal beauty and happenings of the area using pictures taken by our marketing staff, sales agents, and friends. For the 2011 calendar, we would like to showcase some of our local talent. As property owners or frequent visitors to the area, you are bound to have footage of the natural beauty that surrounds Wintergreen, and we’re calling for your best shots! For every month we will include a small photo from the pool of submissions that we collect. This is a contest of sorts…the photo we select for each month in the calendar will be the one that best illustrates the time of year and most accurately depicts Wintergreen in a single snapshot. Here are the guidelines for submission:

1. One entry per email address ·
2. Photos must be high resolution (check camera settings to be sure you’re shooting at high resolution or consult camera guide for more information
3. Maximum file size: 2 mb · jpeg or tiff formats are preferred
4. Deadline to submit: August 31, 2010
5. Email submissions only (web submission TBD)

To submit your photo, send the following information to calendar@wintergreenrealestate.com. Include your full name, mailing address, phone number, #years at Wintergreen, and note your permission for us to use the photo in our 2011 calendar. Include the photo as an attachment and please include your last name in the file name of the photo.

From Julie Benner

Charles Dickens once said, “It was one of those March days when the sun shines hot and the wind blows cold:  when it is summer in the light, and winter in the shade”. Those words perhaps best describe the end of ski season which officially ended the last weekend of March.

The community of Wintergreen has had one of the best ski seasons in our history. In a recent conversation, Wintergreen General Manager, Hank Theiss, mentioned that the budget for this year was about $1,800,000 and the actual numbers were closer to $3,500,000. The $1.8 million vs. $3.5 million are budgeted and projected figures for EBITDA or free cash for the year. The operating budget is closer to $31 million for this fiscal year. As you know, most of the annual operating revenue comes during ski season, so these additional funds enable deferred maintenance and improvements, put off due to past financial challenges. Rather than reiterate what you will receive through Resort communiqués, I will concentrate on the real estate markets in regard to where we are, how we got there, and where I believe we are headed this year. Perhaps it is important to first fully understand how America was affected by financial and mortgage markets and how it affected values across this nation.

From a historical perspective, government policies encouraged homeownership by making mortgage interest made tax-deductible in the same 1913 legislation that created the federal income tax. Fannie Mae and Freddie Mac were created to provide mortgages with low down payments to qualified buyers and sell bundles of those mortgages as federally backed bonds. The Federal National Mortgage Association, known today as Fannie Mae, created during New Deal Administration of Roosevelt in 1938, bought mortgages from banks, who then sold the bundled loans. Its purpose was to make more credit available and thus allow more Americans to own homes. Freddie Mac followed in 1970. Fannie Mae and Freddie Mac were officially private corporations, but as entities created by Congress, the mortgages they held were implicitly guaranteed and backed by the government. Together the two agencies held about half of the residential mortgages in the United States.  Under President Carter’s administration, Congress passed the Community Reinvestment Act of 1977 (CRA). The Act required banks and other financial institutions to offer home mortgages to those who would not qualify normally for such mortgages, such as low income borrowers and minorities. President Clinton strengthened the CRA in 1995. Financial institutions were pressured to increase the number and amount of home loans to moderate and low-income borrowers. The predictable result was an explosion in the number of sub-prime loans for which little or no down payment was required. The borrower was not even required to provide proof of income in many cases. On-line lenders and other sub-prime lenders did not care as long as they originated the loan and got their commissions. These sub-prime and Alt-A loans were risky; because the borrowers had no “skin in the game”. By 2006, nearly half of all new mortgages were subprime or Alt-A.  The banks packaged them and sold them to Fannie Mae and Freddie Mac and then they were sold again, financed by big banks, hedge funds, and large institutions. They were repackaged by Wall Street’s financial engineers and sold to pensions, and as investments all over the world. They were attractive because in a world of low interest yields these loans offered high returns. Many institutions, when purchasing these complex collateralized securities, understood what they were buying; but were able to justify these purchases because the reward of the high returns. The risk in these mortgages spread around the world as the loans were chopped up into bonds and derivatives.

When home building declined and prices fell, the universal downward pressure on consumption in America’s households spread across the nation to other industries. Debt levels created individual household financial disasters. As the market cooled and mortgages defaulted, the banks started to fail; not only because of losses on the mortgages they retained but also because of the mortgage backed securities they held. As the capital levels of the banking institutions were depleted and their leverages increased, big national firms like Lehman Brothers, Wachovia, and Washington Mutual, AIG, etc. failed. This led to a worldwide financial crisis from which we are just now emerging.

What does all this mean to a little community like ours? Wintergreen has been fortunate because throughout all of these national upheavals, we have been responsible and grounded in regard to real estate ownership. Our owners have decent FICO scores, the necessary down payments, and good jobs and a sufficient income to make the mortgage payments. Lenders rarely hesitate to make loans to our clients and owners because they are qualified and have the necessary cash to make usually a 10% to 20% or greater down payments, real “skin in the game”;  and a 2^nd home is generally a discretionary purchase for those who can afford it. Until the housing boom of the early to mid 2000s, there was a moderate wave from low to high selling ranges and good liquidity in values over the past 25 years. During the first half of this decade we saw values skyrocket at Wintergreen and agents and builders came in to the market with no concept of Wintergreen’s history or its markets. This led to a boom real estate market experienced brokers and agents had never seen before. Prices shot up and inventories shrunk.

Following the financial crisis, values are resetting downward and inventory is growing. Prices must readjust because much of the current inventory is overpriced. Values are transparent at Wintergreen and properties will bring only what the market establishes. We have been fortunate in we have had only a few foreclosures in the history of the Wintergreen, even in these troubled economic times—often from those who bought at the top of the market and have decided to walk away.

In general, the real estate market at Wintergreen has fared much better than the national average. However, there is fierce competition for buyers, who are all looking for bargains in a recessive economy. There are about 90 homes on the market on the mountain currently, 30 or so in Stoney Creek, and over 125 condos. Lot sales include about 65 home sites on the mountain and approximately 60 lots in Stoney Creek.

Although our firm saw considerably more sales closed these past couple of months than we saw for the same months in the past two years, there is still a lot of property to sell to get inventory back to acceptable ratios. Once more, real estate needs to be priced to the market, if it is going to sell.

Sales in general are fair, but improving. The days are gone when a property would sell quickly because demand was fueled by national events. I am optimistic and believe we may have gone through the worst of it, provided rates do not move up too quickly and sellers are willing to be realistic.

What does the future hold?  There is cash out there waiting for the perfect time to invest in real estate. We are starting to see stability in the equity markets and confidence restored. I believe we will start seeing a recovery starting in the 3^rd or 4^th quarter because buyers who are on hold will make the decision to buy because they see opportunity.  Long term interest rates are exceptionally low now, about 5.0% or below with no points on an 80% loan. So, if buyers find the perfect home that they plan to live in for the next several years or a 2^nd home condo or home they will take advantage of reduced prices and historically low interest rates. Rates may never be this low again in our lifetime due to the federal deficit spending.  In addition, gaining time together with family and friends who want to enjoy good times and build wonderful memories with all the amenities and facilities at Wintergreen is important. Folks with stressful and busy lifestyles are looking for an alternative. In addition, those considering waiting to buy could lose their dream home to another buyer.  Finally, this timing just after ski season, when sellers are motivated, is a tremendous opportunity to recommend a friend who is looking for a great buy and would like to be a part of this beautiful and unique environment and community called Wintergreen.

Contributed by Tim Merrick

We are on our annual spring trip out west to ski, however this year we are
visiting colleges with  our youngest son Paul as well. While in Durango we
ventured out of town one morning to the world heritage  site at Mesa Verde.
After driving 20 miles into the park we came upon the canyon cliff dwellings
and ruins of the Ancestral Puebloans. This area was inhabited from 700- 1300
AD. One of the first things that came to mind was that these people were
most likely some of the first multifamily dwellers in the New World. It is a
mystery as to why they they left. Some speculate it was drought or famine
but  who knows maybe  it was increasing “condo dues” !!

Tim Hess

Tour Guides in Training

We at Wintergreen Real Estate have been here at Wintergreen since it’s earliest beginnings. That’s why we feel we are the best qualified tour guides in the area.

However, two newbies have come to town, Tyro and Patch. Over the next few months, Tyro and Patch, guided by Kim Smith, our rental manager and long-time resident, will learn how to become tour guides themselves. You can follow their excellent adventures on Facebook, as they go to places any ordinary Penguin (and people like yourselves, too) would find interesting. Join Tyro and Patch to learn more about the area, it’s offerings, and the exceptional people that live and work here.

Facebook is all about communication and sharing. So we have added a way to share your favorite listings and rental units on Facebook. Just click on the Facebook Share link to add the listing or rental unit to your wall and share it with your friends. You must be logged in to Facebook, of course, and you will have a chance to share or cancel after you click. The share includes a picture, title, and description–with a link back to the original page. Here’s what a listing looks like:

We are proud to be the first real estate broker in the area to provide this capability.

Not to be outdone,  our agents insisted that Kim Smith also build a Facebook wall for them! Our Facebook page for the rental site is focused on (surprise!) renters. The new wall is for buyers and sellers. Become a fan for the best way to stay current on real estate happenings at Wintergreen, Stoney Creek, and the surrounding area. Click here to go to our Facebook wall.

Our team--the most experienced in the area!

March 5-7, 2010
Members Weekend

Thank you WPI Members! Be sure to compete in the Member’s Alpine Fun Race. It’s all in friendly fun! The final Wintergreen Slopestyle will highlight the season on 3/7. In addition, Wintergreen Adaptive Sports presents their annual Mardi Gras Celebration – fun and games on the slopes.

From the Resorts Calendar of events.