Sierra Sotheby’s: Luxury market ‘even stronger’ post-recession
INCLINE VILLAGE, Nev. — Sierra Sotheby’s International Realty closed the year on a high note as Philip White, president and CEO, was joined by other members of the Sotheby’s network atop the podium at the New York Stock Exchange to ring the December 29 Closing Bell.
The event celebrates the company’s 40th anniversary in the luxury residential real estate brokerage business.
“I am very proud of the journey we have taken together with our global luxury real estate network to bring the brand where it is today,” said White. “The Sotheby’s International Realty brokerage network was built to connect the finest independent residential real estate companies to the most prestigious and discerning clientele in the world.”
Later, White appeared on CNBC’s Closing Bell to discuss the luxury real estate market. In his appearance, White commented that the luxury market is healthier than it was before the crash in 2008.
“It’s even stronger; I think it’s more stable, it’s less erratic, and the long-term value is even stronger than it was then,” he said. “It was a sharp drop-off as we all know, and it’s taken a long time to really get to this recovery point.”
While many market watchers feared that the Fed raising interest rates might increase mortgage prices further, this market is not directly affected by those changes, White said.
“A lot of our transactions are all cash, and even the slight short-term interest increase really doesn’t affect the mortgage rates in a significant way,” he noted.
“We are very optimistic about sales growth for all the markets we cover,” adds Sierra Sotheby’s International Realty President Peter Strand. “Continued snowfall in the new year is fueling renewed demand for ownership. In 2016 we’re predicting our best year ever.”
‘RUNNING INTO CHALLENGES’
Dry conditions in 2015 triggered undervalued pricing and lower than average sales volume in many of the ski resort neighborhoods like Northstar, Squaw Valley and the Stateline/Heavenly Village areas.
However, end-of-year statistics combined with an uptick in luxury sales at the onset of 2016 suggest that these areas are back on target to reach their full potential in the coming year.
“Families are running into challenges with lodging availability for their next ski vacation as rental entities sell out and high rental rates create heartburn for some. The costs and challenges of vacation rentals have families turning to ownership options to solve their needs,” says Truckee-based agent Breck Overall. “Traditionally, as the snow continues to fall, inventory shrinks which creates a greater sense of urgency to lock in a desired location or opportunity.”
For those in the new home market, 2015 earmarked the most significant growth in new home construction in over a decade with hundreds of new builds recorded in Mountainside at Northstar, Martis Camp, Schaffer’s Mill, Gray’s Crossing, Lahontan and Old Greenwood.
On the South Shore, Zalanta Resort, represents the first new luxury condominium project in 30 years while anticipation continues to grow around plans for proposed developments including the Truckee Railyard Project, Homewood Resort on Tahoe’s West Shore, and several new projects centered in Crystal Bay.
“Tahoe’s lakefront market continued its rebound in 2015 with 25 properties selling on the West and North Shores,” says Sierra Sotheby’s International Realty Broker Jeff Hamilton. “The biggest market shift showed increased activity on the West Shore combined with the decreased activity on the North Shore as buyers searched for ‘deep-water’ functional piers.
“As winter storms continue, we expect that water level will play a less important role in determining which properties are being sold. Until then, pier functionality and lake access will continue to drive buyers lakefront decision making process.”
Incline Village was a bright spot in 2015 for Sierra Sotheby’s International Realty, which closed the year as the leader in lakefront home sales and a 57 percent overall jump in sales volume for that market.
Prices in this niche market ranged from $2 million to $11 million in 2015 and $2 million to $13 million in 2014, says Incline Village agent Lexi Cerretti.
“What’s notable about the lakefront market in Incline Village,” adds Cerretti, “is that the inventory is very low. There are just three direct lakefront homes on the market now, and three homes with HOA lake access. There is buyer interest especially for building opportunities as well as newer construction or remodeled homes.”
On Tahoe’s East Shore the Glenbrook market remained strong through 2015, and although the number of units sold was down, average pricing was up 15 percent while average days on market was down 15 percent.
Southwest Reno was a highly robust market in 2015 with growth in both volume and median price across most neighborhoods. On a corporate scale, Switch’s new data center and Tesla’s new 3000-acre site just outside of Reno are contributing to the region’s technology renaissance and economic vitality.
Since 2011, the “Biggest Little City in the World” has recruited about 100 companies to locate or expand to the area with more than 10,000 new jobs and many more to follow.
San Francisco Bay Area and foreign buyers are taking notice. Between the outdoor lifestyle, natural beauty and Nevada’s tax hospitality, the greater Reno/Lake Tahoe area is being taken seriously as place to relocate, diversify, and/or explore a slower pace of life.
Every micro market in the Reno/Lake Tahoe region reacts differently to external triggers, so Sierra Sotheby’s International Realty dissects the quarterly and year-end data by neighborhood to help buyers and sellers understand the market trends on a local level.
To see how the market is trending in your community, visit tahoerealestatediary.com/micro-market-reports or contact a local agent for expertise and insider knowledge.
This article was submitted by Sierra Sotheby’s International Realty, with eight office locations throughout Lake Tahoe and Truckee: Incline Village, South Lake Tahoe, Squaw Valley, Stateline/Village at Heavenly, Tahoe City Gallery, Tahoe Donner, Downtown Truckee and Tahoe City Lakeside. Visit sierrasothebysrealty.com to learn more.