Social media millionaires making splash at Lake Tahoe |

Social media millionaires making splash at Lake Tahoe

Rob Sabo
This home at 4762 North Lake Blvd. in Carnelian Bay was sold Aug. 29 for $3.63 million, after only 14 days on the market.
Courtesy Tahoe Luxury Properties |

INCLINE VILLAGE, Nev. — Silicon Valley’s newest crop of social-media millionaires are finding safe haven for their fortunes — and their families — at Lake Tahoe.

Sales of high-end real estate at Incline Village and Crystal Bay rose 216 percent in the past two years, a trend that’s expected to slow a bit as inventory of luxury properties tightens.

But interest from Californians in owing lakefront property at Lake Tahoe or moving their wealth from neighboring California in Nevada trusts to escape the Golden State’s onerous tax structure remains strong.

Bill Dietz, president of real estate for Tahoe Luxury Properties with offices in Incline Village and Tahoe City, says Lake Tahoe has long been a playground for wealthy residents of the Bay Area, but more and more of the newly rich in Silicon Valley are moving or purchasing second homes in the area.

“You can run the whole house from an iPad. You can turn on the house from your car, and it’s warm when you get there.”
Pam Aaron
owner, Sierra Verde Interior Design

“The tax climate in California has attracted Californians to Nevada,” Dietz says. “When Californians look at where they might want to move in Nevada, Lake Tahoe is a likely place. High net worth individuals can see a decrease in state income tax to the tune of 13 percent; that’s a very compelling reason to move to Nevada. A lot of people, what they are buying will be paid for by in tax savings in a few short years.”

Real estate — vacation properties, rentals and second homes — is a primary economic driver for the majority of Lake Tahoe, Dietz says. And the increased mobility of today’s workforce allows more part-time residents of Lake Tahoe to work from home-based offices and enjoy longer stays.

“As long as they have an Internet connection and a cell phone, they can choose where to work,” Dietz says. “They can spend more time at the lake, and that brings more money to the Lake Tahoe economy.”

Much of that money stems from the rapid rise of social media companies. Initial public offerings from Facebook, Twitter and LinkedIn created a mass of wealth for their employees.

Other notable Silicon Valley/Bay Area IPOs in the past few years include Blackhawk Networks, Groupon, Barracuda Networks, Gigamon and FireEye. IPOs create near-instant wealth for company employees, and the nouveau riche often cast eyes toward the fabled shores of Lake Tahoe.

The rise in sales of luxury properties coupled with shrinking inventory is impacting median sales prices. Median sale price for the Incline Village-Crystal Bay area in the third quarter was $1.075 million, a year-over-year increase of 13 percent, Tahoe Luxury Properties reports.

In the last two years there were 19 sales above $5 million in Crystal Bay and Incline Village; however, in the two years before that there were only six sales in that price range.

Many businesses are flush with cash from the influx of new homeowners to the region.

Pam Aaron, owner of Sierra Verde Interior Design in Incline Village, says many new homeowners are ditching traditional “cabin-style” furnishings found at many Lake Tahoe properties in favor or more modern furnishings and fixtures — especially among younger homeowners. Aaron says that segment of business has helped her thrive since founding Sierra Verde Interior Design eight years ago.

Many homebuyers in the Incline Village area, Aaron notes, must fully furnish new home purchases because they have bought property at Lake Tahoe as second residences and aren’t moving furniture or other household items from their primary residences.

Automation is another hot trend.

“Younger families are trending to more modern homes that are fully automated,” Aaron says. “You can run the whole house from an iPad. You can turn on the house from your car, and it’s warm when you get there.”

Karen Colbert, owner of Handmade at the Lake in Incline Village, says upscale restaurants and high-end galleries typically benefit more from Bay Area spending than do smaller shops favored by locals.

Colbert recently repositioned her store with more modest-priced home décor and gifts instead of expensive art because it simply wasn’t selling.

Real estate isn’t the only avenue for Californians seeking shelter from the state’s 13.3 percent personal income tax for individuals or couples grossing more than $1 million in annual income.

Greg Crawford, co-manager of Alliance Trust in Reno, says about one-quarter of his company’s business comes from setting up Nevada-based trusts for Bay Area and Silicon Valley residents.

Nevada offers some of the most favorable estate and trust laws in the nation, while California has some of the worst and least-flexible, Crawford says. Alliance Trust works with high-net-worth clients throughout the San Francisco Peninsula, and many of those customers have longstanding ties to Lake Tahoe and northern Nevada.

“A lot of Twitter executives have used Nevada trusts to shelter and shield part of their assets,” he says. “The same is true with Facebook and GoPro. It is very well established in Silicon Valley that Nevada is a better place for your wealth — it may not be a better place to create it, but it’s a better place to protect it.”

Family trusts set up in Nevada can last for as long as 365 years, Crawford notes, while California trusts wind down after roughly 80 years. Much of Alliance Trust’s business over the past few years comes from younger clients working at social media companies, he adds.

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