New Trends in Tahoe Real Estate: Shared Ownership Vacation Homes
By Jeff Cutler, Esq.
Realtor, RSPS
By now you’ve probably heard about it from a friend or neighbor, or seen it in the paper. Increasingly, people are talking about buying into shared ownership vacation homes at Lake Tahoe or at other mountain and waterfront vacation communities.
These are not the timeshares in low-budget developments of the past. Fully-managed shared ownership luxury packages are being offered in the Tahoe-Truckee region by East-West Partners at Old Greenwood and Northstar’s new village; and Tonapalo is a lakeside Storied Places resort that was developed by Intrawest. Shared ownership deals in private residences are also being offered by smaller developers and private individuals in both single homes and in residence club formats. The number of shares can range from 2 to 17, and owner changeover can be seasonal, weekly, or by reservation. Since the local board of realtors began tracking shared ownership sales in mid 2003, 80% of these deals have occurred in condominium type developments such as SweetBriar on the Lake, Northstar Village and Tonapolo. Private single- family residences account for 20% of the shared ownership market.
What is the reason for all this new interest? And how might it affect Tahoe locals, vacationers, and investors?
Right now the answers to these questions are a bit unclear. One reason for the new interest is clearly that the rising cost of purchasing and maintaining a second home in Tahoe has forced some people to think about more practical economic options. Another is the increasing awareness amongst vacation homeowners of how seldom they actually use their properties. For instance, recent research indicated that average vacation homeowners only use those homes 17-20 days per year.
Meanwhile, interest in investing in Tahoe real estate is still high. Recently released statistics showed that appreciation rates in Tahoe continued to far outpace the national and statewide averages last year as they have for the past several years. And though there is a real estate slowdown in California generally, the experts seem to agree that Tahoe’s recent price increases reflect a catching up of the North Tahoe market to its feeder areas rather than an inflating bubble market in need of a correction.
As far as the effects this emerging market will have on those of us that love Tahoe and are either locals or vacation here, the anticipated results are mostly positive. Since the economy of the area is heavily dependent on seasonal tourism, the shared ownership of homes in Tahoe may lead to increased use of those homes (and influx of tourism dollars) in some of the otherwise slow times of year. Along the same lines, the increased demand for comprehensive management associated with shared ownership is likely to lead to the emergence of more business on a more consistent basis for property managers.
Additionally there are some positive potential effects stemming from people’s ability to sell shares in homes they already own while keeping a share for their continued ownership. In some cases the influx of new owners and capital will allow for much needed maintenance or upgrades to some of the region’s neglected properties, and in other cases the option to keep a share may allow Tahoe locals to move to other areas for economic reasons while maintaining ownership in the region for future use and potential appreciation in value.
The full effects of the emerging market interest in shared ownership of Tahoe properties in all likelihood will not be fully understood for some time to come. Since many trends start in California and spread throughout the country, the savvy real estate investors as well as local Tahoe homeowners may want to keep their eyes and ears open for developments in this rapidly evolving sub-section of the real estate market.
(Jeff Cutler is an Attorney and Realtor certified as a Resort and Second Home Specialist by the National Association of Realtors. He is the founder of the Dreamslice International real estate brokerage and the dreamslice.com website. Click here to request more information on shared ownersip properties in Lake Tahoe)
