Gold in them thar' mountain homes: nothing more serious than a slowdown predicted for mountain home values.

• Author: Titus, Stephen

Larry and Patti Green visited Telluride for the first time more than six years ago. Just a few years after their first visit, they purchased a ski-in, ski-out lot and started making plans for a custom-built log mansion that was intended to be as much of an investment as it was a second home. Even living 1,500 miles away in Indianapolis didn't scare them from the potentially fickle real estate market in a remote Colorado resort town.

"We evaluated several properties that we might use for an investment. My goal was to build a house that would meet the demand for a luxury home that fit the area, and amenities that would help with resale," Larry Green explained. "Not long after we decided to build, we found that most of the architects were booked for three years."

It seems that a few other wealthy investors looking for a second home (a.k.a. investment) were interested in Colorado's mountains. Unlike other real estate markets in Colorado, resort areas have their own rhythm and pace. Just 10 years ago, most resorts relied on one industry or company to maintain their allure, and a bad snow year or a change in ownership could radically affect the market. But since the mid-1990s, resort towns--particularly ski resorts--have become year-round recreational meccas. Along with wealthy part-timers in the market for multi-million dollar getaways, a full-time economy has blossomed and attracted a middle-class population that lives there year-round. These "locals" create a diverse tax base that is separate from tourism. Big retailers like Wal-Mart, Home Depot and others have taken notice and are moving into towns where not long ago, the grocery store was the biggest shop in town.

Harry Frampton, founder and managing partner of East West Partners and former president of the Vail Resort Association, the former owner of Vail ski resort, said it is impossible to discuss a nationwide real estate bubble and apply it to Colorado's resort communities or even the state as a whole.

"Real estate is so significant in our county and so broad, you can't talk about it in terms of just real estate," Frampton said from his Vail offices. "How can you compare a condo in Vail with an apartment in New York, with a single-family home in Arizona? Are there some places in the U.S. where prices are out of line? Sure, but it doesn't have a damn thing to do with what's going on in the Colorado mountains." Frampton added that there are several factors driving the resort real-estate...