March, 2017 Tahoe-Truckee Market UpdateTMR Team, March 2, 2017 in Market Update, Real Estate, Record Breaking Snowfall, Tahoe, Truckee
Images of 30 foot snowbanks and charts showing near-record breaking snowfall have been plentiful in 2017. Less obvious are the near and long term economic impacts. It is both obvious and correct to assume that snowfall creates demand for mountain, and specifically, ski properties, however the volume with which snow has fallen this year has disrupted the normal rhythm of the Tahoe-Truckee real estate market.
A typical winter will see a gradual progression of transactions at the start of the calendar year surging upward toward the end of February and continuing through the traditional end of ski season in mid-April. With the record snowfall, Northstar, Squaw Valley and Alpine Meadows have already committed to extended lift operations that will keep consumers in the marketplace longer than typical. This will likely prolong the spring selling season into a smooth transition with summer visitation.
Travel restrictions, power outages, and managing copious amounts of snow delayed the shopping process for many consumers through January resulting in somewhat lackluster closings in February. Nevertheless, lagging sales should not be taken as a negative indicator of market demand. Rather, environmental conditions including prolific volumes of snow have deferred much of the transaction activity until further into the winter and spring.
While the overall volume of transactions was limited, the composition of these sales provides insight into the overall demand for Tahoe real estate. Of the 69 sales, 15 were in the “luxury” category (over $1,000,000) representing 21% of all sales. This number exceeds the 18% for luxury sales in all of 2016 and a major premium over the 14% in 2015.
Further, of the luxury sales, all but 2 were found in resort communities at or surrounding Northstar. The various communities within Northstar saw 10 transactions including a strong surge of activity at Northstar Mountainside as consumers recognized the value in slopeside living. Even within the resort, volume was compromised by the conditions detailed above however premium real estate became even more valuable for those who made purchasing decisions.
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Further economic benefit from the amazing snowfall of 2017 will be realized as the year progresses. In addition to the obvious surge in demand for skier visit which begets revenue from lodging, food and beverage and other tangential services, summer activity will be similarly enhanced by full water supplies. Whether lake and river recreation, reduced water restrictions or minimized fire risk, the region promises to have a look of full health for the remainder of 2017.