Market News

Why People Buy or Not
Part 2 of 4
 
We talk to potential Crested Butte real estate buyers almost every day and see some patterns in how people view the possibility of owning a home in the mountains.  Here is the second installment of a series of articles on why people buy or not…
 
“What Determines Value?” 
 
In hard business terms, value is the worth of an asset or liability in an arms-length transaction between unrelated willing and knowledgeable parties.  This definition gets at the rational part of the buying decision that weighs the cost of something against the price being paid, but it does not fully capture the other factors that come into play when looking at a purchase such as a mountain home in a destination community.
 
In these cases, value is more personal.  It includes a mix of all the memories and associations with the place and the future expected experiences and family traditions that come with a place to call your own.  Related to this, value is an internal comparison of how easy it is to gain access to similar experiences through different means.  The challenge becomes looking at the realities of today to determine the possibilities for tomorrow.
 
Next, the value determination is a factor of what you think other people are willing to pay for similar experiences. Other peoples’ current and future intentions can be hard to wrap your arms around, so most will look to the economy on the whole and to the activity within the local real estate market for an indicator of what others might do. Again, this is very focused on what is happening today and it underestimates the prospects of tomorrow.
 
Right now with so much flux in the economy, many people work through the value equation making assumptions based on their current perspective that leads to a final decision that will last for years.  Besides the obvious fact that prices are so low, people who see value in today’s market realize there is only one Crested Butte.  As the world changes and grows, the desire for people to get away from busy lives and come to their place in the mountains to reconnect with what matters most will only grow stronger.
 
In the next issue:
"Your Personal Timing is Right"