Ski Area Supply vs. Demand
In my last Blog post I stated we are starting to see that the real estate market is showing signs of leveling based off of a Price Comparison. There is still great potential for the prices to drop in most markets over the next year, but there are pockets/neighborhoods within the Lake Tahoe market that may be arriving at bottom sooner than others. Most of these are the markets directly surrounding the ski resorts. I believe these Exclusive Markets (defined as an area with limited home sites because of the desirability or other environmental factors which prevent endless development and sprawl) have what it takes to offer the luxury and adventurous buyer a lifestyle purchase. Because of this lack of supply, many of the buyers are stating their price they want to pay and getting in now before it is too late.
In all three of the market comparison below, the Road to Recovery is well under way and here’s why. In all 3 Ski Destinations the supply is down an average of 48.9% from 2008. While we see an increase in demand equal or greater to that of the last quarter of 2007. An increase in demand coupled with less supply means that shortly the sellers in this area (if they are priced in market) will start to see an asking price equal to sale price. In Alpine, we are already seeing this. Of course there would be the occasional overly motivated seller or a property which will compete with distressed properties. What I have witnessed in each of these markets (because of their luxury pricing or lack of first time buyers) is a majority of the buyers have purchased with low LTV’s or mostly cash. This has created greater stability with less volatility; which “in theory” should allow a faster recovery and leveling in the market. This combined with the fact that the subdivisions are mostly built out, the good properties haven’t been put on the market, is creating a demand even for the Fixers and properties on good lots with great views.
See the Graphs below:
Northstar Single Family Residence Median price of For Sale, Under Contact, and Sold Properties (There are 653 SFR, 29 lots, and 817 Condos according to First American Title Company).
Alpine Meadows Single Family Residence Median price of For Sale, Under Contact, and Sold Properties (448 SFR, 192 lots and 129 condos according to First American Title Company).
Squaw Valley Single Family Residence Median price of For Sale, Under Contact, and Sold Properties (540 SFR, 68 Lots and 968 Condos according to First American Title Company)
Complete recovery may be a year or two away, but interest rates are low, and asking price is not equaling sale price as of yet. So create next year’s price today, capture a low interest rate, and make your dream of Ski Area home happen today. Stay tuned next week . . . “Today is a good day to sell, and a great day to Buy” – where we explore the top 5 reasons to sell and the top 5 reasons to buy. For questions and comments contact us at [email protected] or “LIKE” our face book page.
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Filed under: Lake Tahoe Real Estate
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