All Real Estate Is Local

This week-end, I attended the 70th birthday of a beloved cousin who lives in Lyme, New Hampshire. She and her four siblings are like a second family for me, and although they grew up in New York (in an oft traded and now disastrously renovated 25 foot townhouse off Fifth in the 90s) they have scattered to rural areas all over the country: the Owens Valley in southeastern California, southern Vermont, Idaho, Aspen, and New Hampshire. Each of these locations has its real estate peculiarities, and since several of them either have recently moved or are moving shortly, there was a lot of talk about home and land values. The conversation reminded me again not only of the eternal three “L”s of real estate (location, location, and location) but also of how differently the notion of location resonates for different reasons in different parts of the country.

In the Owens Valley, it is all about water. Decades ago, all the water in that area was siphoned off and sent by aqueduct to supply the burgeoning city of Los Angeles. My cousin owns a one acre lot there with a small house, but it is part of a forty acre area which retained water rights. So it is an oasis of green, with lawns and fruit trees growing in stark contrast to the high desert all around it. The land in this small enclave thus sells for several hundred thousand dollars per acre, far more than the neighbors get (to the degree that there are neighbors.)

Water, and access to it, was also the determining factor in the recent sale of another cousin’s 2,200 acre ranch in Idaho. She and her husband raised beef cattle and goats, and grew alfalfa and hay for feed. For them, the value of their property was largely about irrigation. The land with irrigation pivots (which fortunately for them is most of their property) sells for about $1,500 per acre, while land without pivots sells for $500, although it is hard to be specific since real estate transactions are NOT public record in Idaho. The house is, for all practical purposes, irrelevant. She and her husband, who have run the ranch for 20 years now, are glad to be out of this 24 hour a day, seven day a week job for numerous reasons, not the least of which being because conflict about riparian rights and access to irrigation water made the meetings of residents of their valley more contentious than Community Board discussions on the Upper West Side!

The 70th birthday girl is in the process of selling her big house with over 100 acres on the Connecticut River and buying a smaller house on around 10 acres further up the hill. We had a little contest (not including her, of course) in which we all guessed what the cost of the new house was. I was the closest, although even I was a little too low (and I came in at almost twice some of the other guesses.) In this case, value is all about the town’s proximity to Hanover, where the booming industry that is Dartmouth College drives the economy. Twenty miles further away from the college and the value profile would be completely different.

And finally there is my Aspen cousin. A former member of the ski patrol, she bought her modest “Aspen Swiss” on a double lot in the early 1970s when Aspen was a still a small town. Now of course, she is sitting on a gold mine. That double lot is worth millions as Aspen has transformed into the international billionaire playground it is today.

So I could probably more or less trade my lovely 7 room apartment on Central Park West for a 2,200 acre ranch in Idaho, an acre or two with a modest house in Aspen, several hundred acres on the Connecticut River in Lyme, or 8 or 10 verdant acres in the desert at the foot of the Sierras in southeaster California. It’s all relative!