2017 Schaffer’s Mill Mid-Year ReportMike Montalbano, July 15, 2017 in Market Update, Real Estate, Real Estate Trends, Schaffer's Mill, TMR, Tahoe-Truckee
Through the first 2 quarters in 2017, Schaffer’s Mill has witnessed 3 single family homes transacting. Median sales price was 3% less than the same period a year ago, at $1.4M. Another 3 Mountain Lodges traded, down from the 8 the previous period last year. This is right in line with the North Lake Tahoe dip in sales volume resulting from the gargantuan winter and inability to access the area. Conversely, year-to-date 2017 median sales pricing outperformed that of 2016, by nearly 7%.
“Historical trends continue to indicate an increased demand for brand new construction properties.”
Year-to-date, the highest priced property trading topped out at $1.825M. This property experienced a 15% delta from the original asking price after spending a staggering 567 DOM. While this dip may signal a drop in value, more significance can be derived from its impact to overall absorption. Active single family homes at Schaffer’s Mill are still scarce, with no more than 5 homes active at any given time dating back to the inaugural shovel hitting the ground.
Historical trends continue to indicate an increased demand for brand new construction properties. With increased labor costs, more than 30% over the past year, speculative building is at an under-supplied level. The ideal ratio for construction within a community is a 50/50 equilibrium, with 50% spec building & 50% end user. Historically, the spec building in Schaffer’s Mill has represented closer to 20% of all active building.
Given the lack of supply and continued consumer thirst, high quality craftsmen-built homes are and will be highly sought after. As original owners outgrow their properties and enter the secondary market, a sales cycle mirroring area trends at about the 6-7 year period, “new” properties are anticipated to enter the market place. With demand likely outpacing supply a rapid absorption should continue. Look for the single family resale segment to lead all others, not withstanding the Schaffer’s Mill bellwether… homesite sales.
The release of the premium Summit homesites along the Alpine Ridge was well received. Since the holiday release of these 19 sites, 8 have been selected. Prices start at $477K and reach the $635M range. The homesite activity via end user acquisition is expected to continuing driving momentum. Anticipating the spec builder pro forma North Tahoe trends inform about land values. At around 10% of a new homes’ value the residual land value is not sufficient to entice spec building within Schaffer’s Mill, especially considering the Summit release pricing.
In the second half of 2017 while spec home opportunities will remain limited the community will likely see an uptick in its emerging secondary home market. Traditionally, Schaffer’s Mill single family homes tend to languish on the market, with average Days on Market nearing 210 days. This is not an indicator of market conditions nor a stagnant community, rather a construct of overpricing. The savvy owner will look to bring their property to market at or just above fair market value and likely experience immediate interest. Aggressive pricing and selling strategy will ultimately impact total sales volume and median pricing for 2017.
Photo courtesy of Schaffer’s Mill Sales