Luxury Resort Area Still Feels Real Estate Pinch

Big Sky, Mont., is a favorite getaway spot for the super-rich, but that hasn't kept the area's real estate market from feeling the pinch in the current housing slowdown.

The community, an unincorporated area about 45 miles east of Bozeman and 50 miles from the northern edge of Yellowstone National Park, is anchored by four large resort developments on and around the 11,000-foot Lone Peak mountain.

There are about 2,000 year-round residents in Big Sky, leaving the real estate market to rely on second-home buyers for the roughly 4,000 housing units entitled in the four resort areas,

It is a market that caters to all price ranges, from $275,000 condos to the baseline $5 million homes at the exclusive Yellowstone Club, which counts Microsoft(MSFT Quote) Chairman Bill Gates and Comcast(CMCSA Quote) Chief Operating Officer Stephen Burke among its residents.

While that crowd is less likely to be affected by crimped lending practices, there's no doubt caution has crept into the market.

The slowdown, said Hank Kashiwa, vice president of marketing at Yellowstone Club, "has affected everybody, but every time I say that, we have four or five members join in a month."

That's no small feat for a club where the cost of entry -- before the real estate purchase -- is $300,000.

"Ripple is a good word," he said, "in terms of how market bounces around. People want to know more about what they're getting now, they spend more time on due diligence."

Dean Genge, executive vice president at the nearby Spanish Peaks, where full club membership costs $85,000 and home prices range from $2.2 million "cabins" to $5 million single-family homes, echoed that sentiment.

While he, too, has see a slowdown from the heady period of about two years ago, Genge said it has been the speculators who have left the market, leaving qualified, serious buyers still making deals.

"There is more due diligence," he said. "For lack of a better term, there's been a flight to quality. Buyers are more thoroughly and cautiously evaluating, but lifestyle buyers are still there."

The slowdown is being felt at all levels of the market.

"Our market, from 1992 to 2006, was an expanding real estate market and we were knocking the cover off the ball," said Tim Cyr, owner of Big Sky Sotheby's Real Estate. "Since 2006, the guy who had been buying became a seller, and our inventories have increased."

While he still sees activity in the $3 million to $8 million range, albeit at reduced prices and a slower pace than earlier years, homes at less that $1.5 million "are rare to sell now."

Still, the lure of Big Sky, with large swaths of protected open space in a pristine Rocky Mountain setting, is expected to cushion the market from the steep declines in other regions.

"Buyers are funny," said Jeff Helms, a broker at Montana Real Estate Co., a firm that lists properties at the Moonlight Basin resort, as well as off the mountain. "I've been out here since the early '90s, and I always hear folks say, 'We missed Vail 25 years ago, Telluride 20 years ago, we're not missing Big Sky.' "

Moonlight, where single-family homes top out at about $5 million, has benefited from the interest in the market generated by the pricier Spanish Peaks and Yellowstone Club properties, he said.

The Big Sky real estate market also has been picking up because it's getting more accessible. The community, said Dax Schieffer, public relations manager for Big Sky Resort, "has been slightly off the beaten path," but he pointed out that access has gotten easier in recent years as the number of flights into Bozeman has increased.