Looking at the real estate performance of the Tahoe – Truckee region as a whole during the 1st Quarter for 2013, every significant statistical measure shows improvement over the same period last year (and beyond in many cases).
Total sales units improved 11% from Q1 2012 at 294. This number represents the highest first quarter total in eight years and it more than doubles the number experienced in the worst of the market (just 127 sales in Q1, 2009). Furthermore, this number may be somewhat restrained by the lack of inventory available in many communities. Median price has climbed 16% over the same time last year and, in fact, 4% over the same period in 2011 marking a strong comeback for values throughout the region.
Average price has shown the most significant statistical jump of 19%, indicative of the recovery in the luxury segments of the market. To further quantify this point, 42 sales transacted at $1,000,000 and greater; exactly twice the number for Q1, 2011. Of these, 14 were above $2,000,000; nearly 3x greater than the 5 in 2011.
These luxury sales breakdown by community as follows:
12 Tahoe Lakeside (continuing the remarkable 4th quarter surge in lakefront activity)
10 Martis Camp
3 Squaw Valley
2 Tahoe Donner
Of the 10 sales above $1,000,000 at Northstar:
2 Village condos
4 Single-Family Residences
4 Mountainside Residences
Focusing on our core markets, snow conditions once again factored into the performance of the real estate market. Almost identical to last year, there was a run on entry-level resort condos including 14 sales among Indian Hills, Gold Bend Aspen Grove and Ski Trails. Unlike last winter, the luxury side of Northstar found traction with a 21% increase in average price compared to the first quarter last year. Six single-family homes traded at a median price of $1,285,250 more than double the 2012 median of $600,000. Three of these sales where in Big Springs at an average of $2,250,000 while the other three in Vintage Northstar topped $1,000,000 on average for the first time since 2008. Most significantly, the market discovered Northstar Mountainside and the value inherent in slopeside living. Five total sales at $1,750,000 will be the tip of the iceberg as momentum continues through Home Run, Martis 25, Ritz Carlton Residences and Constellation with numerous sales currently pending within each.
Momentum at Martis Camp continues to compound with a reported 51 homesite sales in the first quarter. Moreover, as more homes continue to be completed, sales of improved properties have leapt to 10 topping the number for any entire year in the short history of that community. Similarly, Lahontan continues to find its groove with six homes and 10 lot sales in the first quarter (with another 9 currently pending). While some cleanup remains, Lahontan has shown a trend towards more luxury (and less value-based) sales of both homes and land, consistent with the overall market.
Like Lahontan, land sales at Gray’s Crossing have made a significant leap from discount and distress to the recognition of some premium for quality mountain/golf setting. The LDK portfolio of 81 homesites was recently re-introduced at Gray’s Crossing presenting a number of previously unavailable golf course homesites accompanied by a refreshed marketing effort. 21 homesites have sold or are pending sale already in 2013 at Gray’s Crossing where the average price has leapt 51% to $53,388. With extremely limited inventory, just one residential sale occurred at Gray’s Crossing, a Fairway Townhome at $665,000.
Also similar to Lahontan, Old Greenwood has shed much of the discount mentality with a premium sale of $2,100,000 balanced by a short sale at $820,000. Like Gray’s Crossing, a new owner of the remaining fractional inventory at Old Greenwood is pumping new energy into the community via an exciting marketing plan, including a promotion with PGA WEST in La Quinta, CA, introduced just this week.
What’s ahead for Q2 and beyond?
With significant demand for real estate in Lake Tahoe clearly in existence the only obstacle to soaring results in 2013 is a lack of available inventory. 563 total listings equals 5.75 months of supply; a slight imbalance in the favor of sellers. Specific communities, however, have few options including Lahontan with just four homes currently listed, Gray’s Crossing with two, and Old Greenwood with three. More significantly, 214 sales currently pending bode well for strong results in April and May. Beyond statistics, it is apparent that the luxury 2nd home buyer has had a renewal of confidence in the Lake Tahoe market that will lead to an overwhelming improvement over the last several years. The introduction of Northstar Mountainside Residences will continue to define a new concept in resort real estate with new and unique offerings. As has been discussed in this space before, the nature of consumer inquiries have evolved away from distress and deal making to now seeking an optimal fit in a quality property. As this has evolved, the buying window has grown shorter and shorter leading to a more fluid sales process. Most significantly, it is once again OK to buy in Tahoe.