Recap of the market:  Not all bad news here.

This Sunday’s San Francisco Chronicle Business Report led with the headline “Home Values Flatten Out; Decline seems to be ending in most Bay Area counties.”  The article goes on to identify that areas with robust employment and limited supply to have shown improvement while other areas continue to lag behind; a statement that could be true of nearly any community in America.  San Francisco and Santa Clara counties appear to be the best, and most obvious, examples of this premise with county tax rolls up .88% and 1.3% respectively.

San Francisco County Assessor Phil Ting offered the following optimistic quote, “Our residential market bottomed out last year and it is still on the road to recovery. We haven’t seen properties being restored to prior values yet but we will probably see that in the next year or two.”    

While the Truckee Tahoe market is subject to greater nuance being driven primarily by demand for second homes, the performance (and confidence) of real estate in our feeder market is critical to the stabilization of our values. Our region will typically lag trends in the greater Bay Area market by 6-12 months however any sense of confidence is likely to have a much faster permutation as we head into winter. With a little wind at our back, we have ample evidence of progress within our market to bolster the consumer’s enthusiasm.

In addition to the frequently discussed improvements in the works for both Northstar and Squaw Valley (by Vail Resorts and KSL respectively), the tangible signs of development at the high end of the market should serve to quiet doubts over the health of our local market. In addition to the prolific building ongoing at Martis Camp, vertical construction is well underway at the Home Run townhomes, easily the most visible project underway within the region.

Additionally, infrastructure at The Glades continues to progress at a rapid pace including installation of Ski Way.

Like the most robust zip codes in the Bay Area, stability in our market has begun with a series of high-profile deals at the high end of the market, while entry level communities continue to work through the waning supply of distressed inventory.

Sales of lakefront properties have spiked up in recent weeks in a manner typical of this time of year. Five waterfront properties have closed escrow in the past few weeks ranging from $2,900,000 - $6,450,000 with another newly pending sale at $3,290,000.

At Northstar, in addition to the recent closing of 2526 N. Summit Place at $3,200,000, four other marquee sales are now in escrow including:

·         1716 Grouse Ridge          $2,099,000 asking

·         266 Basque                         $1,495,000 asking             a great number for non-Big Springs property

·         2104 Eagle Feather          $1,849,000 asking             sold one year ago; a strong indicator of stability over past 12 months

·         #505 One Village Place   $1,475,000 asking             potentially the first whole ownership sale recorded in this property; will be a great comp for the Village at nearly $800 / foot asking

 

In the Martis Valley, a series of home sales are now in the works:

·         Lot #123 Martis Camp    $3,850,000 asking             scheduled to close within the next week

·         Lot #343 Lahontan           $1,975,000 asking

·         Lot #374 Lahontan           $3,095,000 asking            

·         Lot #69 Lahontan             $1,495,000 asking

In the vacant land market, a run of re-sale transactions at Martis Camp has provided some encouraging insight into that community. Two of the three sales newly pending are at asking prices above their current tax basis (original transaction numbers are not immediately available) with a third trading slightly below. This is a highly encouraging sign for long term demand.

Lahontan saw two land deals close and third show pending that are consistent with the market conditions recently explained in this report. Prices for these sales include $69,900, $75,000 and $128,000.

At Gray’s Crossing, new high and low benchmarks were established.  W22 closed escrow for $85,000, the second highest number realized at Gray’s Crossing in 2011. Conversely, three homesites were transacted in bulk for a cumulative of $77,000 with individual allocations of $21,000 for B-98 and $28,000 each for W-118 and W-119. W-60 and R-38 both found buyers within a week of hitting the market; one an REO, the other a short sale. Also at Gray’s Crossing, the first closing among the three recent sales within the Fairway Townhomes recorded at $695,000; full asking price.

With the passing of Labor Day comes our typical busy season for real estate as evidenced by the five-year cumulative transaction volume shown below. Most frequently, the window shoppers from summer get serious about purchasing real estate in anticipation of winter in order to solidify plans for the holidays. It is also a time when motivated sellers are often revealed via price reductions or willingness to negotiate when otherwise faced with waiting until the holidays to be exposed to a new set of buyers.

 The transactions detailed above certainly provide a solid foundation for the season-to-come.  Regardless, the next several months will provide us with considerable data as to the state of our market heading into winter. As always, you will be kept in the know as conditions evolve.