Daily when I talk with clients, they ask me what values are doing in Tahoe. My answer is always the same: I can’t make a sweeping generalization about the market in Tahoe, because there are many micro-markets that are all faring differently through these economic fluctuations.
Great Bear has continued to be a prime address in the Village at Northstar for a variety of reasons: limited inventory of 3 and 4 BR residences only, direct elevator access to the residence, spacious flow-through layouts (no hallways to enter like a hotel), high end finishes and appliances, private lobby with ski lockers, and a prime location-directly in the heart of the Village overlooking the ice skating rink. It really is very convenient.
What is happening with values here? I think they are trending up. But, if you look at the recent comps you will see why on paper the values at Great Bear may be hard to define.
There was a seller who owned 5 residences at Great Bear. All 5 were sold in a relatively short period of time at some of the lowest prices we have seen in Great Bear. There was a 4 BR/4.5 BA residence purchased from this seller for around $1.9M (furnished, turn-key), and there was a very similar residence purchased from this seller for $1.6M (furnished, turn-key). The main difference in these comps was time...the more expensive one sold first, the lower priced one sold later.
Reminder: Many of the residences in Great bear were originally purchased from the developer at the peak of the market for over $1,200 per square foot which for one of these 4 BR places would be about $3.3M.
Then, we had a hiatus where there was nothing at all on the market in Great Bear. We all had clients asking about condos there, but there were none to sell. The demand grew.
An REO (bank owned) 4 BR/4.5 BA popped up on the market at a list price of $1,349,900. Within 2 days there were 4-5 offers on the property and the listing agent wouldn’t take any more. Who wouldn’t be excited to get a condo at this prime address for that price? The bidding war was underway. The lucky winner closed recently on the condo for around $1.6M. This residence was not in great shape, it had been used a lot, needed carpet, paint, some appliances, light fixtures, drywall repair, etc...you would probably need to put in at least $250K to bring it up to par and get it furnished for a total consideration of $1,850,000. Was it a good deal? Maybe. But the turn-key deal last year for $1.6M was certainly better. So the distressed standard deal from the first seller ended up being better than the REO-bank deal which is opposite of what you would expect.
I just listed a fabulous 4 BR/4.5 BA luxury condo in Great Bear-#4201 for $2,199,000. Do I think it is worth it? Absolutely. It has barely been used, never rented, and is in immaculate “brand new” condition. At this price the seller is losing money on the sale. Is it priced higher than the recent sale comps? Yes, but this is not a distressed seller. It is a seller who is not using the property who isn't going to give it away. (Incidentally, the only other 4 BR option in Great Bear right now is a “pocket listing” by the owner who wants $2,728,000 for the property).
Supply and demand will ultimately determine the values in Great Bear, along with the end-goal of how the buyer wants to use the property. If a buyer wants to get into Great Bear this season, the prices are good. We may have seen the end of the distressed sales if the current sellers with listings on the market hold close to their pricing.
Will future buyers gauge value based on the distressed sale comps, the peak of the market comps, or somewhere in between? Each comp has a story as to why it sold, the timing of the sale, and what the motivation of the seller was. The bottom line is that any buyer will have to understand the full story for each comp and make a decision based on the big picture.
Real estate values are not easy to define anymore and I think that will be the challenging reality of the buyers market for a long time to come.
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