Posted by Tim Lampe Written by Steve Kegel

Never has sunshine been more welcome than in Tahoe over the past week. After a deluge of snow that has delivered 636 inches this season including 194” in March alone, and closed access to and from the region during some critical periods, the emergence of typical spring weather topping out in the mid-60’s has been more pleasant than ever.

Weather played a fascinating role in the real estate market through the 1st quarter of 2011. Demand surged with the tremendous snow coming out of the holidays only to be stymied by the lack of access throughout basically the entire second half of the quarter. Despite these obstacles, total sales were nearly identical at 235 vs. 247 the previous year. Median sales price was $403,000 vs. $435,000 Q1 2010; a decrease of 8% easily attributable, again, to the weather as sales focused on entry level opportunities for full-time residents versus the higher-end resort properties that were frequently unreachable to the consumer.

It does not require a big leap of faith to believe that restricted access cost the region at least the 12 deal difference from 2010, most of which would have happened in resort neighborhoods at a higher price leading to, at least, equivalent value and sales velocity – a very positive indicator for the market (under this transitive theory).

The flip side to this theory is that we are likely to see more inventory than “normal” given the arduous winter as some number of existing owners will attempt to sell rather than deal with another heavy winter and perhaps some deferred maintenance now due. This, along with ever present shadow inventory, could provide a nice equilibrium for the market as the pickings have otherwise been somewhat thin for a discerning buyer. The pace of inquiries this past (sunny and warm) weekend gave us a hint of how the winter could have been as well as a preview of a strong spring to come. A five year average shows sales typically lull at the beginning of the year only to pick up significantly towards the end of ski season and into spring, the slump again briefly around the 4th of July (like Christmas, a holiday with structured events and the beginning of window-shopping season), before surging to the highest numbers of the year in late Q3, early Q4.  The assumption of pent-up demand from the winter in addition to this normal trend would indicate a busy quarter ahead.

Some highlights of the quarter past and to come:

 

·         The strong velocity of sales at Gray’s Crossing continued from 2010 with four home sales and 8 land deals completed. Inventory in Gray’s Crossing remains almost nil with just six homes and eleven lots currently available.

·         Martis Camp continues to dominate the market with 26 new sales in 2011, 15 in March. This summer will be the first opportunity to see Martis Camp in full operation with the clubhouse set to open in July and an increasing number of homes completed and residents in place.

·         At Northstar, developer incentives on Northstar Lodge Hyatt have create a swarm of activity resulting in four total contracts and quite a bit of activity currently working. At current pace we may see sellout of that property in 2011.

·         With a commitment to build at the first eight (of sixteen total) residences, the Home Run Townhomes at Northstar will be the first project to come out of the ground in several years. The developer has introduced several pre-sale incentives to provide purchasers with the benefits of ownership during the construction process.

·         With new ownership in place, Timilick looks to move towards fulfilling the original promise of that community. Early word is that this will occur via construction of the clubhouse in 2011 while refining the master plan.

·         Perhaps validating of the theory espoused above, Tahoe Donner (often referred to in this report as the Regional Bellwether) saw an increase in median price from $475,000 in 2010 to $514,000; an 8% increase.

·         Of great personal excitement, we have the Amgen Tour of California coming through Northstar on May 15. This event, the largest cycling race in the US and among the top internationally, promises to bring great exposure to the region through visitation during an otherwise quiet time as well as a broad television audience.

I hope you are able to enjoy some spring skiing as we finish the season with tremendous conditions.  Best wishes for a happy and prosperous Q2

Tim Lampe and Steve Kegel.