January, 2015 Tahoe-Truckee Market Update

Tahoe-Truckee Market Update

January, 2015

2015 has begun on a positive note for the Tahoe-Truckee real estate market.  January saw 69 transactions at an average price of $921,741. Both of these figures are positive indicators with independent backstories. 

January is historically the lowest month of any year for closed transactions. Because sales typically track 30 - 60 days out, January sales begin in December, the start of the holiday season, when families are ultra busy and not focused on buying real estate.  The chart below demonstrates clearly how  sales at the beginning of the year often lag later months by 50% of more. Over the past decade we've seen the first month of the year produce as few as 36 (2009) transactions and as many as 83 (2013).  The production of 69 sales this past January exceeds the 10-year average by 26%. Perhaps more importantly,  this year exceeded January 2014 by 10% — a month that preceded a stellar year. 

Unlike the total number of sales, average price in the first month of the year is less predictable. Historically,  January sales average out in the exact middle between peak (February) and valley (October). In 2014, January's average sale price of $821,430 was a near exact prediction of average price for the entire year. With an average price of $921,741, January  2015 shines an optimistic light on the year to come. Further validating this theory is the high number of luxury sales in the month: 12 were at values of $1,000,000; 7 at $2,000,000 or more and 2 exceeded $5,000,000. These figures perpetuate the theme of 2014 in which luxury resort real estate outperformed all other classes. 

At $921,741, the average sale price continues a trend of steady improvement going back three full years. 

It will be fascinating to watch these trends as winter plays out. Opposing forces are waging conflict as market demand is surging while winter conditions struggle, a scenario that has deferred purchasing decisions into the summer in past years. Given the expressions of interest thus far in 2015, particularly around the new and innovative Stellar Collection at Northstar, it appears that demand will win out. 

We've experienced an extended run of nearly perfect spring weather through most of January and into early February. Cold temperatures in the evening have provided Northstar with optimal conditions for making snow resulting in flawless groomed runs across the mountain. We hope that you take advantage of spring snow during winter so that you are well-prepared for winter snow when it arrives in spring. 

Katie Tyler

Realtor®

BRE 01442453

c 530 277 1012 

Tahoe-Truckee Market Summary - 2014

2014 Tahoe-Truckee Market Summary

The adage “quality over quantity” best sums-up the Tahoe-Truckee real estate market for 2014. With soaring economic conditions in the San Francisco Bay Area, more and more families made their way to Lake Tahoe to spend quality time together. This demand for home ownership led to a second straight year of over $1 billion in sales -- the first time since 2004-2005.

Following an exceptionally robust 2013, quality inventory was at a premium heading into 2014.  Despite fewer overall sales, the region’s dollar volume grew by over $100 million, indicative of a higher number of transactions for the market’s top tier properties. Average price grew by 18% in 2014 buoyed by 249 transactions at prices greater than $1 million. 

Three communities in particular set the tone for the surging luxury market in 2014.

Tahoe Lakefronts, the gold standard for Tahoe real estate, outperformed all other classes over the past year with $130 million traded over 34 properties – the highest level in nearly a decade.

Martis Camp, elevating Tahoe resort property for nearly a decade now, has only 80 homesites left so the focus shifted to the sale of custom homes. 2014 saw 36 residences sold in this community at an average price of $3,700,000 -- a figure nearly identical to lakefront sales.

Finally, as Vail Resorts continues to distinguish itself as the world’s elite resort operator, the prestige of Northstar has risen to new levels. Accordingly, the opportunity to live on the Mountain has become its own calling card.  Mountainside Northstar, the community anchored by The Ritz-Carlton; Lake Tahoe, has established an identity as the premiere on-mountain living experience on the West Coast. In 2014, Mountainside experienced over $40,000,000 in transactions ranging from estate land to premiere ski-in / ski-out residences.

Looking ahead to 2015, all indications are that this robust market will continue. With inventory remaining at a balanced 6-month supply and stable economic conditions Tahoe appears poised for another year of growth.  As Martis Camp and The Ritz-Carlton Residences near sellout, Mountainside Northstar, Lahontan, Gray’s Crossing and Old Greenwood stand to benefit as the recipients of attention from well-qualified consumers.

At Tahoe Mountain Realty, we look forward to helping you making your Tahoe dream a reality in 2015.

Katie Tyler

Realtor®

BRE 01442453

c 530 277 1012 

Tahoe-Truckee Regional Market Summary Q1 2014

Tahoe-Truckee Regional Market Summary Q1 2014

The 1^st Quarter of 2014 has been a study of contrasts for the Tahoe -Truckee Region as the impacts of a sub-par winter battle with increasing demand and plunging inventory for real estate.

The total number of transactions through the first three months of the year has dipped 25%  from the same period in 2013; a figure roughly proportionate to the drop in skier visits through the first half of the season. Average price, however, has surged by nearly 29% from $694,264 to $901,111.

The luxury real estate segment has lead the way with two lakefront transactions greater than $10,000,000 and 42 total sales greater than $1,000,000. Knowing that luxury sales generally gain momentum throughout the calendar year, this represents an excellent first quarter.

Resort Market Summary

Northstar has followed market trend with just 22 closed residential transactions year-to-date. Like the larger segment, luxury sales have driven average prices up by 49%.  Five sales at prices greater than $1,000,000 including 4 Ritz-Carlton Residences, 3 Big Springs Homes and 1 Vintage Northstar property have buoyed sales. Another four luxury properties are pending sale including three Home Run Residences set to close in April.

The closing of Homesite #19 at Martis 25 found Mountainside at Northstar for $1,645,000 is the largest land sale recorded in the region thus far in 2014.

An interesting comparison can be drawn to 2012, a year with a similarly dry winter impacting real estate sales. In the first quarter of that year, just 17 sales were transacted.  As guests returned to the region for summer, a larger than normal number of sales occurred in the latter part of the year rendering the Q1 number just 18% of total sales for the resort.

In comparison during the winter of 2013, which started off with a significantly better snowpack, 27 Q1 sales were 27% of the annual total. 

Other resort communities have seen similar market dynamics with 14 improved residential properties closed between Old Greenwood, Gray’s Crossing, Lahontan, Martis Camp and Schaffer’s Mill. While each of these communities has individual market dynamics, when viewed together they show stability of price and volume in comparison to a year ago. However, ten sales are pending throughout these communities at asking prices 13% higher than those already closed this year.

  

Vacant Land

As prices throughout the region continue to rise, construction activity has increased dramatically.  This has had a corresponding impact on demand for vacant land throughout the region. While closed transactions have decreased by 12%, median price has leapt by 57% from $83,000 to $130,000. The communities that experienced the most dramatic depreciation in the downturn have seen the greatest improvement. Gray’s Crossing has traded 93 homesites since January, 2013.  Year-to-date the average selling price has more than doubled from the same period last year. Also noteworthy is the range of sales, up from $21,500 - $89,000 to $59,900 - $192,500.

Similarly, Lahontan has 65 sales since January 2013 with prices leaping 125% since Q1, 2013. The range of sales for that community has increased from $50,000 - $150,000 to $95,000 - $275,000.

Both communities expect to have 30 or more homes begin construction in 2014.

Demand for homesites at the highest price points has increased as well. As mentioned previously, the highest land sale for the region in 2014 was a rare ski-in/ski-out homesite in Martis 25. Martis Camp continues on a strong trajectory with 33 homesites either sold or reserved.

Market Recovery

The resurgence of the Tahoe – Truckee Real Estate market over the past two years has gone a long way toward recapturing the values lost in the downturn. The market has improved 28% from the 2011 trough (through 2013), and 42% through Q1, 2014. These figures are now 12% off the market’s peak in 2006.

Summary

Despite a challenging winter, the market appears to be headed in the right direction. The combination of strong demand and limited inventory should combine to drive values even higher. As we wrap up winter and look toward summer, the visitation cycle will begin again. Based upon previous cycles, the velocity of transactions will likely pick up throughout the year; assuming there is available supply to be bought.

We look forward to sharing these insights with you as the year unfolds. Best wishes for spring.

Katie Tyler

Realtor®

BRE 01442453

c 530 277 1012