Resort Real Estate: Does Supply Prevent Appreciation?

William Wheaton

Journal of Real Estate Research, 2005, vol. 27, issue 1, 1-16

Abstract: This paper examines the behavior of ski resort property in a major New England market over the last 25 years. A constructed property price series reveals that nominal prices are quite volatile and only slightly higher today than in 1980. These fluctuations and trends are investigated with a time series VAR model. The findings indicate that (1) natural snowfall is crucial to business; (2) regional annual business is central to individual resort demand and hence price appreciation; and (3) resort supply responds so elastically to any movement in prices, that it effectively curtails any long-term property appreciation. Impulse responses reveal that positive demand shocks fail to generate any long-term (real) price appreciation because of excessive new development. This behavior could be typical of many other ski resorts.

Date: 2005
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DOI: 10.1080/10835547.2005.12091149

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