Population Demographics:   One out of every four Americans hail from the Baby Boom generation, and these 78 million citizens are spending more and more of their financial resources on travel, leisure, recreation and vacation home ownership. This is all part of their continual quest for an enhanced lifestyle and more family-centered activities. A survey by American Demographic magazine of 25,000 households with incomes in excess of $200,000 indicated that vacation homes are the top desired asset for the wealthiest households in the nation.

Socio Economic Profile:   The National Association of REALTORS® studied the most expensive resorts in the US and discovered that "price elasticity characteristics" allowed world-class destination resorts to outpace the national average rate of appreciation by a factor of 2:1. Breckenridge real estate represents the type of highly ammenitized community that which is actively sought after by the most affluent buyers looking to satisfy their thirst for recreation.

The Breckenridge Real Estate Renaissance:   One of the primary criticisms of the ski industry has been its aging infrastructure. The deterioration of certain elements — some of which are approaching 50 years in age — has become a major issue. The best locations often times have the oldest and most obsolete structures. Affluent customers are interested in newer and more attractive buildings, not often found in the industry.

Fortunately, when it comes to both redeveloping and modernizing base core villages, Vail Resorts in tandem with other private developers is in the process of spending more than one billion dollars ($1,000,000,000) at the base of Peaks 7 and 8 leading the way in the Breckenridge renaissance. When contrasted against existing inventory, the effects of these capital investments in Summit County real estate represent a significant amount of property creation in addition to having long-term value-added implications.

Vail Resorts:   Vail Resorts is the undisputed industry leader when it comes to both resort real estate development and ski mountain operations. Currently, the company operates Vail, Breckenridge, Beaver Creek, Keystone, Heavenly Valley, and Northstar-at-Tahoe. Vail Resorts proven success formula of stripping market share from competitors by way of heavy capital expenditures on their products, goods and services has worked hand in hand with the industry's maturity and tendency towards consolidation. Most ski towns depend upon the ski mountain itself to be the primary economic driver in their community, and Breckenridge real estate is no exception. This means that the success or failure of the ski company has important implications.

A well-managed corporation that combines a reliable high quality ski experience with a responsive support structure and vibrant spirit can increase demand and prosperity for an entire community. On the other hand, a ski company which negatively impacts demand, as in the recent case of the American Ski Company in Steamboat Springs when 1,100 employees were laid off, can have dire effects on a town; when, property values dropped by as much as 13% due to curtailed mountain operations. The recognized financial strength of Vail Resorts, combined with their industry dominance gives every indication that their success in the competitive, consolidating and maturing ski resort business will continue for many years to come.

Capital Projects:   In December 2006, Vail Resorts announced their newest on-mountain ski village: The Peaks at Breckenridge. The village will include 500 slope-side condominiums with an estimated market value of one billion dollars ($1,000,000,000). In order to guarantee the project's beach front status, a new $12m gondola is now operational connecting the base areas of Peaks 7 and 8 with town parking lots, in combination with a realignment of the Independence Super Chairlift.

The estimated sales cycle for this massive undertaking is another seven years at an average pro forma price point greater than $1000 per square foot (psf). The Shock Hill Lodge is a project that has also taken advantage of the new "town to base area gondola" offering 110 super high-end condominiums in what was formerly a remote backcountry area, overlooking Cucumber Gulch and the ski area. Asking prices are $1200+ psf, another record setting jump for "best of the best" slope accessible living in the realm of Breckenridge real estate.

Pricing:   The leading edge price indicators are up by more than 50% based upon the Peaks and Shock Hill new release projects. We predict these projects will "pull price" the existing stock of Breckenridge real estate inventory from its current $550 per square foot average, ensuring a continuance of the 20 year historical compounded average growth rate (CAGR). Our rationale for this prediction is based on data analysis where existing property is priced at roughly 75% of new construction offerings.

For the Colorado mountain lifestyle enthusiast, the generally recognized world class resort communities of Aspen and Vail/Beaver Creek are now out of reach financially for most of the vacation home buyer market. Breckenridge ski proximate real estate is attractive and reasonably priced compared to Aspen at $2000 psf, Vail at $1500 psf and Beaver Creek and Bachelor Gulch at $700 and $800 psf respectively.

Appreciation:   The compounded average growth rate (CAGR) for Central Breckenridge real estate since 1991 has been 6.36% for properties priced less than $2.5m, two bedrooms minimum. 2004, 2005 and 2006 price increases drove CAGR to over 8% due to investment exuberance and new ski village offerings. Since 1st quarter 2008 the market has experienced a profound loss of volume (43%) when compared to the high water mark 2006/7 years resulting in an estimated 10% loss of value with another 10% likely.

Breckenridge slope-side adjacent properties offer the best upside potential. The value added efforts of Vail Resorts and diverted buyer demand from the now unaffordable ski village areas of Eagle County should either ensure a continuance of Summit County real estate's historical rate of appreciation.