Trailhead Lodge in Wildhorse Meadows is offering substantial discounts

UPDATE on August 18th, 2009: I received a clarification from Resort Ventures West the developer of Wildhorse Meadows which contains an important distinction that I hadn't captured so it is incorrect that remaining inventory is discounted 20%, only 3-5 units are available this way. Basically there is an opportunity to take over contracts from 3-5 people that have either severe medical or financial extenuating circumstances like bankruptcy during the approximately 2 year contract period. This often happens in pre-construction contracts like this and this is a good way to deal with these unfortunate losses where it doesn't make sense to execute the contract.

It's good for the developer and other buyers, for that matter, to close these units instead of just keeping the deposit so they are offering to assign these contracts, along with the corresponding 20% deposits, to new buyers in efforts to close all the commitments originally secured in 2007. It is also good to hear that their plan is to hold prices on the remaining inventory at prices no lower than the pre-construction prices to protect buyers and to protect their investment in the remaining land within Wildhorse Meadows. I would say that there is a good alignment of their interests and buyers in Wildhorse on this point so it makes sense.

Original post that I corrected above:
I learned yesterday from two different people that Trailhead Loadge at Wild Horse Meadows is offering substantial discounts on (now just some of) their remaining inventory. Two other brokers let me know they had been offered this. One was specific that it was at least 20%. I confirmed they were now discounting with their Sales Manager Kerry Shea.

Trailhead Lodge consists of a total of 86 condo units with around 63 under contract. Closings started in early June and according to public records as of last week 3 have closed. The developer has cited financing difficulties since loan programs have changed dramatically. According to the developer in the Steamboat Pilot the first 3 were cash buyers. It has been much more difficult to finance condos with a front desk that manages rentals so that is likely a challenge for them too. Some people may also be concerned with values given the dramatic shift in our national market. Steamboat as a whole hasn't changed nearly as much but there is no doubt that values are lower than what looks to have been the peak in mid 2007. Most units went under contract in Trailhead during that timeframe.

In addition many lenders in town are requiring 30% down plus 20% in reserves so it may be harder for people to qualify now. They have Calcon as a preferred lender and have been quoted in the paper as saying that contract holders that tried other lenders and were not able to get approval so it is taking longer to redo things. See the Steamboat Pilot article for the specifics. I have heard but don't have documents to verify that Bank of America, their other preferred lender, had to pull out because they had difficulty approving residential loans for this project. BOA may have also been one of the construction lenders but I haven't had the chance to pull the deed of trust to verify that.

I hope that we begin to see some more closings soon as Resort Ventures West has been saying that we will see more closings next week for quite some time now. The following is a quote Steamboat Pilot article on Sunday by Tom Ross:

"Trailhead Lodge development principal Brent Pearson said Thursday that although progress is being made in the effort to close contracted units at the five-story condominium building, there have been no additional closings since three cash deals were consummated in June. He said that’s about to change. Pearson said he expects to see some closings in the coming week, with multiple closings to follow each week thereafter."

If you would like to know my thoughts on anything else feel free to give me a call at 970-819-6930. As I make amply clear in at the start of this blog I am not affiliated with the developer of Wild Horse Meadows so my opinions and what I hear are my own and should be taken as such.