As we head into spring many clients are curious as to what’s happening in the Northstar real estate market. Concurrently the first quarter of 2016 has circulated which makes for a perfect opportunity to dive into the numbers.
The overall sales at Northstar have experienced an elevated growth pattern in many different areas. The average sales price of a Northstar property exceeded $900,000, up 84% from the year ago quarter. Volume sold jumped 133% to $22,458,000. The number of transactions increased 26% with 24 closed transactions and 15 pending transactions.
Surprisingly, demand for luxury single-family homes lead the first quarter charge in Northstar. In previous years those properties were overshadowed by the new Mountainside condominiums/townhomes. But families seeking larger space and more privacy recognized great opportunities to accommodate their needs within Big Springs, as two legacy homes sold over $3M dollars.
I’ve broken down each section of the Northstar market to identify individual successes through Q1, 2016:
Northstar Single Family Homes
- $1,835,285 average sales price
- 206% average sales price increase over last years first quarter
- 7 transactions and total dollar volume of $12,847,000
The Village at Northstar
- $567,650 average sales price
- 55% average sales price increase
- 6 transactions and total dollar volume of $3,405,900
Mountainside at Northstar
- $1,575,000 average sales price
- 6% average sales price decrease
- 2 transactions and total dollar volume of $3,150,000
- 5 additional contracts were signed this ski season Mountainside is projected to close another $13 Million dollars in the next 30 days.
- $339,455 average sales price
- 13% average sales price decrease
- 9 transactions and total dollar volume of $3,055,100
Sales should remain strong this year as many great opportunities present themselves and here are four key factors that I see could influence the trajectory of home prices in Northstar moving forward: 1) snow conditions; 2) Interest rates relative to fair value; 3) Supply to demand balance; 4) Income creation in feeder markets.
- Snow conditions:
After a series of disappointing ski seasons, our region was in desperate need of precipitation. With over 400 inches of snow, the lakes and rivers have been propelled into recovery. And local real estate has returned to “normalize” conditions that include sales momentum here at Northstar.
- Interest rates:
I think interest rates are below the “fair” rate based on growth in the economy. This provides additional stimulus to housing, offsetting the hit to affordability from rising prices. The NAR affordability index is a good way to show these cross currents. Despite rising home prices, the index has been essentially moving sideways at late-2013 levels.
- Supply and Demand balance:
The single-family home and vintage condo inventory has perfect supply and demand balance at around 5 to 8 months supply. The village inventory is running at a much higher rate benefiting buyers. But recent snow activity has greatly helped this segment towards balance and recovery. I see continued sales growth in this sector throughout the year based on attractive pricing and anticipation of next years ski season. Mountainside months supply inventory is high from an overall perspective, but new developments e.g. Stellar is maintaining balanced supply and demand by phased inventory releases.
- Income creation:
Our most influential factor for home sales comes from our bay area feeder markets. As job growth has continued on the upside, buyers will continue to find ways to invest in their lifestyle choices in the area. Demographics today are shifting. Homes and condos, and home sites are being sold to younger families who seek a balance of convenience, luxury, and relaxation. Northstar is one of the premier destination resorts in our region to offer such suitability.
With the summer approaching, Lake Tahoe will be reinvigorated with the energy of consumers enjoying warm weather adventures. We expect to see significant activity as consumers seek to find the perfect mountain retreat for their families. In the coming months, we’ll also keep you up to date on the exciting updates on the new Mountainside at Northstar happenings such as the Rendezvous Experience and the expanded Mountainside trail system.