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| | Tahoe/Truckee: Q4 Results | The Tahoe/Truckee region may seem like a world away from the Bay Area, but its real estate market told a familiar story in the fourth quarter: a dwindling supply of homes for sale and buyers forced into bidding wars for fairly priced properties. Properties still on the market for more than 60 days were often overpriced, less desirable, or problematic.
Many properties in Tahoe/Truckee are second homes for Bay Area residents, and buyers tend to be picky – they’re not interested in homes that require repairs or remodeling. Luxury markets in Truckee’s Martis Camp and the Lake Tahoe basin were hot during the fourth quarter, and Tahoe Donner was the leader in most homes sold for $600,000 or less.
Condominiums sold well during the quarter, as buyers found it easier to get financing for a condo than for fractional-share properties.
Looking Forward: The Tahoe/Truckee real estate market is heavily dependent on events in the Bay Area, and the rebounding economy in San Francisco and surrounding counties suggests an active year ahead. We expect to see an increase in homes coming on the market in the first quarter of 2013, with higher price points than last year. Interest rates are expected to remain near today’s record lows, making homes more affordable even as prices rise.
Defining Tahoe/Truckee: Our real estate markets in Tahoe/Truckee include the communities of Alpine Meadows, Donner Lake, Donner Summit, Lahontan, Martis Valley, North Shore Lake Tahoe, Northstar, Squaw Valley, Tahoe City, Tahoe Donner, Truckee, and the West Shore of Lake Tahoe. |
| | Median Sales Price | | The median sales price represents the midpoint in the range of all prices paid. It indicates that half the prices paid were higher than this number, and half were lower. It is not the same measure as “average” sales price. | | Single Family Homes – Median Sales Price |  | | Click to view larger chart | | | | Condominiums – Median Sales Price |  | | Click to view larger chart | | Months’ Supply of Inventory | | The months’ supply of inventory is a measure of how quickly the current supply of homes would be sold at the current sales rate, assuming no more homes came on the market. In general, an MSI below 4 is considered a seller’s market; between 4 and 6 is a balanced market; and above 6 is a buyer’s market. | | Single Family Homes – Months’ Supply of Inventory |  | | Click to view larger chart | | Average Days on the Market | | Average days on the market is a measure that indicates the pace of sales activity. It tracks, on average, the number of days a listing is active before it goes under contract, meaning the seller has accepted an offer but the transaction is not yet closed. | | Single Family Homes – Average Days on the Market |  | | Click to view larger chart | | | | Condominiums – Average Days on the Market |  | | Click to view larger chart | | Percentage of Properties Under Contract | | Percentage of properties under contract is a forward-looking indicator of sales activity. It tracks expected home sales before the paperwork is completed and the sale actually closes. | | Single Family Homes – Percentage of Properties Under Contract |  | | Click to view larger chart | | Sales Price as a Percentage of Original Price | | Measuring the final sales price as a percentage of the original list price, without price adjustments, determines the success of a seller in receiving the hoped-for sales amount, but it also indicates the level of sales activity in a region. | | Single Family Homes – Sales Price as a Percentage of Original Price |  | | Click to view larger chart | | | | Condominiums – Sales Price as a Percentage of Original Price |  | | Click to view larger chart | | | |  | | Click to view larger chart | |
 | | | 2012 Set Records — Here's to 2013! | 2012 was a blistering year for San Francisco Bay Area residential real estate, as most of our regions tallied their highest number of home sales since 2005. Back in Q2 we said jobs would drive our housing markets, and we hit the nail on the head. Exceptional job growth in San Mateo, San Francisco, and Marin counties spurred home-buying demand at a pace not seen in other U.S. markets.
Due to a limited inventory of homes for sale, we also got the most interesting dynamic of our record-setting year: the return of “bidding wars”, or multiple offers, in most markets at price points up to $1.5 million.
In 2013 we predict more robust demand, as job growth expands into other Bay Area counties. Continuing constrained inventory will create price appreciation for the first time since 2007. And if the appreciation continues through summer '13, we will see “move-up buyers” re-enter the hunt for higher-end housing (over $1.5 million) in late August and early September.
These buyers, who have been waiting patiently for their home values to rise so they can trade up to larger residences or better neighborhoods, will contribute to additional inventory in the mid-tier markets and improved demand in the higher end.
Overall, we have a very positive outlook for Bay Area residential real estate in 2013. Whether you're looking to buy or sell, remember that real estate is hyperlocal — and your best ally is a real estate professional who can provide you with exceptional local insight, knowledge, advice, and decision support.
Happy New Year!
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| | | Luxury Home Buyers Changing Their Ways |  Goodbye, bling. Hello, quality and value.
That’s the new approach luxury home buyers are adopting in the San Francisco Bay Area, according to Alf Nucifora, chairman and founder of the Luxury Marketing Council of San Francisco.
He says lessons learned from the recession, baby-boom buyers eyeing legacy purchases, and young tech turks who value function over form are fueling the trend.
| “The recession taught us that we can live without unnecessary extravagances,” says Nucifora. “And that has led to a systematic shift in the way people buy. We are less concerned with showing it on the outside but more concerned with enjoying it on the inside.”
In addition, so-called baby boomers (born 1946 through 1964) now make up a significant portion of the luxury-buyer market, and they are shifting from making to preserving wealth.
“We (boomers) played and we made and we splurged, but we don’t need the fancy cars, the watches, or the showplace home anymore,” he says. “Now it’s the notion of bespoke, of things crafted with an eye to enduring value. We have kids and grandkids and want a legacy to be handed off to them.”
The young dot-com and IPO millionaires might not be thinking about their future family bequests, but many also eschew frippery for functionality. They choose jeans and T-shirts over Brioni suits and sink their money instead into elite experiences and artisanal comfort. They may not have the biggest house on the block, but there’s a La Cornue range in the kitchen and a custom Jacuzzi in the backyard.
What this all translates to is a shift away from showy excess and toward a search for quality, value, and connoisseurship, especially in the $2 to $10 million range, says Nucifora. It’s the consumption of wealth on a quiet, introspective basis, as opposed to ostentatious display.
|  “Buyers are now more focused on the view, the privacy, how good the kitchen really is -- things that go into the enjoyment of the family experience as opposed to letting me show my neighbors how big and wealthy I am,” he says.
While luxury buyers still spend plenty of money, it’s now more often on things like interior remodels, home theaters, expensive custom cabinetry, or top-of-the-line appliances – items that create a high-end quality of life experience but are invisible to anyone on the outside.
| And even the most well-heeled buyers are looking for bargains.
“They can easily afford to pay above listing price, but they want to get a deal because it affirms their sense of self, their smartness,” says Nucifora.
What does this mean for 2013? Expect to see these trends continue, he says. Sellers in these price ranges would be smart to invest in staging, because today’s value-savvy luxury buyers are willing to shell out for the right experience – and a luxury residence with empty rooms or dated furnishings doesn’t fit that bill.
“In buying real estate, it’s that visceral reaction when I walk in,” Nucifora says. And, he adds, bad presentation is obvious: “When you walk into some of them it’s like entering an abattoir.”
Pie-in-the-sky pricing schemes will also be a thing of the past, even as home values rebound; buyers in the high-end market will continue to look for deals and choose substance over show-off style. The cachet of spending piles of money on a pile of bricks has worn somewhat thin, he says.
“The recession taught us all that we can live without unnecessary extravagances, that we should look for quality, and really ask ourselves whether that purchase is absolutely necessary,” he says. “And most of us found out we can live without it.”
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