While there is no doubt that some degree of the paralysis experienced in our market over recent months was fear of the exact events taking place at this moment, there remain indicators of demand for our region, particularly in the highest reaches of the market. Given the discounting that has already occurred in real estate over the past five years without an inflated recovery, this segment may appear more stable than other, more volatile, investments. Layering in the intangible value of ownership in the mountains and the family benefits consistent with the values of our clientele, we hope to create a compelling story for Tahoe real estate. Bolstered by the tens of millions of dollars being spent this summer on infrastructure at Northstar by Vail Resorts and Squaw Valley by KSL as well as the Clubhouse at Martis Camp and new development from East West Partners at Northstar, all familiar themes in this report, Tahoe real estate seems as strong a bet as any.

To say that there won’t be any negative impact on our region would be naïve.  The past half-decade has shown us that second homes are very much a luxury and one that can be sacrificed in times of belt-tightening.  Recent history has proven that entry and mid-level second homes purchases, typically those more likely to be a stretch for the owner and thus most dependent on financing, are the most vulnerable. These have created a class of distress sales that had abated somewhat in recent months but continue to have significant impact on certain price points within the regional market.

The segments of our market that are likely to be most productive will be those of the highest quality in either limited supply or highly-unique setting. I look for Martis Camp to continue to flourish along with the highly unique opportunities presented at Northstar at Home Run and The Glades in addition to the very few opportunities on the secondary market at Trailside, Village Walk and other areas.

Evidence of this can be found in the pre-sale of Unit #5 at Home Run Townhomes at an asking price of $2,345,000 as well as the second major home at Martis Camp in as many weeks, Lot #418, for $3,850,000.

Of course significant discounting in other projects will present unique buying opportunities, particularly where quality is also plainly obvious i.e. Northstar Lodge Hyatt and other resort opportunities. Case in point, #4407 in Great Bear Lodge was brought to market post-foreclosure late last week at $1,349,000; over 55% off peak value. At last report it had received four offers with several others showing interest. My prediction is that this property ultimately sells for at least $100,000 above asking price. Similarly, the home on Lot #59 at Lahontan closed for $1,665,000; a price likely 30% less than its peak value within this fine community. Similarly, 1937 Gray Wolf in Big Springs at Northstar, closed escrow for $1,295,000; a remarkably good buy for this side of the resort community.

In keeping with seasonal trends, the majority of recent activity has been focused around “entry” level ($400,000 - $600,000) properties in the Tahoe Basin in addition to consistent activity within the same range in Tahoe Donner. All other factors being equal (a big “if” – noted), this activity will shift back towards the ski resorts in another month once schools are back in session and the mindset of our consumer shifts towards holiday and winter plans.

Gray’s Crossing continues to show strong activity with the third sale of a Village Townhome in as many weeks.  The velocity for this product can be attributed to a great combination of quality and scarcity with very few built homes available at Gray’s Crossing after major cleanups in 2010 and early 2011. Similarly, six homesites are pending sale within the past few weeks including a trio with but three days on market.

The next several weeks will no doubt be fascinating. I will do my best to report the impact on our market and keep you updated of notable sales and trends.