Construction adjusts to market’s cooling
January 25, 2007
Slowing in the real estate market has delayed build-out on a Truckee-area development.
Phase five of Old Greenwood’s fractional home-ownership development has been delayed by six months from May 2007 to September 2007. High sales numbers in 2004 drove rapid construction of fractional ownership units, but when the market cooled in 2005, developers found themselves ahead of demand.
“Two years ago sales were running at such a high pace, we built inventory expecting 300-plus shares a year,” said Old Greenwood Project Manager Jeffrey Butterworth. “Then it dropped off ” last year we had 250 closings, and we expect that again this year.”
Of the 146 fractionally-owned cabins and town homes planned for Old Greenwood, 83 have been built, he said.
“We are ahead on inventory so we are delaying laying foundations for six months,” Butterworth said.
He said fractional ownership unit sales have slowed less than whole ownership sales in East West Partners’ local projects, because fractional ownerships are more affordable for second homeowners.
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“Fractional ownerships are such a good value ” you are more-or-less mortgaging a vacation,” Butterworth said. “But there has been a slow-down across the board.”
Bill Fiveash, vice president of sales and marketing for Tahoe Mountain Resorts, said despite the slight decrease in sales at Old Greenwood, the project is still posting some of the highest fractional sales numbers “in the country, if not the world.”
Fiveash said in the last 12 months, sales of newly constructed homes throughout East West Partners local developments has decreased, while the re-sale of homes has increased.
“When the market softens developers have no incentive and can wait the market out,” Fiveash said. “Individuals trying to sell their homes are more urgent.”
Kim English, real estate agent for the Resort at Squaw Creek, said the winter weather ” or lack thereof ” has also affected sales.
“It’s definitely slowed down from this summer,” English said. “The lack of snow is keeping buyers from coming up.”
Fiveash said sales have increased at Northstar over the last two months, attributing the boost to the Village at Northstar nearing completion.