While home prices continue to climb, progress being made on affordable housing
It’s a modest home – one story, 1,400 square feet, located in Tahoe Donner. Six years ago, it sold for $164,000.
Today, it’s listed for $450,000. The difference between the prices alone is enough to buy a house in most markets.
“This is shocking,” wrote Mike Dunsford, a realtor and head of the commercial division at Prudential Realty, in an e-mail interview. “Especially for the young family who’s a first-time homebuyer. They are essentially excluded from our market.”
For homes in the area to appreciate so rapidly is not unusual. In the entire Truckee area from Soda Springs to Hirschdale, the median price of homes has risen almost 20 percent since 2001, according to the Multiple Listing Service (MLS).
While those who entered into the market early are basking in the profits as a result of their foresight, or just good timing, middle- to low-income families who are not homeowners are left on the sidelines – the outskirts of Truckee.
“Clearly incomes have not kept pace with the appreciation in real estate, so the middle-income people are falling behind,” Dunsford said in an interview. “Middle-income families are faced with the possibility of commuting.”
According to the Truckee Affordable Housing Land Use Evaluation Study conducted by Bay Area Economics, a four-member family with an income of $70,800 could afford a home for $234,692. The medium cost for a home in Truckee is $383,000.
“It takes a pretty high income to qualify for that loan,” said Tony Lashbrook, the Community Development Director for the Town of Truckee.
Parallel to the increasing prices, are a swell in the sales of homes, especially in areas like Donner Lake and Tahoe Donner. Many of the small cabins and older homes that once dotted Donner Lake’s circumference have been renovated or rebuilt, and the lots in between them are filling in, “thus making it a more desirable place to live,” said Charlie White, Tahoe Sierra Board of Realtors president and owner of Donner Lake Realty.
So desirable, sales have increased 92 percent in two years, according to the MLS.
The reason for such inflation of prices and sale rates is simple economics, Dunsford said. As the demand increases, property values go up.
The expansion in Truckee seems to follow the population surge in surrounding metropolis areas, like the San Francisco Bay Area, Sacramento and Reno, Dunsford said.
“That growth in population is really translating to more interest in a second home in the mountains,” he said.
Decades ago, the Tahoe Regional Planning Agency imposed a moratorium on commercial and residential development in the Tahoe Basin. It directed people interested in buying second homes to places like Truckee, Dunsford said.
More recently, investors are betting on real estate instead of a finicky stock market. All of this, coupled with a trend of early retirement, creates a higher demand for homes in Truckee, he said.
There has been more interest in development in turn, Lashbrook said.
Ten years ago, the lots in places like Tahoe Donner were plentiful and undeveloped. As they are swept up, the rising prices (in Tahoe Donner, an average increase of almost $90,000 since 2001) have prompted developers to seek new areas to build residential housing, Lashbrook said.
Gray’s Crossing and Tahoe Boca, developments that have been fervently discussed in recent months, are the result. There is potential to include lower- and middle-income homes if these developments are approved, the study suggests.
The proposal for Gray’s Crossing has designated 225 affordable housing units out of a total of 725.
Despite the increasing median cost of a house, the affordable housing study found that Truckee is making progress in providing affordable housing and approving new projects with the same goal.
But the prices of homes won’t stop climbing, Dunsford said.
“When we assess all of the new destination resorts that are in the planning and application stages, every indication is that this growth will continue, and existing property (value) will continue to go up,” he said.
For those who can, its an opportune time to purchase real estate, said Bob Lamberg, a realtor at Prudential Realty.
“Dirt is probably the best kind of investment you can make now,” he said.
A lot he bought in Tahoe Donner for $28,000 in 1995 recently sold for $150,000.
“That’s just dirt” he said. “And dirt doesn’t change. Dirt is dirt.”
Real estate statistics for Truckee, 2001-2003
2001 2002 2003
(# of sales) (# of sales) (# of sales)
(Median price) (Median price) (Median price)
(avg. days on market) (avg. days on market) (avg. days on market)
MLS Areas 7-9(Truckee) 516 803 928
$320,000 $360,000 $383,000
121 135 135
Donner Lake 26 35 50
$282,000 $310,000 $365,000
126 159 205
Tahoe Donner 229 368 428
$365,000 $405,000 $454,500
128 123 119
Glenshire 68 97 92
$296,000 $322,000 $346,5000
99 126 105
Sierra Meadows 12 30 27
$314,000 $299,000 $365,000
90 92 107
Price increase (’01-’03) % price increase sale increase
Areas 7-9 $63,000 19.7% 412
Donner Lake $83,000 29.4% 24
Tahoe Donner $89,500 24.7% 199
Glenshire $50,000 17.1% 24
Sierra Meadows $51,000 16.2% 15
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